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Market Opportunities in Scandinavia

Denmark, Norway, and Sweden

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CONTENTS

DENMARK__________________________________________________________________ _ _ _1

Country Profile & Economic Overview____________________________ __ 3 Trade Overview____________________________________________________________ _ _ 5

Life Sciences___________________________________________________________________ _ 7

Infrastructure_________________________________________________________________ 15

Green Shipping________________________________________________________________ 25 Other Opportunities_________________________________________________________ _29 NORWAY_______________________________________________________________________ _ 30

Country Profile & Economic Overview____________________________________ 30 Trade Overview_______________________________________________________________ 31

Life sciences___________________________________________________________________ 33 Infrastructure_________________________________________________________________ _ 37

Green Shipping________________________________________________________________ _43 Other Opportunities _________________________________________________________ 48

SWEDEN_________________________________________________________________________ 49

Country Profile & Economic Overview____________________________________ _49 Trade Overview_______________________________________________________________ 51 Life Sciences____________________________________________________________________ _53 Infrastructure_________________________________________________________________ __58 Green Shipping________________________________________________________________ __63 Other Opportunities__________________________________________________________ __66

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DENMARK Country Profile and Economic Overview Denmark is a rich, modern society with state-of-the-art infrastructure and distribution systems, a highly skilled labor force and a central location that makes it an excellent distribution point for the Scandinavian, Northern European and Baltic markets. Its highly-competitive service based economy features high employment levels and a generous social security system. Over the last two decades, Denmark’s economy has experienced overall strong growth, low unemployment, low inequality, strong financials, heavy government involvement, a high degree of economic freedom, and considerable ease of doing business. Since the global financial crisis, Denmark’s competitiveness and growth have suffered, but the economy has performed relatively well compared to Europe as a whole. The Danish economy is fundamentally strong. Since the mid-1990s, economic growth rates have averaged close to 3%, the formerly high official unemployment rate stands at 6.2%, and public finances have been in surplus. Since 1989, Denmark has had a comfortable balance-of-payments current account surplus, corresponding to 5.5% of GDP in 2012.1 Denmark’s standard of living is among the highest in the world with a GDP per capita of $60,634.2 However, competitiveness has deteriorated in the past decade and productivity growth has been weak – only rising one point between 2011 and 2014 – eroding potential economic growth. Moreover, vulnerabilities remain in the financial sector.3 It did not evade the economic malaise that has affected Europe in recent years, with GDP declining slightly in 2012 and 2013 and rising a tepid 1.1% in 2014.4 Growth accelerated in 2015. Denmark’s fiscal position is relatively sound. Though it has deteriorated during the current economic crisis, Denmark entered the crisis in a strong position and the budget deficit has remained moderate both compared to Denmark’s past experience and to other OECD countries.5 In 2014 Denmark had a

1 U.S. Commercial Service: Denmark Economic Overview 2 CIA World Factbook: Denmark 3 U.S. Commercial Service: Denmark Country Commercial Guide 4 Euro Monitor 5 U.S. Commercial Service: Denmark Country Commercial Guide

Denmark Country Profile • Population: 5,581,503 • Median Age: 41.8 years • Largest City: Copenhagen • Area: 42,434 sq. km • GDP: $342.4 billion • GDP Real Growth Rate: 1.1% • GDP per capita (PPP) $44,600 • Inflation rate: 0.6% • Unemployment rate: 6.2%* • Currency: Danish Krone

Source: CIA World Factbook, 2014 est. * EuroStat, Sep. 2015

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budget surplus of 1.3% of GDP, among the highest in the world. Its public debt of 45% of GDP is likewise among the most favorable ratios among OCED countries. 6 Economic Structure Among OECD countries, Denmark’s economy has among the highest degrees of government involvement. According to a 2013 report by Eurostat, Danes pay the highest taxes among all EU countries,7 with taxes and other revenues accounting for 58.5% of economic output in 2014.8 One quarter of the population is employed in the public sector and 24% of the working-age population relies primarily on government transfer payments. Denmark’s government-intensive “flexicurity” system helps adjust to shocks while limiting the social cost of unemployment and the risk that it could become entrenched. The social welfare system ensures low poverty and low inequality. However, the heavy load of government transfer payments burdens other parts of the system. Health care, other than for acute problems, and care for the elderly and children have particularly suffered. 9 Heavy government involvement has not, however, negatively impacted economic freedom or ease of doing business. Denmark ranks 11th in the world and 4th in Europe on the Heritage Foundation’s 2015 Index of Economic Freedom, receiving particularly high marks for regulatory efficiency, market openness, and rule of law.10 Likewise, the World Bank ranks Denmark 3rd globally on the Doing Business Index, giving it a perfect score on the “trading across borders” criteria.11 Denmark’s thoroughly modern market economy features a high-tech agricultural sector and state-of-the-art industry with world-leading firms in pharmaceuticals, maritime shipping, and renewable energy. Services account for over 77% Denmark’s GDP, a comparable rate with other advanced economies. Major industries include food processing (especially meat and dairy goods), shipbuilding, the manufacture of metals, chemicals, machinery, transportation equipment, textiles, electronics, furniture, wood products, pharmaceuticals, medical equipment and windmills. 12 Economic Forecast Denmark’s economy improved throughout 2015, with real GDP rising an estimated 1.7%.13 Growth is projected at 2.1% for 201614 and at about 1.5% per year for the medium term, with domestic demand and exports being the main drivers. Unemployment has fallen from 6.5% to 6.1% in 2014 and is projected to continue declining modestly. Wage growth remains moderate, which is helping with competitiveness, but productivity growth is sluggish. Long-term unemployment is very low. Even as the population ages, immigration will help drive population growth of about 6.5% by 2030 (0.4% per year). Boosted by high levels of savings and low interest rates, private investment is expected to strengthen. The government is making efforts to further boost corporate investment in part through plans to cut 6 CIA World Factbook: Denmark 7 U.S. Commercial Service: Denmark Economic Overview 8 CIA World Factbook: Denmark 9 U.S. Commercial Service: Denmark Economic Overview 10 Heritage Foundation: 2015 Index of Economic Freedom 11 World Bank: Doing Business Index 12 CIA World Factbook: Denmark 13 Eurostat 14 UK Trade and Investment: Denmark Trade and Export Guide

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energy taxes through 2020. It plans to introduce tax breaks for start-ups and reductions in dividend taxes to eventually align corporate tax rates with levels in Germany and Sweden to bolster competitiveness. Modest gains in private consumption provide additional support. The real value of private final consumption rose by 0.8% in 2014 and a growth rate of 2.8% is expected for 2015. Although high household debt continues to constrain consumer spending, households are rebuilding balance sheets and net wealth is rising.15

Denmark Trade Overview Denmark is highly dependent on international trade, with exports and imports each equaling approximately one third of GDP in 2014. Its government is a strong advocate for liberal trade policy, and political and commercial relations with the United States are excellent. The United States is Denmark’s top export partner outside of the EU. Denmark’s major imports from the United States are: industrial machinery, capital equipment, computers and telecom products, software, aircraft, and scientific instruments. Other important U.S. exports to Denmark are military equipment, chemicals and pharmaceuticals, tobacco, wine, fresh vegetables, nuts, and forest products. There are more than 500 American subsidiaries established in Denmark and a strong American Chamber of Commerce with approximately 255 members. American-owned firms in Denmark are prominent in information technology (IT) and telecommunications products and services, in biotechnology, and in offshore oil and gas exploration and production.

Denmark Imports & Exports (Billions of US$)16 Imports by Country Exports by Country

From 2014 %2013- 14 TOTAL 99.3 2.82 1 Germany 20.2 0.77 2 Sweden 12.2 1.06 3 Netherlands 7.6 4.61 4 China 6.9 7.10 5 Norway 6.7 -3.70 6 United Kingdom 4.7 -7.10 7 Italy 3.6 8.64 8 Poland 3.3 1.53 9 France 3.0 4.68 10 Belgium 3.0 4.40 11 USA 2.6 23.49

To 2014 %2013- 14 TOTAL 110.9 0.73 1 Germany 20.0 8.25 2 Sweden 131 -2.40 3 United Kingdom 8.7 -9.72 4 USA 7.5 7.77 5 Norway 7.4 2.01 6 Netherlands 4.7 -5.50 7 France 4.3 9.35 8 China 3.9 13.40 9 Finland 3,.1 -3.38 10 Poland 3.0 7.45 11 Italy 2.7 -0.91

15 Eurostat 16 WISERTrade: EU Harmonized Query

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Imports by Product Exports by Country Product 2014 %2013- 14 TOTAL 99.3 2.82 1 Industrial Machinery 12.1 2.57 2 Electric Machinery 9.0 0.30 3 Fuel & Oil 8.3 -16.25 4 Vehicles, except rail 6.8 5.68 5 Pharmaceuticals 4.7 5.37 6 Plastics 4.4 4.35 7 Articles of Iron & Steel 2.7 2.53 8 Medical Equipment 2.7 1.28 9 Fish & Seafood 2.7 6.53 10 Ships, Boats & Floats 2.7 55.75

Product 2014 %2013- 14 TOTAL 110.9 0.73 1 Industrial Machinery 15.4 8.02 2 Pharmaceuticals 12.2 3.93 3 Electric Machinery 10.4 11.77 4 Fuel & Oil 8.2 -21.00 5 Meat 4.4 -8.77 6 Medical Equipment 4.6 3.31 7 Fish & Seafood 3.4 4.09 8 Articles of Iron & Steel 3.2 -6.34 9 Furniture; Bedding, ect 3.0 8.69 10 Plastics 2.7 0.43

U.S. Exports to Denmark (Millions of US$)17

Total U.S. Exports New England Exports Commodity 2014 %2013- 14 TOTAL 2,360.7 5.81 1 Industrial Machinery 359.2 8.43 2 Medical Equipment 307.6 -14.69 3 Aerospace 259.8 71.23 4 Electric Machinery 257.7 2.98 5 Special Classification 98.2 0.84 6 Pharmaceutical Products 96.3 2.41 7 Animal Feed, Food Waste 92.9 -34.87 8 Albuminoidal; Glue; Enzym 70.7 99.52 9 Vehicles, Except Rail 60.9 45.94 10 Articles Of Iron Or Steel 60.8 12.30

Commodity 2014 %2013- 14 TOTAL 106.6 12.89 1 Medical Equipment 36.1 7.44 2 Electric Machinery 20.8 19.77 3 Industrial Machinery 11.8 -9.04 4 Glass & Glassware 4.5 15.98 5 Aerospace 4.5 302.58 6 Art & Antiques 4.2 5,724.49 7 Fish & Seafood 3.7 10.91 8 Jewelry & Precious Metals 2.1 52.61 9 Chemical Products 1.6 101.55 10 Plastics 1.5 -20.95

17 WISERTrade: State Database

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Denmark Life Sciences Industry Healthcare Sector Overview In 2013, total healthcare spending in Demark was US$ 36.86 billion and estimated public health care spending was around US$ 31.36 billion. More than three quarters of healthcare funding comes from the government. Total healthcare expenditure in Denmark has expanded faster than GDP over the past decade and now accounts for 11.2% of GDP.18 Annual healthcare expenditures per capita are nearly US$ 6,500.19 Approximately 17.5% of Denmark’s population is 65 and older and nearly one-third of hospital expenditure goes to this segment. Denmark will face future challenges regarding expected increases in healthcare costs as the population continues to age. The healthcare sector has three political and administrative levels: national, regional, and local. Denmark is divided into five regions and 98 municipalities that cover at least 20,000 inhabitants each. Regions are responsible for providing hospital care, including owning and operating hospitals and prenatal care centers. They allocate finances for general practitioners (GPs), specialists, physical therapists, dentists, and pharmacies. Municipalities are mainly concerned with preventive care, rehabilitation, and long-term elderly care. Danes are generally satisfied with their experiences, with 89 % of those polled stating that they are very or somewhat satisfied the when using the services, e.g., when consulting a general practitioner.20

Denmark Healthcare Expenditures

Source: World Bank: DataBank

In 2013, the Danish government announced plans to restructure the national health system. These plans involve consolidating services into larger and fewer clinics and hospitals, transforming inpatient procedures to outpatient procedures, and tackling health inequalities in an effort to reduce cost and increase efficiency. The new hospitals represent the largest capital investment ever made in Denmark—20 to 25% of which will be spent on IT and technology. The largest project, the NUH at Aarhus, will be the size of a provincial town, expanding Aarhus University Hospital with a budget of US$ 1.1 billion. 18 U.S. Commercial Service: 2015 Healthcare Technologies Resource Guide 19 Emergo Group: Denmark Medical Device Industry 20 U.S. Commercial Service: 2015 Healthcare Technologies Resource Guide

8.5 9 9.5 10 10.5 11 11.5 12

0

1000

2000

3000

4000

5000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Health Expenditure Per Capita, Constant …

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While total healthcare spending is projected to increase in the next several years, the percentage of public health expenditure is projected to decline. Technology and innovation will be spending priorities. The government has focused on e-health and telemedicine projects in areas like pregnancy, diabetes, and inflammatory bowel disease in order to achieve cost and efficiency goals. The Danish government has also allocated US$ 21.3 million over the next four years to partnerships between municipalities, civil society, and the private sector that encourage health improvement in the population. Furthermore, Denmark is entering into joint research projects with India in the field of human health science biotechnology. As of 2014, Denmark’s health sector has 53 public hospital-premises and 23,190 physicians. Over the next decade, approximately 7.1 billion US$ will be invested in 16 new (or renovated) modern hospitals, eight of which will be super hospitals. As of 2014, all hospitals had received final approval.21 Healthcare Trade Overview U.S. Life Sciences Exports to Denmark (US$)22

Product 2014 %2013- 14 %2014- 15 Total All Life Science Products 314,447,100 -4.88 -7.56 1 Medical, Surgical, Dental Or Veterinary Instruments 88,900,634 -8.94 -5.23 2 Medicaments Of Mixtures, Not in Dosage Form 53,230,861 12.81 2.91 3 Instruments for Physical & Chemical Analysis 52,826,850 9.63 8.69 4 Vaccines, Diagnostics, & Antisera ect. Prepared from Blood 29,686,458 -1.74 -46.72 5 Composite Diagnostic/Lab Reagents, Excluding Pharmaceuticals 21,627,775 -6.27 17.38 6 Measuring & Checking Instruments, Not Elsewhere Specified 14,402,970 -4.15 -11.88 7 Instruments for Measuring Or Checking Flow, Level Etc 9,138,042 11.44 -8.52 8 Oscilloscopes, Spectrum Analyzers Etc, Parts Etc 7,927,912 -52.69 -47.99 9 X-Ray Etc Apparatus; Tubes, Panels, Screen Etc & Parts 7,917,067 -22.50 -55.31 10 Medicaments Nesoi, Mixed Or Not, In Dosage Etc Form 6,550,931 -24.96 20.95

New England Life Sciences Exports to Denmark (US$)23

Description 2014 %2013- 14 %2014- 15 TOTAL 34,122,474 5.93 -5.00 1 Medical, Surgical, Dental Or Veterinary Instruments 19,215,812 1.51 8.52 2 Instruments for Physical & Chemical Analysis 9,492,835 35.13 -38.80 3 Composite Diagnostic/Lab Reagents, Excluding Pharmaceuticals 1,497,118 128.08 -5.36 4 Instruments for Measuring Or Checking Flow, Level Etc 874,081 -36.79 41.10 5 Oscilloscopes, Spectrum Analyzers Etc, Parts Etc 670,205 -31.95 -71.17 6 Medicaments Not Elsewhere Specified, In Dosage Form 561,494 -37.63 277.39 7 Measuring & Checking Instruments, Not Elsewhere Specified 509,397 -45.82 28.75 8 X-Ray Etc Apparatus; Tubes, Panels, Screen Etc & Parst 391,259 30.46 -76.42 9 Bandages Etc, Coated Etc, In Retail Packaging 251,726 -21.18 218.02 10 Automatic Regulating Or Control Instruments; Parts 186,454 31.32 23.00

.

21 U.S. Commercial Service: 2015 Healthcare Technologies Resource Guide 22 WISERTrade: State Database 23 Ibid.

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Life Sciences: Drugs & Pharmaceuticals Sector Production The Danish pharmaceutical industry is known worldwide for providing quality drugs and medical products. In 2012, Denmark was the 16th largest pharmaceutical market in the European Union, accounting for 1.4% of the total EU market. It was also the eighth largest producer of pharmaceutical products in the EU, accounting for 4.1% of the total EU production.24 The Danish pharmaceutical industry is a key sector of the local economy that has grown rapidly over the last decade, with direct employment rising from 11,200 in 2000 to over 20,000 by 2013.25 Including indirect employment, the pharmaceutical industry provides about 70,000 jobs. 26 This growth occurred even as total manufacturing employment fell by 127,000. The pharmaceutical industry’s share of GDP increased from 1.5% to 2.6% over the same period. Measured by the number of employees relative to the size of population, Denmark has the second largest pharmaceutical industry in the world. It is also a highly productive sector, with average worker productivity of 2.8 times the average for other manufacturing sectors in Denmark.27 The Danish-Swedish life science cluster ‘Medicon Valley’ is home to more than 60% of Scandinavia’s pharmaceutical industry. The region hosts fourteen leading universities, six university hospitals, seven science parks, 400 PhD’s and 5,500 researchers with graduate degrees, as well as 5,000 dedicated research and development employees. Denmark has strong expertise in the areas of diabetes, cancer, cardiovascular diseases, central nervous system diseases, inflammatory diseases and allergies.28 Based on the European Union’s Cluster Observatory rating system, Denmark has the third most specialized pharmaceutical cluster in Europe, trailing only Ireland and Switzerland.29 Denmark is home to major pharmaceutical companies such as Novo Nordisk, Nycomed, Orifarm, Lundbeck and Ferring Pharmaceuticals. These companies hold very strong positions in the market. However, there is a significant American presence and Biogen Idec, for example, has chosen to locate research and production facilities in Denmark.30 The rapid growth of the industry is attributed to a number of factors stemming from both the public and private sectors. These drivers include:

(a) Substantial investment in research and development. In 2012, Denmark's pharmaceutical R&D amounted to €1.4 billion or 4.7% of total EU pharmaceutical R&D. (b) Establishment of industry clusters to reach critical mass in research, expertise, and resources.

24 Legislative Council of Hong Kong: Pharmaceutical Industry in Denmark 25 Copenhagen Economics: The Danish Pharmaceutical Industry and TTIP 26 Legislative Council of Hong Kong: Pharmaceutical Industry in Denmark 27 Copenhagen Economics: The Danish Pharmaceutical Industry and TTIP 28 U.S. Commercial Service: 2015 Denmark Country Commercial Guide 29 Copenhagen Economics: The Danish Pharmaceutical Industry and TTIP 30 U.S. Commercial Service: 2015 Denmark Country Commercial Guide

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(c) Collaboration between public and private sectors and the strong higher education system that is well connected to the industry (d) High inflows of foreign investment and talent into the industry, buoyed by public funding, financial incentives, and tax policies.31

Pharmaceuticals as a Share of Denmark’s GDP

Source: Copenhagen Economics: The Danish Pharmaceutical Industry and TTIP

Consumption Despite the strength of the industry, the use of pharmaceutical products in Denmark is one of the lowest among OECD countries. In 2012, Danes spent an estimated US$ 3.5 billion on pharmaceutical products – approximately US$ 625 per capita.32 According to statistics from the Danish Medicines Agency, drugs for the treatment of central nervous system diseases are the top selling pharmaceuticals sold in Denmark. Other treatment areas are ranked as follows: immune system, heart and blood circulation, infection, digestion and metabolism, respiration, blood and blood forming organs, urology, muscles, joints and bones, hormones, sense organs and dermatology. With a life expectancy of 80.05 years, Denmark ranks among the lowest life expectancies in western and northern Europe. The most common cause of death is cancer (28%), which is then followed by heart disease (20.2%). Other common causes of death include lung diseases (9.6%), brain diseases (8.8%), mental illnesses (4.6%), central nervous system diseases (2.5%) and diabetes (2.4%). Danish obesity rates are among the lowest in the world (10%), but Danes have a high level of alcohol consumption (eighth in Europe) and Danes smoke more than most of their European neighbors (ranked fifth).33 31 Legislative Council of Hong Kong: Pharmaceutical Industry in Denmark 32 U.S. Commercial Service: 2015 Denmark Country Commercial Guide 33 Ibid.

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Market Projections The outlook for the Danish pharmaceutical sector is mixed. While it is expected to maintain a competitive and advanced industry, growth will be increasingly driven by exports rather than local consumption. One analysis projects a steep decline in the total market value from US$ 3.5 billion in 2013 to just US$ 3 billion by 2020. Price-cap agreements, high tax rates on pharmaceutical products are major causes of this projected decline.34 Accordingly, opportunities will be stronger for suppliers of intermediary products, than for producers aiming to directly reach the Danish pharmaceutical consumer. Despite these headwinds, there are some positive trends. Increasing demand for medicine, higher healthcare expenditures, and government healthcare reforms should sustain the industry. Plans to reduce to corporate tax rate to 22% by 2016 should further bolster the industry. The sector will also continue to enjoy the smooth regulatory framework, with the national procedure for registering a new product taking as little as six months in many cases. By comparison, the average for the US and the EU is 322 and 366 days respectively.35 Opportunities Marketing of pharmaceutical products is mainly done through targeting doctors and opinion leaders, but also through advertisements in industry magazines such as “Ugeskrift for Læger,” “Månedsskrift for Praktisk Lægegerning,” and “Dagens Medicin.” Trade shows: Biotech Forum | Lægedage Resources: Ministry of Health | The National Board of Health |The Danish Medicines Agency |

National Institute of Public Health | The National Serum Institute | The Danish Pharmaceutical Industry Association |Medicon Valley Alliance

Drugs & Pharmaceuticals Trade Overview Pharmaceutical products are the single biggest export commodity from Denmark to the United States. Within the last decade, the export of Danish pharmaceutical products has more than tripled. In 2014, Denmark exported nearly US$ 12 billion in pharmaceutical products, and the demand in exportation constituted approximately 90% of Danish pharmaceutical production. Exports go mostly to Europe (57.4%) and North and South America (27%). Denmark has had a trade surplus in pharmaceuticals of approximately US$ 7 billion; the trade surplus to the U.S. was approximately US$ 3.1 billion.36

34 Global Data: Healthcare, Regulatory and Reimbursement Landscape – Denmark 35 Ibid. 36 U.S. Commercial Service: 2015 Denmark Country Commercial Guide

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US Exports of Pharmaceuticals to Denmark (US$)37 Description 2014 %2013- 14 All Pharmaceutical Products 96,254,974 2.41 1 Medicaments Of Mixtures, Not in Dosage Form 53,230,861 12.81 2 Vaccines, Diagnostics, & Antisera ect. Prepared from Blood 29,686,458 -1.74 3 Medicaments Not Elsewhere Specified, In Dosage Form 6,550,931 -24.96 4 Glands, Organs & Extracts 3,353,777 11.78 5 Bandages Etc, Coated Etc, In Retail Packaging 1,918,767 -35.11 6 Other 1,514,180 -20.49

New England Exports of Pharmaceuticals to Denmark (US$)38

Description 2014 %2013- 14 All Pharmaceutical Products 902,658 -33.14 1 Medicaments Of Mixtures, Not in Dosage Form 561,494 -37.63 2 Bandages Etc, Coated Etc, In Retail Packaging 251,726 -21.18 3 Vaccines, Diagnostics, & Antisera ect. Prepared from Blood 54,783 -22.48 4 Other 26,695 -37.14 5 Glands, Organs & Extracts 4,404 -- 6 Medicaments Nesoi, Mixed Or Not, In Dosage Etc 3,556 -79.52

Life Sciences: Medical Equipment Sector The Danish medical technology market has grown rapidly over recent years and continues to grow at 4-6% per year. The market for medical technology is currently estimated at US$ 1.6 billion, equal to 4.6% of total health expenditure and 0.5% of total GDP.39 Per capita medical device expenditures in 2013 reached about US$ 280.40 Overview The government is the largest purchaser of health care equipment in Denmark, accounting for 85% of total purchases. Five regional authorities maintain the operations of the state-run medical facilities and hospitals. 98 municipalities / local authorities are in charge of preventive care and rehabilitation and responsible for nursing homes and the home care segment. Municipalities are authorized to make their own purchases, but there is also a national collaboration on procurement led by the Ministry of Finance and the National Association of Local Authorities, called SKI (in English: National Procurement Ltd. Denmark). General Practitioners run as independent businesses, but are reimbursed by the government. Dentists are only partly reimbursed and Danes pay for most dental service out of their own pockets. Danish dentists buy their inventory at the annual SCANDEFA trade show or through 3-5 main wholesalers. They also travel to GNYDM and ADA in the U.S. and elsewhere. Other purchasers of medical technology are private hospitals and individuals. Denmark has the highest per capita production of medical technology in the world. Annually, Danish medical technology companies develop, manufacture and market products worth more than US$ 9 billion (of which more than 95% is exported). Hearing devices alone make up 30% of the market. Still, 37 WISERTrade: State Database 38 Ibid. 39 U.S. Commercial Service: 2015 Denmark Country Commercial Guide 40 Research and Markets: The Medical Device Market: Denmark

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American medical technology has a fair market share and more than 100 local distributors are dedicated to representing foreign products in the Danish or entire Nordic market. These distributors typically attend the MEDICA trade show in Germany, which MITC attends each year with Maine companies.41 The largest product group consumed is medical and diagnostic equipment followed by medical and surgical instruments and appliances, and ophthalmic instruments. There has been a significant increase in sales of disposable products like syringes, needle, and catheters. 42 Market Projections The market is projected to grow at an annual rate of between 1.4%43 and 1.9% in US$ terms and 3.8% in local currency terms over the 2013-2018 period to attain a value of US$ 1.74 billion by 2018. The market is being constrained by slow economic growth, which is increasing pressure to scale back the country’s generous welfare system.44 Opportunities & Best Prospects Preventive care and health promotion have been given an increasingly high priority in Denmark, and increases in public expenditure on medical technology are evident. While innovative technologies remain in great demand, cost efficiency is also of high priority, and any technology that allows for treatment and monitoring outside of the hospitals will be well-received. Denmark ranks high in technological readiness, which should encourage U.S. companies to pursue the market. Currently, the greatest opportunities lie within new hospital building, as well as furnishing these institutions with medical equipment. Denmark will build 16 new hospitals, including 8 super hospitals, by 2020 with a budget of 7 billion US$, where investments in the best medical technology can be expected. A potential opportunity during the restructuring is that government policy supports the patient's right to obtain treatment within a three-month timeframe (by offering patients the right to choose a hospital for treatment or to receive private treatment should the waiting list be too long). This “relaxation” of patient treatment may boost private healthcare practices and give rise to new sales channels.45 Trade Shows: Lægedage | SCANDEFA Resources: Ministry of Health | The National Board of Health |The Danish Medicines Agency |

National Institute of Public Health | The National Serum Institute | Danish Regions | The National Association of Local Authorities | SKI (National Procurement Ltd. Denmark) | Medicoindustrien | The National Board of Social Services | The Danish Rehabilitation Group

41 U.S. Commercial Service: 2015 Denmark Country Commercial Guide 42 Emergo Group: Denmark Medical Device Industry 43 Espicom: Denmark Medical Devices Report 44 Research and Markets: The Medical Device Market: Denmark 45 U.S. Commercial Service: 2015 Denmark Country Commercial Guide

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Medical Equipment Trade Overview Local production is focused on consumables and patient aids, primarily hearing aids, leaving the majority of the market heavily dependent on imports in other areas. Imports supply around 78% of the total medical device market.46 In 2014 Denmark imported US$ 1.54 billion of medical equipment. The top five sources of imports were Germany, Sweden, Netherlands, Belgium, and the United States.47 US Medical Equipment Exports to Denmark (US$)48

Product 2014 %2013- 14 Total, All Medical Equipment 195,625,121 -11.80 1 Hearing Aids 54,453,762 -23.82 2 Electro-Diagnostic Apparatus & Parts 28,111,006 -19.23 3 Needles, Catheters Etc & Parts 23,669,996 3.83 4 Orthopedic Equipment, Prosthetics, and accessories 17,860,294 -12.93 5 Medical Equipment, not elsewhere specified 16,222,274 -14.85 6 Ultrasonic Scanning Apparatus 10,370,938 4.60 7 Orthopedic or Fracture Appliances, Parts & Accessories 6,440,940 3.90 8 Instruments Etc Using Optical Radiations Nesoi 5,845,449 4.50 9 Ophthalmic Instruments & Parts not otherwise specified 5,090,015 -6.20 10 X-Ray Equipment not elsewhere specified 4,133,433 -0.69

New England Medical Equipment Exports to Denmark (US$) 49

Description 2014 %2013- 2014 TOTAL ALL COMMODITIES 22,696,444 7.31 1 Electro-Diagnostic Apparatus Not elsewhere specified 13,251,173 -4.26 2 Ultrasonic Scanning Apparatus 2,228,313 -17.67 3 Microscopes, 1,328,949 -- 4 Tubular Metal Needles & Needles For Sutures & Parts 1,171,536 90.62 5 Medical Equipment, not elsewhere specified 1,072,905 5.67 6 Med Needles & Catheters And Parts, note elsewhere specified 953,705 577.03 7 Spectrometers, Spectrophotometers and Spectrographs using Optical Radiations 759,243 86.78 8 Magnetic Resonance Imaging Apparatus 426,065 23.90 9 Instruments Using Optical Radiations Not Elsewhere Specified 394,524 -26.09 10 Parts & Accessories For Compound Optical Microscopes 341,228 -14.15

46 Research and Markets: The Medical Device Market: Denmark 47 WISERTrade: EU Harmonized Query 48 WISERTrade: State Database 49 Ibid.

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Denmark Infrastructure Road, Rail, Air & Sea Transport Introduction With an already thoroughly modern and extensive infrastructure, Denmark is in the process of making considerable infrastructure investments. As part of a strategic plan, the government will carry out major projects through at least 2020. The projects will heavily feature railways and metro lines, but will also include upgrades and expansions to bridges, roadways, airports, and ports, as well as bicycle and pedestrian infrastructure. Infrastructure allocations in this period are to exceed US$ 15 billion, providing ample opportunities for Maine businesses to bid on projects, particularly as sub-contractors and suppliers. Outside of a traditional transportation infrastructure, the Danish market provides opportunities for related and complementary business in the oil & gas, clean energy, and green building sectors. Infrastructure Overview Denmark’s current infrastructure is excellent everywhere, and all major islands and the peninsula of Jutland are inter-connected by a network of tunnels and bridges. There are 73,000 km of paved roads in Denmark, including 1,000 km of freeway.50 Approximately 5 % of all roads are state roads, while the remaining 95 % are owned primarily by local municipalities.51 The Danish railway network consists of 2667 km of railway of which 81 % is managed by the public agency Rail Net Denmark (Banedanmark). The railway network is extensive and integrates the hinterland regions into the main transport network. 2,700 train departures are initiated every day amounting to almost one million trains a year on Danish railway tracks.52 There are twelve civilian airports besides Copenhagen International Airport (Kastrup), which is a major international airport and serves as the Scandinavian hub for the Scandinavian Airline System (SAS). Copenhagen Airport handles 60 scheduled airlines and serves more than 62,000 passengers per day; 23.3 million passengers passed through the facility in 2012, making it the busiest airport in the Nordic countries. Unlike other Scandinavian airports, a considerable share of the airport’s passengers is international. 53 Denmark has more than 130 commercial ports of various sizes and areas of expertise from large scale shipping terminals engaged in international trade to small municipal ports serving the local industries. On the west coast of Denmark ports are generally located in areas of low population density, providing ample room for expansion. At the same time, however, they are faced with challenges of low water depths due to continuous pressure of natural erosion. In eastern parts of Denmark, the situation is generally reversed as water depth is often plentiful while many ports are situated near urban areas.

50 U.S. Commercial Service: 2013 Denmark Country Commercial Guide 51 Ministry of Transport: The Danish Transport System 52 Ibid. 53 U.S. Commercial Service: 2013 Denmark Country Commercial Guide

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Danish ports are central to the national transport of passengers and handle more than 44 million passengers a year. More than 1 million tons of fish are landed every year in Danish ports - worth some 3 billion DKK (about US$440 million). Around two thirds of all Danish exports pass through the country’s seaports.54 Other major ports are Esbjerg, Aalborg, Aarhus, and Fredericia. The port of Esbjerg (southwestern Jutland) is the center for offshore oil and gas activities in Denmark.55 Denmark is one of the leading nations for pedestrian and bicycle friendly infrastructure, particularly in the larger cities, with about 9,000 km of separated bike paths and bike lanes in cities and in the countryside. Over 90% of the population owns a bicycle and 20% of all commuter traffic is by bicycle.As new infrastructure is developed, bicycle and pedestrian oriented systems will continue to be a major focus.56 Infrastructure Investments and Opportunities In 2009, seven out of eight parties in the Danish Parliament agreed on a number of general principles and concrete initiatives as part of a new green transport policy that applies until 2020. The agreement was followed by additional accords in 2009, 2010 and 2011. These agreements have produced a large number of infrastructure investments and projects. Some of these projects have already been completed, while many others are ongoing or yet to be started. These infrastructure agreements have amounted to a historically comprehensive effort to develop Denmark’s transport system, with investments of over 100 billion Danish Kroner (about US$ 15 billion) through 2020.57 The national transport strategy allocates funds for specific transport projects including substantial investments in railways, infrastructure for busses and a new metro line in the city of Copenhagen. The strategy also includes investments in ports, new and improved roads, infrastructure for bicycles and traffic safety initiatives. Many have an international dimension. Long term planning has three central focuses: improving the main roads of Jutland, connecting the different parts of Denmark through fixed links, and further developing public transport and main roads in the Copenhagen region.

54 Ministry of Transport: The Danish Transport System 55 U.S. Commercial Service: 2015 Denmark Country Commercial Guide 56 Ministry of Transport: The Danish Transport System 57 Ministry of Transport and Building: The Danish Infrastructure After 2020

65.70%

11.20%

9.70%

8.10%

4.60% 0.70% Private Cars

Large Vans

Buses, Taxis, and Couches

Train

Share of Passenger Distance Travelled by Mode of Transport

Source: Ministry of Transport: The Danish Transport System

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With around US$ 10bn worth of infrastructure projects currently under construction according to our Infrastructure Key Projects Database, and another US$11billion in the planning or pre-construction phases, ample opportunities are available in the sector. Reflecting the substantial infrastructure investments, the Danish construction industry is projected to grow at an average annual rate of 2.3% in real terms through 2024, largely on the back of these transportation projects.58

Value of Projects, by Stage of Development (Billions of US$)

Source: BMI Research: Denmark’s Construction Sector Boosted by Infrastructure Investment

Value of Projects, by Sector

Source: BMI Research: Denmark’s Construction Sector Boosted by Infrastructure Investment

58 BMI Research: Denmark’s Construction Sector Boosted by Infrastructure Investment

0

2

4

6

8

10

12

Announced/In Planning

In Tender Contract Awarded Under Construction

21%

52%

9%

17%

1%

Roads & Bridges

Rail

Power Plants & transmission Grids

Education/Healthcare

Other

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The Danish government is taking the primary role in financing the investments, but the significant opportunities are attracting private investment as well. First State Investments has raised €2 billion (about US$ 2.17) for its European Diversified Infrastructure Fund. At least 49 institutional investors – with a majority being pension funds and insurance companies – have backed the fund, coming from Europe, Asia, Australia, the Middle East, and North America. The fund lists Denmark as one of its core destinations for its capital.59 Projects and Opportunities: Rail Denmark is engaged in one of the largest rail renovation projects in Europe, running through 2020.60 40% of infrastructure projects under construction or in planning are rail. The rail sector is projected to be a key driver of economic growth over the next decade. The will continue to be a proliferation of new routes and upgrades to existing networks.61 Denmark announced a major project in early February of 2015, appointing Arup and Ramboll, who have established themselves as key players in the Danish rail sector, for a joint venture to design Copenhagen's new orbital light rail project - the Ring 3 line. The US$ 650 million project will see 27km of double-track line built along with 27 stations, which will follow the route of the Ring 3 motorway around the edge of Copenhagen, linking 11 municipalities, from Lundhofte in the north to Ishoj in the south. Daily ridership is projected to be around 43,000 passengers per day, or 13-14 million passengers per year.62 Another major high value opportunity is the multimodal Femern Tunnel Link to Germany. The 25.7 billion Danish Kroner (US$ 3.75 billion) project will establish a 19km fixed link across the Fehmarn Belt between Denmark and Germany and is expected to open in 2020.63 It will consist of a combined motorway and electrified double track railway. Danish government is responsible for the planning, designing, financing, construction and operation of the fixed link, which will be owned by Denmark.64 An enlargement of the Copenhagen Metro is also currently under construction. It will extend the system with an additional circle line of 15.5 km. The new City Circle (Cityringen) will serve 17 stations and provide efficient and reliable public transport to areas in the city, which are densely populated. The new metro lines, M3 and M4, are expected to be ready for operation in 2018.65

59 Ibid. 60 United Kingdom Trade and Investment: Doing Business in Denmark 61 BMI Research: Opportunities Rolling in from Denmark’s Rail Infrastructure Investment 62 Ibid. 63 United Kingdom Trade and Investment: Doing Business in Denmark 64 Ministry of Transport: Danish Infrastructure Investments 65 U.S. Commercial Service: 2015 Denmark Country Commercial Guide

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Project Name Value (US$ Millions)

Size Companies End Date

Fehmarnbelt Immersed Tube Tunnel

6120 16km Teknisk Erhvervsskole Center (Design/Architect), Fermern A/S (Financier), Ramboll (Consultant/Project Management), Arup Engineering firm (Consultant/Project Management)

2021

Nordhavn Line, Copenhagen

150 3km Zublin International (Construction), Metroselskabet (Operator), Hochtief Group (Construction)

2019

Ringsted-Holeby Railway Project

1640 115km N/A 2021

Copenhagen - Ringsted railway

1830 60km Rail Net Denmark (Construction), MT Hojgaard (Construction), Sweco (Design/Architect), Vossing (Design/Architect), EKJ consulting engineers ltd (Design/Architect), Aarsleff Bilfinger Berger (Construction), Barslund (Construction), CG Jensen (Construction), NIRAS (Design/Architect)

2018

Copenhagen Cityringen Metro Project

3200 17km Salini Group (Construction), Maire Tecnimont SpA (Construction), SELI Tecnologie (Construction)

2019

Northwest Railway Extension

258 20km Cowi (Design/Architect), Atkins (Design/Architect), Rail Net Denmark (Operator)

2014

New Signalling System (ERTMS) for Danish Railway Network

394 N/A Ramboll (Design/Architect), Nokia (Equipment), Siemens (Equipment), Thales (Operator), Shanghai ALSTOM Transport Electrical Equipment Co(SATEE) (Equipment), Banedanmark (Operator)

2021

Aarhus Modern Light Railway Line - Phase I

N/A 12km Ministry of Transport and Midtjylland region (Sponsor), Aarhus Municipality (Sponsor), Punj Lloyd Ltd (Consultant/Project Management), AP Moller Maersk (Design/Architect), Carl Bro (Grontmij) (Design/Architect), NIRAS (Design/Architect), Systra (Feasibility), Cowi (Feasibility)

2016

Copenhagen Ring 3 Line 610 27km

Ramboll (Design/Architect), Arup Engineering firm (Consultant/Project Management)

2021

Sydhavn Line, Copenhagen

1300 N/A N/A 2023

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Road In addition to rail, Denmark is engaged in significant expansions and upgrades to road systems to reduce congestion around major metropolitan areas, improve internal transportation, and strengthen links to neighboring countries. Ongoing road projects include:

• Køge bugt motorvejen • Motorring 4 – Tværvej N • Hørsholm S – Øverødvej • Tuse N – Herrestrup • Elverdam – Regstrup • Slagelse omfartsvej • Næstved omfartsvej • Nykøbing Falster omfartsvej • Nr. Aaby – Middelfart • Skærup – Vejle N • Riis – Ølholm – Vejle • Brande omfartsvej • Funder – Låsby • Sdr. Borup – Assentoft

Planned road projects include:

• Isterød – Hørsholm S • Tværvej – Frederikssund • Roskilde fjord forbindelsen • Solrød S – Køge • Regstrup – Kalundborg • Sakskøbing – Rødby havn • Odense V – Gribsvad • Kolding – Fredericia • Søbyvad – Mundelstrup • Viborg – Rødkærsbro • Herning – Holstebro • 3. Limfjordsforbindelse

Resources: Ministry of Transport I Danish Road Directorate | Danish Transport Authority |

Copenhagen Metro | Sund & Bælt | Rail Net Denmark | Visit Denmark

49%

18%

13%

5%

3%

18%

TYL Haminan kehä (YIT/KMS)

Skanska Infra Oy

Destia Oy

Soraset Yhtiöt Oy

Lemminkäinen Infra Oy

Others

Contractor’s Market share, Roads, 2011 (%), Denmark

Source: Ministry of Transport: Danish Infrastructure Investments

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Infrastructure: Oil & Gas66 Overview Denmark’s net energy usage reached self-sufficiency in 1997, lasting until 2013. The Danish Energy Authority’s (DEA) most recent forecast shows that Denmark can maintain its near self-sufficiency in oil and natural gas for another ten years or so, based on known reserves. However, on the basis of experience, the DEA expects that the use of innovative recovery technology and more discoveries resulting from exploration can uphold Denmark’s self-sufficiency in oil and natural gas for an additional ten years. Oil production has been steady over the past few years, producing more than 215,000 barrels of oil per day. In total, oil production accounts for roughly DKK 40 billion (US$ 7.3 billion) per year and gas production for about DKK 10 billion (US$ 2 billion) per year. Production has fallen modestly and is expected to decline in the next three to five years as production from most fields has peaked, and special efforts are required to prevent a major drop in production However, Denmark has a manifest interest in the oil companies recovering as much of the oil and gas from the North Sea as possible. This is an important source of financing for the Danish state, but production requires increasingly high energy-intensive recovery methods. As the output of Danish reserves falters, oil extraction in the formerly-ice-bound Northern regions of Greenland has expanded into a promising sector of the oil and natural gas market. Consequently, there will be ample opportunities for innovative and improved extraction techniques, particularly as a broad parliamentary majority wishes to identify the possibilities for improving energy efficiency in production. Based on a development plan submitted by Hess Denmark, increased production is expected from the South Arne Field, and DONG Energy E&P expects to bring the Hejre Field on stream in 2014. In the longer term, DONG Energy E&P’s Svane discovery holds interesting potential, as gas deposits in Svane may prove even larger than those in the Tyra Field, which is projected to produce a total of more than 100 billion m3 during its lifetime, corresponding to 25-30 years of natural gas consumption in Denmark. Prospects and Opportunities After almost 50 years of exploration in the Danish sector of the North Sea, new discoveries are still being made. Two exploration wells were drilled in 2010 and both resulted in new oil discoveries – Solsort and Sara. To date, Danish oil and gas production has been carried out exclusively from offshore installations in the North Sea. Production is currently derived from 19 fields, of which 15 are operated by Mærsk Olie og Gas A/S, three by DONG E&P A/S and one by Hess Denmark ApS. Production takes place from 283 active production wells, of which 198 are oil wells and 85 gas wells. In addition, 108 active water-injection wells and 5 gas-injection wells contributed to production. By drilling 12 new wells, Maersk plans to expand productivity of their operation in the Tyra East field – increasing oil extraction by 3.3 million cubic m of oil and 4.6 billion cubic m of natural gas. In 2011, the number of new exploration wells was the highest for ten years. According to the oil companies’ budgets, more than DKK 1 billion (US$ 150 million) will be invested in on- and offshore oil and gas exploration in the Danish sector in the coming years. 66 U.S. Commercial Service: 2015 Denmark Country Commercial Guide

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Onshore, there are plans for the drilling of two wells. It is five years since the last onshore well for oil and gas was drilled in Denmark. In the North Sea, the drilling of four to six wells is anticipated. Some of the planned wells will test new exploration models. The Danish Energy Authority’s (DEA) approval of new development plans is conditional upon the operators’ choosing the Best Available Techniques (BAT), when this is financially reasonable. This means that in each individual case the operators must investigate the potential for using more energy-efficient alternatives.

Infrastructure: Clean Energy67 Overview Denmark has a long tradition of using renewable energy and has sought to increase its energy self-sufficiency since the global energy crisis in 1973. The first subsidies for the construction and operation of wind turbines and biomass plants were introduced in 1981, and a string of energy agreements followed in the ensuing decades, all with the purpose of increasing energy self-sufficiency increasing production of renewable energy. In 1998, Denmark reached its goal and became a net exporter of energy. Denmark has the lowest energy intensity ratio in the EU. Gross energy consumption has only increased 6% from 1990 to 2013 (0.3% per year), although GDP grew by almost 50%. This led to a drop in primary energy intensity of 18.3%, or 1.4% per year. Over the same period, CO2 intensity decreased by 28%, due mostly to switching from coal to natural gas, increased use of renewable energy, and district heating. In 2014 alone, CO2 emissions fell by 7.7%. Denmark’s gross inland consumption of energy is less than 1.1%. Energy savings are being pursued for environmental as well as commercial purposes, as they contribute to growth and business development while increasing security of supply. The Danish government has put forward an ambitious plan that 100% of Denmark's electricity and heat will come from renewable energy by 2035 and that, by 2050, the entire energy supply -- electricity, heat, industry and transportation -- will come from renewable energy sources. 39% of the current electricity generated in Denmark comes from renewable energy sources. Best Prospects/Services Concerns over global warming and energy security have placed renewable energy and CO2 emissions reduction high on the Danish political agenda. Denmark maintains that energy technologies should be promoted through a combination of market mechanisms and political regulation. The government wishes to secure a future energy supply that is safe and reliable, environmentally friendly, and supports growth and competitiveness. Denmark has excellent wind resources, thanks to its flat terrain and proximity to the sea. Climate and hydrology allow high yields of biomass from agriculture, although land itself is a scarce resource due to the country’s small size and relatively high population density. The long Danish coastline could allow

67 U.S. Commercial Service: 2015 Denmark Country Commercial Guide

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wave energy to become important in the future. Photovoltaics and solar heating could also contribute in the future, though their cost effectiveness is not as attractive as in sunnier countries to the south. Denmark’s power system is presently characterized by combined heat and power (CHP) plants delivering heat to district heating systems, and a high proportion of wind power. The CHP plants are a combination of a few large plants fueled mainly by coal and natural gas, and a large number of distributed CHP plants using natural gas, biomass and municipal waste. Fuel for road transport is dominated by gasoline and diesel. In early 2012 the Danish government presented its Energy Strategy 2050, which outlines how Denmark should become independent of coal, oil and gas by 2050 and significantly reduce emissions of greenhouse gases. The strategy includes a strong expansion of renewable energy from wind, biomass and biogas; if adopted, it will lift the share of renewables to one third of the total energy consumption over the next ten years. The long-term vision is a total phase-out of fossil fuels in Denmark. According to Risø-DTU, the National Laboratory for Sustainable Energy, the most important measures for achieving these results are: 1) Energy savings; 2) More efficient conventional vehicles and plug-in hybrid vehicles; 3) Wind power; 4) Biomass: 5) Flexibility; 6) Infrastructure planning; and 7) Energy markets. Infrastructure: Green Building68 Overview There are approximately 2.7 million homes in Denmark, with an average of 560 square feet per person. In addition, there are almost 64,000 public buildings and 150,000 commercial buildings. Operation of buildings accounts for between 30 and 40% of total energy consumption in Denmark. The Danish government recognizes energy efficiency in buildings as one of the most cost-effective ways to combat climate change. At the same time, there is considerable focus on indoor climate and health conditions. Those, together with an overall goal of becoming independent of fossil fuels, are the main drivers behind quality building in Denmark. Green building has many different components and involves several different industries. In Denmark, green building is considered to embrace all activities and routines that take place around a household -- from sustainable architecture and building materials to ventilation, water supply and heat production, and from renewable energy supply and energy efficiency to sewerage systems and waste management -- not just the building process. Ultimately, it also extends to energy efficient lighting and major appliances. Danish households consume on average 34 gallons of water per day per person. In order to preserve the valuable ground water, as well as to increase energy efficiency, green building initiatives encourage water efficient toilets, taps and showers, water free urinals and recycling of rainwater for things like car washing and garden watering. It has recently become permissible to recycle rainwater (from roof gutters only) inside the house for toilet flushing and laundry. Approximately 61% of Danish households are supplied with water-based district heating. Oil-fired 68 U.S. Commercial Service: 2015 Denmark Country Commercial Guide

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burners are now present in only 200,000 Danish homes. The oil-fired burners must be inspected annually, and public authorities offer free consultation as to how they are best replaced. In 2016, however, it will no longer be permitted to install oil-fired burners in existing buildings where collectively supplied district heating and natural gas are available. Natural gas, which was introduced in the 1980s, is seen in 15% of Danish homes today. Denmark is self-sufficient and gets its natural gas from the North Sea; it is considered the cleanest of fossil fuels. With the current consumption level, the supply will last at least 20 years into the future. Consumption of wood pellets is modest, but becoming increasingly popular as it is recognized as a CO2 neutral alternative to fossil fuels. Denmark’s annual consumption is currently a little more than 1 million tons, mainly consumed by private homes but also commonly seen in thermal power stations. Close to 95 % of wood pellets are imported. The major part comes from the Eastern Europe. Installation of electrical heating in new buildings and buildings that have access to a central water-based heating system is prohibited. Most renewable energy sources for electricity in buildings come from solar and biomass. Although Denmark is a world renowned net wind-energy producer, the general attitude regarding wind turbines remains, “fine, but not in my backyard.” On an annual basis, Danes produce 13 million tons of waste, which is equivalent to approximately 28 pounds per person per day. Waste from households makes up one fourth of total waste. 66% of the waste is recycled. Some households sort organic waste and make compost, but it is not required by law. Waste disposals in sinks are not common in Denmark, mainly because the sewerage system is not built to handle it. Few municipalities allow the use of disposals. Best Prospects & Opportunities The most important competitive parameter in the Danish market for building materials is quality, and foreign suppliers must meet very high standards. A U.S. manufacturer can differentiate itself by offering price competitive products and efficient logistics and service. New and innovative solutions to green building will have good potential. Local competition, particularly in building materials such as insulation and windows, is quite strong. High quality and documented efficiency are important parameters. U.S. companies may find good prospects in green building consultancy (ESCOs) and new products and methods. Intelligent housing and office buildings with the use of sensors to control heat production etc. are interesting prospects. The U.S. may also be ahead of Denmark with regard to heat pump solutions. As the Danish government is trying to stimulate the economy through massive investments in fixed assets, there will be a possibility for American firms to supply materials and equipment. Denmark has ambitious goals for green building. All new buildings are required to increase energy efficiency by 25%. At the moment there is a voluntary goal of 75% energy savings in buildings by 2020. Denmark has invested substantial resources in promoting energy efficiency in buildings.

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Denmark Green Shipping Maritime Sector Overview Denmark is a word leader in the international sea freight industry, with the 18th largest merchant fleet in the world and nearly 10% of global trade transported on ships under Danish control.69 The maritime industries are of great importance to the Danish economy. Approximately 115,000 people work in the Danish maritime sector and affiliated industries supplying the shipping sector70. Between 2004 and 2009, the industry accounted for an average of 7.7% of the country’s overall economic output and 3% of total employment. Including indirect effects, these contributions were 9.4% and 4.4% respectively.71 With around 11,600 shipping related companies,72 Denmark is an important hub for international sea commerce, and its merchant fleet has registered the fastest growth among EU countries in recent years, reaching 633 ships in 2013.73 Compared with 2008, the Danish fleet has increased by almost 50%. Much of this growth has been in the special vessels fleet, which has doubled, with 52 new ships ordered in 2011 alone.74 Involvement in the installation of offshore wind turbines and offshore oil and gas extraction has played an important role in the rapid growth of the Danish merchant fleet.75 The Danish maritime industry also enjoys a number of structural strengths that should allow it to continue to grow. These strengths include:

• Very high gross earnings from shipping • An average age of the fleet that is significantly less than the world average • A strong international reputation for Danish shipping • The location of a number of leading international companies in shipping and equipment in

Denmark • Access to a well-qualified workforce and strong education institutions within the sector • A smoothly operating maritime authority • A competitive taxation system • Good cooperation between shipping companies and the maritime administration76

69 American-Danish Business Council 70 SmartComp: Maritime Sector Developments in the Global Markets 71 Ministry of Economic and Business Affairs: The Danish Maritime Cluster – an Agenda for Growth 72 Ministry of Foreign Affairs of Denmark: World Class Shipping and Operations 73 Ministry of Foreign Affairs of Denmark: Focus on the Maritime Sector 74 SmartComp: Maritime Sector Developments in the Global Markets 75 Ministry of Foreign Affairs of Denmark: Focus on the Maritime Sector 76 Ministry of Economic and Business Affairs: The Danish Maritime Cluster – an Agenda for Growth

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Growth in the Largest European National Merchant Fleets, 1980-2014

Source: Ministry of Foreign Affairs of Denmark: Focus on the Maritime Sector

Danish Maritime Sector SWOT-Analysis77

Strengths Weaknesses • Strong shipping nation with leading

international companies • Strong commercial competence • Cross-sectoral cooperation • Stable framework conditions and flag

management structures

• High cost level compared with Asian competition

• Limited R&D activities and lack of coordination

Opportunities Threats • Increased strategic R&D activity • Increasing access to growth markets,

such as offshore wind • Green maritime technology

• Competition from low cost countries • Lack of human resources & competence

(naval architects, offshore competence • Protectionism • Failure of other countries to follow

environmental regulations Green Shipping Efforts to move international shipping towards a more environmentally friendly model are gaining momentum across the globe. Already a world leader in the maritime industry, Denmark is well on route towards establishing itself as a key player in green shipping. In close cooperation with industry, the Danish government set a major goal in 2008 to develop and deploy green technologies throughout its merchant fleet. In conjunction with implementing environmentally friendly shipping, the government is actively seeking to attract international partners and investors in Denmark’s niche maritime sectors, including servicing offshore energy industry and sailing in arctic waters.78 The government-initiated The Green Ship of the Future (GSF) project focuses on developing technologies to reduce the shipping industries emissions of CO2, oxides, sulpher, and nitrogen, as well as minimize other harmful environmental and health impacts. The overall target of GSF is to reduce total

77 SmartComp: Maritime Sector Developments in the Global Markets 78 Danish Maritime Authority: Opportunities and Challenges for the Danish Realm’s Maritime Industry in the Arctic

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CO2 emissions by 30 %, total SOx emissions by 90% and total NOx emissions by 90%. Individual GSF projects have come close or even surpassed these targets by achieving individual reductions of up to 25% for CO2, up to 98% for SOx and up to 80% for NOx. Danish ship-owners have introduced products developed within GSF projects on more than 40 ships from.79 In some cases, these green ship technologies have already become standard products, especially with respect to machinery equipment and onboard systems.80 The GSF approach calls for a holistic adjustment of the entire industry, including shipping technologies, machinery, propulsion, operation, logistics, ports and terminals. These efforts open up considerable opportunities for Maine suppliers of innovative and environmentally friendly technologies, equipment, and services to engage with the Danish shipping industry. In cooperation with government efforts, the Danish Shipowners’ Association launched an initiative in 2008 to reduce the Danish merchant’s fleet total carbon emissions by 25% by 2020. The target was close to being met just five years later in spite of tonnage being shipped having risen by 60%. Danish shipping companies have cut fuel consumption through technical improvements and implementing climate-friendly sailing, including optimized shipping routes and “slow steaming”, which saves fuel by reducing speed.81 The Danish merchant fleet has overall cut its CO2 emissions by almost 50% proportionate to the dead weight tonnage since 2008. In addition to this significant increase in energy efficiency, Danish ships have achieved a considerable lowering of their emissions of sulphur and other air pollutants. The Danish maritime industry has contributed to projects that have led to more than 20% reduction in fuel consumption, 90% decrease in SOx and 80% decrease in NOx emissions.82 Danish maritime equipment manufacturers and ship designers are on the preferred maker’s lists of ship-owners around the globe. They are chosen for their quality, flexibility, innovation and high-end services offering solutions for ballast water treatment, air emission reductions and energy efficiency. Danish maritime technologies and solutions are often developed in close cooperation and partnerships between Danish shipping companies, equipment manufacturers, shipyards, knowledge institutions and public authorities. This collaborative approach fosters innovation and the development of competitive, easy-to-integrate solutions that work in practice.83 Opportunities and Best Prospects The Danish maritime industry is a market leader in a number of areas, including engine and propeller design, marine coating, pumping systems and navigational and safety equipment.84 Key areas for green shipping technologies in Denmark include: engines, fuel, waste heat, scrubber systems, exhaust gas recirculation, trim optimization, cooling systems, operations, and turbochargers, and biocide-free paint.85

79 Danish Maritime: Green Ship of the Future 80 Ibid. 81 Ministry of Foreign Affairs of Denmark: Focus on the Maritime Sector 82 Ministry of Foreign Affairs of Denmark: New Global Agreement Will Boost Green Shipping 83 State of Green: A New Maritime Era: Danish Strongholds in Green Maritime Solutions 84 Danish Maritime Authority: Blue Denmark 85 Danish Maritime: Green Ship of the Future

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The Danish shipping giant Maersk, one of the largest shipping companies in the world, is making considerable efforts to revamp its fleet to leverage more environmentally sensitive technologies. In 2014, it announced plans to reduce CO2 emissions per container moved by 60% by 2020. With over 400 islands throughout the nation and strong sea links to neighboring countries, Denmark has a large passenger ferry sector in addition to its international shipping industry. The ferry operator Scandlines is making substantial investments in green technologies. It was the first ferry operator in the world to make large-scale use of an on-board hybrid propulsion system, launched in 2013, which enables Scandlines to reduce CO2 emissions by up to 15%. It plans to transition to 100% battery propulsion by 2018. With 34,000 departures each year, Scandline offers considerable potential for international suppliers and outfitters, not only for its ferries but also for the port infrastructure necessary to service them. The Danish shipping Company, Uni-Tankers outfitted a vessel in 2013 with emission reducing paint, highlighting the growing market potential for high-performance and environmentally friendly paints and coatings. Hull coating can significantly lower fuel consumption and CO2 emissions. For a 250 meter supertanker, optimized coating can reduce fuel consumption by 6-8% by minimizing drag caused by fouling and creating a smoother surface. In addition to the private shipping industry, the Danish navy is also committing to move towards greener operations. The Ministry of Defense’s Climate and Energy strategy 2012-2015 established guidelines and goals for environmentally friendliness, particularly in relation to fuel consumption. The navy is considering a number of projects including salt water cooling for ventilation, replacement of lighting with LED, reconverting propellers, adjustments of pumps catalysts, and ballast water purification and the use of biofuel.86 Trade Overview U.S. Exports to Denmark of Ships, Boats, and Floating Structures (US$)87

Product 2014 %2013- 14 TOTAL 1,253,999 25.08 1 Motorboats, Other Than Outboard Motorboats 400,741 375.28 2 Lght Vessel, Fire Float, Floating Cranes/Docks Etc 312,447 6,174.04 3 Floating Structures Except Inflatable Rafts 237,093 -10.49 4 Yachts Etc For Pleas/Sport Nesoi; Row Bts, Canoes 213,433 56.16 5 Sailboats, With Or Without Auxiliary Motor 56,630 -50.76 6 Inflatable Rafts 18,654 -51.20 7 Inflatable Yachts, Vessels, For Ples, Sports 9,126 -95.60 8 Vessels,(Includ Lifeboats,Other Than Row Bt),Nesoi 5,875 Infinity 9 Cruise Ships,Excursion Boats And Similar Vessels 0 -100.00 10 Vessels,Nesoi,For Transport Of Goods And Persons 0 NaN

86 State of Green: A New Maritime Era: Danish Strongholds in Green Maritime Solutions 87 WISERTrade: State Database

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U.S. Exports to Denmark of Composites, Advanced Materials, & Related Products (US$)88 Product 2014 %2013-14 All Composites & Related Products 48,982,333 10.94 1 Plastics And Articles Thereof 40,507,072 15.77 2 Impregnated Etc Text Fabrics; Tex Art For Industry 4,375,245 -23.64 3 Manmade Staple Fibers, Incl Yarns & Woven Fabrics 1,376,440 21.59 4 Wadding, Felt Etc; Sp Yarn; Twine, Ropes Etc. 1,019,614 -15.70 5 Manmade Filaments, Including Yarns & Woven Fabrics 955,732 -0.13 6 Spec Wov Fabrics; Tufted Fab; Lace; Tapestries Etc 748,230 465.22

New England Exports to Denmark of Composites, Advanced Materials & Realted Products (US$)89

Product 2014 %2013- 2014 TOTAL ALL COMMODITIES 1,808,282 -45.47 1 Plastics And Articles Thereof 1,466,629 -20.95 2 Impregnated Etc Text Fabrics; Tex Art For Industry 200,393 -78.96 3 Manmade Filaments, Including Yarns & Woven Fabrics 118,625 -74.24 4 Wadding, Felt Etc; Sp Yarn; Twine, Ropes Etc. 15,348 -63.55 5 Spec Wov Fabrics; Tufted Fab; Lace; Tapestries Etc 7,287 120.82 6 Manmade Staple Fibers, Incl Yarns & Woven Fabrics 0 -100.00

Denmark Other Opportunities The Danish market offers a number of promising opportunities for Maine businesses beyond the Life Sciences, Infrastructure, and Green Shipping industries highlighted in this report. Other high potential sectors, as identified by the U.S. Commercial Service, include:

• Agriculture • Computer Software and Information Technologies • Franchising • General Consumer Goods • Travel and Tourism Services

United Kingdom Trade and Investment further emphasizes market opportunities in:

• Food and Bevereages • Defense and Security • Design and Professional services • United Nations procurements

For information and market research on any of these sectors please contact MITC Trade Information Specialist Tom Conley at Conley@mitc.com or (207) 553-7708.

88 Ibid. 89 Iibid.

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NORWAY

Country Profile and Economic Overview A vibrant, stable democracy, Norway has a prosperous mixed economy, with a dynamic private sector, a large state sector, and an extensive social safety net. The country is richly endowed with natural resources - petroleum, hydropower, fish, forests, and minerals - and is highly dependent on the petroleum sector. The government controls key areas, such as the vital petroleum sector, through extensive regulation and large-scale state-majority-owned enterprises. With government revenues accounting for 54.8% of GDP in 2014, the government is deeply involved in the economy.90 Income and Consumers Norway is considered one of the world's wealthiest countries with a Gross National Income (GNI) per capita exceeding US$ 102,000 and GDP per capita based on purchasing power parities (PPP) exceeding US$ 67,000, ranked second among Organization of Economic Co-Operation (OECD) countries in 2014. Incomes are evenly distributed, making nearly every person a high value consumer. Unemployment rates are low, but edging up towards 4%. Interest rates and inflation likewise remain low, providing for strong financing options.91 Economic Performance After solid GDP growth in 2004-07, the economy slowed in 2008, and contracted in 2009, before returning to positive growth in 2010-14. GDP growth of 2.2% in 2014 and 2.7% in 2012 book ends weaker growth of 0.7% in 2013. Low oil prices negatively impacted growth in 2015. The government budget remains in surplus and Norway’s external financial position is exceptionally strong from a global perspective. The petroleum sector contributes about 30% of government revenue. In anticipation of eventual declines in oil and gas production, Norway saves state revenue from the petroleum sector in the world's largest sovereign wealth fund, valued at over US$ 870 billion in December 2014.92 Key Sectors The country is richly endowed with natural resources - petroleum, hydropower, fish, forests, and minerals - and is highly dependent on the petroleum sector, which accounts for the largest portion of export revenue. Norway is the world's third largest exporter of natural gas and tenth largest exporter of crude oil, making one of its largest offshore oil finds in 2011. Its large merchant shipping fleet is one of

90 CIA World Factbook: Norway 91 U.S. Commercial Service: Norway 2015 Country Commercial Guide 92 CIA World Factbook: Norway

Norway Country Profile • Population: 5,207,689 • Median Age: 39.1 years • Largest City: Oslo • Area: 304,282 sq. km • GDP: $499.8 billion • GDP Real Growth Rate: 2.2% • GDP per capita (PPP) $67,200 • Inflation rate: 2.0% • Unemployment rate: 3.5% • Currency: Norwegian Krone

Source: CIA World Factbook, 2014 est. * EuroStat, Sep. 2015

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the most modern among maritime nations and ranked the fifth largest by value. Other major industries, such as offshore shipping, shipbuilding, fishing and fish farming, information technology, pulp and paper products, and light metals processing have prospered as well.93 Relationship with European Union Although Norway rejected EU membership, its economy and regulatory structure are closely linked to the EU and it benefits from mostly free and unrestricted passage of goods and people with its neighbors. It is a member of the European Economic Area (EEA) agreement, which in practicality makes it part of the EU’s single market, except for fisheries and agriculture. It is also a member of the Schengen Agreement, which guarantees free movement of persons and the absence of internal border controls between 22 of the 28 EU member states, as well as Norway, Iceland, Switzerland, and Liechtenstein.94 Growth Prospects Given the country’s dependence on energy production, lower oil prices negatively impacted growth in 2015. However, the OECD projects growth to recover gradually in 2016 and 2017 as non-oil investment picks up in response to higher exports and some new oil investment projects start up. Aggregate demand will also be sustained by accommodative macroeconomic policies. Unemployment will rise but remain low in the OECD context. Inflation has been temporarily boosted by currency depreciation but is otherwise contained by remaining cyclical slack. The extensive welfare state is cushioning the impact of the economic slowdown on well-being and protecting the vulnerable. Over the long term its prudent use of its sovereign wealth fund – the largest in the world--should contribute to economic growth and stability. Norway annually uses up to 4% of the fund, its projected long term return, to help finance public expenses.95

Norway Trade Overview Norway has an important stake in promoting a liberal environment for foreign trade and its external financial position is exceptionally strong from a global perspective. Norway is the world's tenth largest exporter of crude oil and third largest exporter of natural gas. Its large shipping fleet is one of the most modern among maritime nations.96 Norway purchased the majority of its US$ 89 billion of imports in 2014 from Sweden, Germany, and China. The United States was the fifth largest source of imports by value. Norway sold the vast majority of its US$ 143 billion of exports to other European countries, with the US leading as its largest buyer outside of Europe. Major imports from the United States include aerospace, industrial machinery and computers, vehicles, and medical equipment.97

93 U.S. Commercial Service: Norway 2015 Country Commercial Guide 94 Ibid. 95 OECD- Norway Economic Forecast Summary 96 Ibid. 97 WISERTrade

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Norway Imports & Exports (Billions of US$)98 Imports by Country Exports by Country

From 2014 %2013- 14 All Imports 89.1 -0.71 1 Sweden 10.9 -8.32 2 Germany 10.6 -5.03 3 China 8.4 2.28 4 UK 5.8 0.29 5 USA 5.5 13.41 6 Denmark 5.4 -0.42 7 Netherlands 3.3 -4.66 8 France 3.0 2.30 9 Poland 2.9 -0.96 10 Italy 2.7 2.60

To 2014 %2013- 14 All Imports 143.8 -7.44 1 UK 32.2 -13.76 2 Germany 24.5 -8.30 3 Netherlands 19.3 14.48 4 France 8.8 -22.90 5 Sweden 8.2 -9.16 6 Belgium 6.8 -16.19 7 USA 5.4 -22.13 8 Denmark 5.3 -7.98 9 China 3.3 18.32 10 Poland 2.6 -7.28

Imports by Product

Exports by Product

Product 2014 %2013- 14 All Imports 89.1 -0.71 1 Industrial Machinery 13.1 1.68 2 Vehicles, Except Rail 9.1 -4.67 3 Electric Machinery 8.3 0.98 4 Oils & Fuels 4.7 -25.82 5 Articles Of Iron Or Steel 4.6 11.87 6 Furniture & Furnishings 3.3 2.42 7 Medical Instruments 2.8 7.15 8 Ships, Boats & Floats 2.8 1.11 9 Plastics 2.7 1.30 10 Pharmaceuticals 2.1 9.21

Product 2014 %2013- 14 TOTAL 143.8 -7.44 1 Oil & Fuels 93.0 -11.45 2 Seafood 10.5 4.26 3 Industrial Machinery 7.4 2.32 4 Special Classifications 4.7 -6.52 5 Aluminum Products 4.2 6.67 6 Electric Machinery 3.4 -3.37 7 Medical Equipment 2.3 4.36 8 Nickel Products 1.5 4.96 9 Ships, Boats & Floats 1.4 3.11 10 Iron & Steel Items 1.3 -27.33

U.S. Exports to Norway (Millions of US$99

Total U.S. Exports New England Exports Product 2014 %2013-14 Total Exports 4,421 -4.23 1 Aerospace 1,013 -33.63 2 Industrial Machinery 775 13.65 3 Vehicles, Except Rail 541 75.91 4 Medical Devices 427 9.52 5 Electric Machinery 322 -2.83 6 Oil & Fuels 290 -22.92 7 Special Classification 243 10.73 8 Chem, Prec. Met. & Rad. Mat. 129 54.72 9 Articles Of Iron Or Steel 73 5.29 10 Organic Chemicals 61 13.35

Product 2014 %2013- 14 TOTAL 189.6 -21.26 1 Aerospace 60.3 -46.34 2 Electric Machinery 30.8 -13.88 3 Medical Devices 30.4 17.46 4 Industrial Machinery 28.3 56.24 5 Precious Metals & Stones 8.6 1,244.09 6 Seafood 4.3 5.42 7 Vehicles, Except Rail 3.8 113.14 8 Special Classification 3.3 100.68 9 Pharmaceuticals 2.6 82.10 10 Ships, Boats and Floats 2.2 637.17

98 WISERTrade: EU Harmonized Query 99 WISERTrade: U.S. State Database

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Norway Life Sciences Overview Norway is one of the wealthiest countries in the world, and this is reflected in its expenditure on medical care for its citizens. With the exception of the U.S. and Switzerland, Norway spends more of its GDP (8% or US$ 22 billion) on healthcare than any other country in the world.100 Per capita health expenditure (PPP) was the second highest in the world in 2013, at US$ 6,300.101 The overall healthcare market grew 3.5% in local currency terms in 2014.102 The state-dominated medical system, covering 84% of total healthcare costs, is striving for technological advances and organizational improvements in a climate of budget constraints, a rise in chronic disease, and an aging population. By 2025, there will be 40% more senior citizens in Norway than today. 103 Market Structure The health and social welfare system in Norway is predominantly publicly financed, primarily through a national insurance tax. The national insurance, or social security, is a collective insurance plan to which all in Norway belong. Citizens requiring medical treatment in Norway are guaranteed medical care and user fees are limited – no one pays more than about US$ 150 per year for public health services.104 Medical Equipment Sector Estimates from the public health authorities and trade associations indicate that the total Norwegian market for medical and dental equipment and supplies reached over US$ 2 billion in 2014, growing 2% on an annual basis.105 Per capita spending on medical devices ranks fairly high at US$ 300.106 The various public healthcare authorities are estimated to account for about 90% of the purchases of medical equipment, whereas private (non-publicly funded) purchases account for the remaining 10%. About half of the medical equipment is sold to hospitals. Average annual growth in the sector is projected to be 3.9% through 2019.107 Promising sub-sectors for U.S. suppliers of medical equipment include: surgical instruments and equipment, diagnostic apparatus, ultrasound, orthopedic equipment, monitoring instruments and equipment, laboratory/pathology instruments and equipment, digital x-ray systems and customized ICT equipment.108 100 US Commercial Service: Norway 2015 Country Commercial Guide 101 World Bank DataBank 102 BMIResearch: Norway Pharmaceuticals & Healthcare 103 US Commercial Service: Norway 2015 Country Commercial Guide 104 Ibid. 105 Ibid. 106 Espicom: Norway Medical Devices Report 107 Ibid. 108 US Commercial Service: Norway 2015 Country Commercial Guide

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Drugs & Pharmaceuticals Sector The Norwegian pharmaceuticals market is estimated to value from US$ 2.7 billion,109 including value added tax (PRP - pharmacy retail price), to $3.5 billion in 2014.110 The pharmaceuticals market in Norway has experienced modest growth in recent years. Growth has been constrained by the government’s restrictive policy of fixing prices and reimbursement, and the patent expiry of several high turnover brands. The generic pharmaceuticals market has grown significant in recent years and accounts for 47% of the market. This trend is set to continue in part due to the introduction of the “step price scheme,” which aims to further reduce the price of generic medicines. The pharmaceutical market grew 1.26% in local currency terms from 2014 to 2015.111 Best prospects for U.S. suppliers of pharmaceuticals are still drugs associated with the treatment of cardiovascular diseases, high cholesterol, high blood pressure, asthma, mental (psychiatric) disorders, gastric ulcers, allergy, and pain relief.112

Norway Healthcare Expenditures

Source: World Bank DataBank

Opportunities and Best Prospects113 With a rapidly aging population, an increase in chronic disease and increasing healthcare costs, the Norwegian government has stated that telemedicine, e-health, and welfare technology are national priorities as they are important tools in the successful implementation of the key Integrated Health Care Reform of 2012. The authorities are implementing electronic patient journals, and have successfully launched a national health portal where citizens will be able to have access to their digital health information. Telemedicine is seen as an important part of future acute medical care, radiology (work-

109 Ibid. 110 BMI Research: Norway Pharmaceuticals & Healthcare Report 111 Ibid. 112 US Commercial Service: Norway 2015 Country Commercial Guide 113 Ibid.

7.8 8 8.2 8.4 8.6 8.8 9 9.2 9.4 9.6 9.8

0

1000

2000

3000

4000

5000

6000

7000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Health expenditure per capita, PPP (2011$)

Health expenditure, total (% of GDP)

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sharing among hospitals) with specialist consultations within the ear-nose-throat field (video conferencing) and specialist consultations in dermatology (e.g. video conferencing and still picture technology); and cardiography (e.g. heart rhythm/sound comparisons). Also, clinical information systems, home care and personalized health systems/ services for remote patient monitoring, systems for integrating local/regional/national health information networks represent significant potential for U.S. companies. U.S. companies are estimated to supply around 30% of Norwegian purchases of medical equipment. High end, quality products and a tailored marketing approach are key factors for U.S. companies in penetrating the Norwegian market. The perceived reliability and quality of a product, together with information received from health care providers and from relevant certifying bodies and professional associations in Norway, constitute the most significant factors in a purchasing decision for Norwegian buyers and end-users of medical equipment. Due to very limited domestic production Norway relies heavily on imports of medical equipment, and increases in market demand are likely to be met by imports. Norway spends an estimated US$ 7 billion annually on its hospitals, and there is an attractive market for innovative, high quality medical and dental equipment. A further US$ 300 million has been earmarked for the Norwegian Ministry of Health and Care Services as part of increased government spending in the wake of the current economic downturn. These investments are earmarked for upgrading hospital and building new facilities for senior citizens. There have also been reports that equipment in Norwegian hospitals is outdated, and the cost of replacing this equipment is estimated at US$ 600 million. Large public tenders are to be found at the Norwegian site www.doffin.no and the TED (Tenders Electronic Daily) database where tenders that are covered by EU public procurement law have to be published. A tender’s database has been developed by the US mission to the EU, featuring all European public procurement tenders that are open to U.S.– based companies. Current Market Trends114 There is a major health reform underway, the Integrated Health Care Reform, that is attempting to address some of the challenges the Norwegian healthcare services face. Issues include the inadequate coordination of services covering patient needs, too few initiatives aimed at limiting and preventing disease, changing demographics with an increase in chronic and complex illnesses. The aging population and increase in chronic diseases represents an extra burden for the healthcare system and the government has signaled that nursing and care for the aged must be given higher priority, as well as an increasing use of outpatient-based care at hospitals in an effort to rationalize. In addition technological advances and organizational improvements are prioritized to get healthcare costs under control and meet future challenges, so there is a high focus on healthIT solutions such as EPJ, tele and cloud based medicine and systems for integrating local/regional/national health information networks. Resources: Ministry of Health and Cares Services I Directorate of Health | Public Health Portal |

Institute of Public Health | Center for Integrated Care and Telemedicine | Medicines Agency | Association of Medical Suppliers

114 Ibid.

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Life Sciences Trade Overview Norway relies heavily on imported medical equipment.115 Imports supply over 75% of the market.116 The major third-country suppliers of medical equipment are Germany, Denmark, Switzerland, Sweden, the United Kingdom, and Japan. The Nordic countries have traditionally had close contact and cooperation in several healthcare related areas over the last decades. Norwegian companies have also had a preference for participating in and seeking trading partners through European, and in particular German, trade events. U.S. companies are estimated to supply around 30% of Norwegian purchases of medical equipment. 117 Norway participates in the EU internal market through the EEA Agreement (European Economic Area), and has the same rights and obligations as EU member states in regulation of medical devices. Norway applies EU product requirements, methods of conformity assessment, and duty rates for U.S. imports.118

U.S. Life Sciences Exports to Norway (US$)119

Product 2014 %2013- 14 All Life Sciences 221,631,416 2.92 1 Medical, Surgical, Dental & Veterinary Instruments 62,624,092 4.41 2 Instruments for Measuring Or Checking Flow, Level Etc 30,898,571 8.94 3 Miscellaneous Machines & Parts 27,748,741 57.80 4 Instruments for Physical & Chemical Analysis 25,689,644 -13.56 5 Oscilloscopes, Spectrum Analyzers Etc, Parts Etc 21,099,302 -31.74 6 X-Ray Etc Apparatus; Tubes, Panels, Screen Etc & Parts 10,870,218 53.05 7 Medicaments Nesoi, Mixed or Not, In Dosage Etc Form 10,113,125 29.01 8 Mech-Ther, Massage, Psych Test, Ozone App Etc, Pts 9,873,210 27.71 9 Automatic Regulating Or Control Instruments; Parts 5,935,193 -17.28 10 Composite Diagnostic/Lab Reagents, excluding Pharmaceuticals 3,848,220 -25.31

New England Life Sciences Exports to Norway (US$)120

Product 2014 %2013- 14 All Life Sciences 13,214,055 -17.64 1 Medical, Surgical, Dental & Veterinary Instruments 3,653,336 0.81 2 Instruments for Physical & Chemical Analysis 3,109,947 -8.12 3 Medicaments Nesoi, Mixed or Not, In Dosage Etc Form 1,916,129 117.40 4 X-Ray Etc Apparatus; Tubes, Panels, Screen Etc & Parts 1,473,388 30.18 5 Diagnostic/Lab Reagents, excluding pharmaceuticals 587,811 -0.45 6 Medicaments Nesoi Of Mixtures, Not in Dosage Form 545,056 28.34 7 Miscellaneous Machines & Parts 441,363 -41.85 8 Oscilloscopes, Spectrum Analyzers Etc, Parts Etc 379,213 -89.16 9 Industrial or Lab Furnaces Etc, Parts 281,476 118.03 10 Instruments for Measuring Or Checking Flow, Level Etc 249,034 -64.20

115 Ibid. 116 Espicom: Norway Medical Devices Report 117 US Commercial Service: Norway 2015 Country Commercial Guide 118 Ibid. 119 WISERTrade 120 Ibid.

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Norway Infrastructure Overview Already endowed with superb infrastructure, Norway is set to make large infrastructure investments over the next several decades. As one of the least densely populated countries in Europe, enhancing transportation connections between different regions and population centers in Norway entails large scale projects that will provide significant opportunities for Maine businesses to engage in the market. Norway is expected to face increasing demands on its infrastructure in coming decades, with the population set to rise in every county of the country, totaling 6 million inhabitants by 2029, and freight transport expected to grow by 35-40% by 2040.121 Driving growing opportunities in the infrastructure sector is the Norwegian government’s commitment to improving transportation links throughout the country, particularly as low oil prices stall other areas of economic growth. In spring 2013 the Norwegian Government presented the white paper National Transport Plan 2014–2023, the content of which has been generally accepted by the Storting (Norwegian parliament). Under the new scheme, the framework of the National Transport Plan will see a budget increase of NOK 150 billion (US$ 16.7 billion), or 50%, and the government will spend NOK 508 billion (US$ 56.7 billion) on transport over the next ten years. It also took steps to increase private investment in the sector. The government’s ambitious infrastructure expansion and improvement plan targets all forms of transportation: road, rail, sea, air, bicycle and pedestrian. Project expenditures are being made at both the national and municipal level.122 The Norwegian government’s investment in infrastructure is reflected in high returns in the construction industry, which grew at an average annual rate of over 7% in real terms between 2010 and 2014. Although 2015 to 2019 is projected to see a deceleration to 3.9% average annual growth, the construction market will remain healthy.123 A separate analysis projects a smaller but still positive average annual growth rate of 2.3% over a longer forecast period extending to 2024.124 Falling oil prices and slackening investment in the oil and gas industry are major factors behind the deceleration of the market, while large scale transportation projects are keeping its growth healthy. Threats of rising domestic production and labor prices open opportunities for cost competitive Maine producers.

121 Norwegian Ministry of Transport and Communications: National Transport Plan 2014-2023 122 Ibid. 123 ITS International: Infrastructure Projects to Drive Construction Industry in Norway 124 BMI Research: Norway Infrastructure Report

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Norway Construction Market Projected Annual Construction Growth

Source: Building Radar: Europe Construction Market Forecast from 2015 to 2020

Average Annual Allocation of Government Infrastructure Funds (Millions of NOK, 2013 Value)

Source: Ministry of Transport and Communications: National Transport Plan 2014-2023

0 0.5

1 1.5

2 2.5

3 3.5

4 4.5

2014 2015 2016 2017 2018 2019

% Change

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Road Expansions, upgrades, and repairs of Norway’s roadways feature strongly in the government’s infrastructure investment plans. The Norwegian Ministry of Transport and Communications has proposed total investment in the country’s road infrastructure that will amount to US$ 53 billion, which includes the development of the national road network and funding to municipal authorities. Accordingly, 1,280 kilometers of new trunk roads and 380 kilometers of four-lane motorway will be opened.125 A further 370km of national roads will be widened and have standards increased.126 Major planned improvements include:127

• Bringing universal design to 900 bus stops on the national road network and more than 100 public transport hubs

• 70 toll road projects • Major upgrades of main roads such as E6, E16, E18, and E134 • An average annual allocation of NOK 9.6 Billion (US$ 1 billion) for the 2014-2023 period to

strengthen investments in road projects and additional NOK 85 billion (US$ 9.5 billion) from road tolls for large projects.

• An average annual disbursement for the 2014-2023 period of NOK 10 billion (US$ 1.1 billion) for counties to improve road maintenance

• A total of NOK 16.2 billion (US$ 1.8 billion) for avalanche/landside prevention through 2023

Major Road Projects in Norway (Billions of Norwegian Krone) (1NOK = 0.11US$) Project Budget Phase Rogfast 13.8 Planning E39 Romsdalsfjorden 12.5 Planning Ørje – Vinterbro 11.25 Construction Ryfast 9.30 Construction Gardermoen-Kolomoen 8.35 Construction Sandvika-Skaret 7.20 Under Construction E18 Bjørvikaprosjektet 6.12 Completed Svegatjørn Rådal 6.20 Construction Kløfta-Kongsvinger 6.0 Planning E6 Helgeland 5.19 Construction E10 Hålogalandsvegen 5.0 Planning Rugtvedt - Dørdal 5.0 Design Damåsen - Saggrenda 4.20 Construction E6 Ranheim - Værnes 4.00 Planning Rv 4 Hadeland 3.80 Construction

Source: Norwegian Public Roads Administration 125 ITS International: Infrastructure Projects to Drive Construction Industry in Norway 126 Norwegian Ministry of Transport and Communications: National Transport Plan 2014-2023 127 Ibid.

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Rail While engaged in significant investments in road infrastructure, the Norwegian government is committed to increasingly transitioning to alternative transportation systems, notably rail. Railways consequently feature strongly in Norway’s infrastructure investment plans. Railway spending, which unlike other systems is primarily the preserve of the national government, is planned to total an average annual expenditure of NOK 16.8 billion (US$ 1.85 billion) through the 2014 to 2033 National Transport Plan period. This expenditure is about half of the allocation for road development. This railway investment represents an almost doubling of investment in large projects and will enable expansion and modernization of the railway in the central Eastern areas of Norway.128 The Government gives high priority to the development of InterCity (IC) routes. By the end of 2024 there will be contiguous double track lines to Tønsberg, Fredrikstad and Hamar, which will make it possible to establish train services with half-hour frequency throughout the operating day. By the end of 2026, the double track will be extended to Sarpsborg. The Government’s basic assumption is that future planning will be aimed at completion of the entire IC-system in 2030. Construction of the Oslo-Ski Follo line will commence at the beginning of the period.129 Major projects include:

• Increasing accessibility and employing universal design at 40-80 existing railway stations • Increasing total freight capacity of the Alnabru terminal in Oslo by 20 to 50%. • Creating new border crossing rail connections with Sweden, Finland and Russia to ice-free

Norwegian ports. • Modernisation of the Vestfold Line • The Follo Line Project • European Rail Traffic Management System (ERTMS) Implementation • New double track Skøyen-Asker

Port, Pedestrian, Bicycle, and Air Although the majority of funds are allocated for major road and railway investments, the Norwegian government is also putting aside considerable sums of money for investment in ports, airports, and pedestrian and bicycle pathways. The government aims to increase bicycle usage and is setting aside NOK 8.2 billion (US$ 0.9 billion) for measures for cyclists and pedestrians in a country where walking accounts for 22% of travel. Upgrades and expansions for ports, harbors, and navigation systems are set to receive an average annual allocation of NOK 1.94 billion (US$ 213 million) through 2033. Avinor, the state owned operator of most civilian airports in Norway is planning to invest NOK 37 billion (US$ 4.2 billion) in its airports through 2023.130

128 Ibid. 129 Ibid. 130 Ibid.

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Infrastructure: Oil & Gas131 The petroleum sector is a key driver of the Norwegian economy and the country’s single largest industry. The sector accounts for 19% of GDP, 29% of total investments, 27% of state revenues, and 46% of total exports. About 75,000 people are directly employed in the sector (oil companies, supply and service industry). Indirectly, it is estimated that the petroleum sector contributes around 250,000 jobs throughout Norway. Norway's oil production peaked in 2001 at 3.4 million barrels per day and has declined to around 1.9 million bpd in May 2015. Norwegian oil production is predicted to recover some from its current decline, but is expected to level off again by 2020. Despite the cyclical nature of this sector, the recent downturn in oil and gas prices and high cost constraints that have emerged over the recent years, the mood in Norway’s petroleum industry remains cautiously optimistic. Although many companies have had to reduce their workforce to cut costs and due to fall in orders, most market analysts expect the market to pick up again. The Norwegian oil and gas industry sector is global in nature. Norway has had several significant oil and gas discoveries in the past few years, including the giant Johan Sverdrup field, which will require major investments and create new jobs in the industry. Resource accounts with estimates of both produced and remaining resources show that there are nearly eight billion standard cubic meters (scm) of oil equivalents (oe) left to be produced on the NCS. During its more than forty-four years of production, Norway has depleted about 6.4 billion scm oe – or 45% of its total resources. Oil and gas production in Norway is only offshore. While there are significant onshore processing facilities, there is no onshore production. The average estimated recovery factor for oil on the NCS is now close to 50% after steady increments during the last decade. Many of the fields that are producing today are of such a magnitude that even a small increase in the recovery factor will yield substantial extra oil volumes. Sub-Sector Best Prospects Due to rising costs, the industry’s development and implementation of new and cost saving technologies--e.g. within seismic surveys, interpretation of seismic data, drilling, and subsea production--- will be of crucial importance. Also of great significance is the information sharing and innovation linking the petroleum sector with sectors such as information and communication technology, maritime industries, finance, and other Norwegian energy industries. Norway continuously seeks new and proven technology to be used in the deeper and more extreme northern waters. Promising sub-sectors for U.S. suppliers continue to be increasingly advanced drilling and well completion technologies. Key areas continue to be zero-surface, subsea and deep water technology; advanced technology facilitating remote/onshore, real-time operations, and solutions advancing the e-field, reducing the need for transportation and the number of personnel having to stay on offshore

131 U.S. Commercial Service: Norway 2015 Country Commercial Guide

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platforms; unmanned systems and ROVs; innovative solutions for improved recovery and marginal field technology; LNG technology/gas value chain, including technology facilitating more efficient and clean production and transportation of gas from remote locations; As oil and gas fields are depleted and production ceases, investments are also needed on abandonment or alternative use of installations. There is growing overlap with other industry and technology sectors, e.g. how to operate in extreme conditions using increasingly advanced technology, sensors and intelligent tools. An example of this is learning and sharing best practices with leaders in space technology, medical technology, etc. The Norwegian government emphasizes that the oil industry needs to strive to make their exploration activities as efficient and cost-effective as possible while at the same time showing due consideration for the environment and the fisheries, especially since exploration and drilling activities are moving further north and into more coastal areas. Total investments in NCS oil and gas activity for 2014, including pipeline transportation, are estimated at a record US$ $46 billion. Projections for 2015 indicate total investments of around US$ $25 billion.

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Norway Green Shipping Maritime Industry Overview Norway has been a major player in shipping and shipbuilding for the past 150 years, and is still considered a superpower on the seas, controlling the world's fifth largest merchant fleet, measured by value. Almost 1,800 Norwegian controlled foreign going ships were registered in first quarter of 2015, a slight increase from previous quarters. Norway has a long tradition of utilizing the rich maritime environment, including major activities in commercial shipping and fishing. The market for leisure boats is also big in Norway, with about 800,000 leisure boats registered. The Norwegian coastline measures over 20,000 kilometers. With Fjords and Islands included, the Norwegian coastline is 126% that of the United States.132 Many have characterized the Norwegian maritime community as being the most internationally competitive and knowledge-based industry in Norway. The maritime community is one of the most comprehensive of its kind in the world, encompassing ship-owners, brokers, insurance and financial services, classification institutions, shipyards, ship's gear manufacturers, institutions of maritime education, maritime research and development, maritime authorities and employees' organizations.133 Revenues from the Norwegian maritime industry add up to between US $20 billion134 to $27 billion, and have more than doubled over the last decade.135 Norwegian ship owners are especially active within shipping areas like offshore service/specialty vessels, oil tankers, bulk carriers, chemical tankers, gas (LNG/LPG) tankers, car carriers, and cruise operations. The Norwegian fleet of mobile offshore reached fifty units as of first quarter 2015, qualifying as the second largest in the world, after the United States. Forty percent of the rigs are operating on the Norwegian Continental Shelf. Shipbuilding has very long traditions in Norway, and is still a very important part of Norwegian maritime activities. It is estimated that the maritime cluster today provides between 100,000136 and 112,000 jobs in Norway 137. Some 61,000 Norwegians and foreigners work on Norwegian ships and rigs.138 By international comparisons, most of the Norwegian shipyards are relatively small and they have recently experienced heavy competition. Today, most large ships, floating production storage and off-loading units (FPSOs), and offshore rigs are built in East Asia and Southeast Asia. Lack of sufficient Norwegian competitiveness in these labor and raw materials intensive segments is primarily based on high costs for hull constructions, plus the fact that shipyards in Norway can only handle new vessels up to 45,000 dwt. Cargo transport within Norway has seen a significant increase during the last few years. Sea transport 132 U.S. Commercial Service: Norway 2015 Country Commercial Guide 133 Ibid. 134 Royal Norwegian Embassy in Athens: Norway Strengthening its Maritime Competitiveness 135 U.S. Commercial Service: Norway 2015 Country Commercial Guide 136 Ibid. 137 Royal Norwegian Embassy in Athens: Norway Strengthening its Maritime Competitiveness 138 U.S. Commercial Service: Norway 2015 Country Commercial Guide

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accounts for 44% of cargo transport within Norway. Ships completely dominate international cargo transport, with 88% of the freight volume to and from mainland Norway.139 Best Prospects140 U.S. maritime technology and service suppliers have found the Norwegian market well worth exploring for exports and joint venture opportunities. Over the past four decades, Norway has also become a significant oil and gas producing nation. One of the main reasons for this success was that Norwegian shipping and related maritime businesses provided the administrative network, the technical know-how, and the infrastructure needed to build up a sophisticated offshore oil-related industry. The country has to stay ahead of increased international competition by maintaining and modernizing its important merchant fleet. Norway needs to keep its fleet and shipbuilding industry as modern, efficient, environmentally friendly, and well-equipped as possible. Ship-owners and shipyards are constantly seeking advanced, labor-saving equipment and systems, not only for the growing Norwegian merchant fleet, but also for the ever-expanding offshore oil and gas sector. The recent decline in oil and gas prices has incentivised operators and the supply industry to deliver good Return on Investment. All shipyards and ship equipment manufacturers and suppliers are seeking new ways to reduce costs and increase productivity and will evaluate any system or equipment that will contribute to a better competitive position. Analysing the total life cycle costs of equipment is crucial in making purchasing decisions. Modern Norwegian shipbuilding entails construction of sophisticated vessels with highly integrated electronic control systems - from cargo handling to technical reporting and scrubbing sulphur and cleaning ballast water - that demand advanced information technology. At the same time, customers are demanding multi-system packages from single source suppliers.

Norwegian Shipping Industry

Source: Norwegian Ministry of Trade, Industry and Fisheries: Maritime Opportunities – Blue Growth for a Green Future

139 Ibid. 140 Ibid.

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Opportunities141 More than half of all Norwegian yards orders are commissioned by the offshore oil and gas sector. Furthermore, much of the production in the Norwegian manufacturing industry has been geared towards offshore-related industrial activity. In first quarter 2015, the numbers of Norwegian mobile offshore installations were fifty units; mostly semi-submersibles and floating production units, but also some drill ship and jack-ups. Investments projects and industrial activity in the offshore sector have effects on Norwegian industrial activity in general, and in the maritime industry in particular. U.S. Exporters may also want to consider participating at Nor-Shipping in Oslo in 2017 (and 2019), one of the largest shipping exhibitions and conferences in Europe. Green Shipping Sector Norway is making substantial commitments towards transitioning to a more environmentally friendly and low-carbon economy. Norway intends to cut the global emissions equivalent to one 100% of its own emissions by 2030, aspiring to become a carbon neutral nation. By 2020, Norway plans to reduce global greenhouse gas emissions by the equivalent of 30% of its own 1990 emissions. Norway will strength its Kyoto Protocol commitments by 10%, corresponding to 9% below the country’s 1990-level. The shipping and maritime industries will play a crucial part in this effort.142 As part of its efforts, the Norwegian government announced its Blue Growth for a Green Future strategy for the maritime industries. Key aspects of the plan include stimulating green growth for the maritime industry as well as the use of environmentally friendly technology and alternative fuel for vessels. According to Statistics Norway's emission statistics, which is mainly based on the sale of fuel to the shipping industry, shipping and fisheries represent about 6% of Norway's total emissions of greenhouse gases, and more than 20% of the NOx emissions. New technology has made it possible to identify emissions from vessels on the basis of observed activity. Calculations made using this method indicate that emissions from domestic shipping are higher than the estimate in Statistics Norway's emissions statistics. Several types of environmentally friendly fuels are available for maritime use as alternatives to the diesel oils which are mainly used today. Gas (LNG), bio fuel and electricity, including onshore power and hybridisa-tion, are considered to have the greatest potential. LNG gives no sulphur or particle emissions and involves a considerable reduction of NOx, while electricity reduces both climate and environmental emissions considerably.143 Research, Development, and Innovation The Norwegian government plans to contribute to commercialized research projects in environmental technology by giving investment grants to pilot projects across all industries. Since its environmental technology plan was established in 2010, risk protection in the form of grants has been allocated at a total of NOK 1.04 billion (US$ 120 million) to 237 projects. Projects in the maritime sector have been

141 Ibid. 142 Ibid. 143 Norwegian Ministry of Trade, Industry and Fisheries: Maritime Opportunities – Blue Growth for a Green Future

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granted NOK 78.3 million (US$ 8.7 million) in support during the first five years of the environmental technology scheme. About 70% of the allocations have been to climate relevant projects.144 Ferry Tenders and Zero Emission Technology There are currently 102 county road ferry services and 17 state road ferry services. The ferry services have been and are important players for implementing new, environmentally friendly technology. The technological development leading to low and zero emission solutions being applied in ferry operations could contribute to lower costs for using such solutions in shipping. The Government plans to ensure that all future tenders on state road ferry services have requirements for zero emission technology, when technologically feasible.145 Green Coastal Shipping Program One major initiative is the Green Coastal Shipping Program. A joint program with the Norwegian government and Oslo-based DNV GL, the initiative aims to create the most environmentally-friendly vessels in the world. It is composed of five pilot projects which chiefly use LNG and batteries as energy sources. According to DNV GL’s Narve Mjøs, the director of the Green Coastal Shipping Program, “we envision a fleet of offshore vessels, tankers, cargo, container, bulk and passenger ships, ferries, fishing and aquaculture vessels, tugs and other coastal vessels, run entirely or partly using batteries, LNG or other green fuels.” The first project is a cargoferry plug-in hybrid which targets the development of cost-effective and profitable short-sea box ships that are powered by a hybrid LNG and battery propulsion system. The second project is a green shuttle tanker project which utilizes batteries. The third project is a hybrid farming vessel project aimed at optimizing a hybrid propulsion system for more efficient energy operations. The fourth project converts a cargo ship into a hybrid battery and LNG carrier. Converting existing vessels into LNG carriers has been seen as cost-effective to many small operators. The final project involves developing a low-energy consumption green port with a minimal carbon footprint. Some of the technologies being employed include electric heavy-duty vehicles and cranes. The green port will also be equipped with smart gates, offer cold ironing services and charging stations for plug-in hybrid ships.146 Resources: Ministry of Trade and Industry | Ship Owners’ Association |

Ministry of Petroleum and Energy | Maritime Directorate | Nor-Shipping 2017 | Energy Initiatives | Ministry of Trade, Industry and Fisheries | Ministry of Petroleum and Energy | Ministry of Environment | Norwegian Pollution Control Authority | Gassnova | Enova |Statoil | Statkraft | Bio Energy Association

144 Ibid. 145 Ibid. 146 The Maritime Executive: Norway Launches Green Shipping Project

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Green Shipping Trade Overview147 United States Exports to Norway of Advanced Materials and Composites (US$)

Product 2014 Oct2015YTD %2013- 14 %2014- 15 Total Composites 39,617,861 51,258,130 -16.00 46.66 1 Plastics And Articles Thereof 34,412,206 48,219,576 -19.61 59.61 2 Wadding, Felt Etc; Sp Yarn; Twine, Ropes Etc. 4,033,799 1,798,130 17.94 -52.44 3 Impregnated Etc Text Fabrics; Tex Art For Industry 822,378 777,710 10.02 13.27 4 Manmade Filaments, Including Yarns & Woven Fabrics 220,763 156,142 252.31 8.38 5 Manmade Staple Fibers, Incl Yarns & Woven Fabrics 70,499 36,326 23.04 -48.47 6 Spec Wov Fabrics; Tufted Fab; Lace; Tapestries Etc 58,216 270,246 -16.37 364.21

New England Exports to Norway of Advanced Materials and Composites (US$)

Product 2014 %2013- 14 Total Composites 1,777,645 17.02 1 Plastics And Articles Thereof 1,013,702 -1.00 2 Impregnated Etc Text Fabrics; Tex Art For Industry 535,463 27.27 3 Wadding, Felt Etc; Sp Yarn; Twine, Ropes Etc. 190,491 315.93 4 Manmade Filaments, Including Yarns & Woven Fabrics 37,989 79.48

U.S. Exports to Norway of Ships, Boats, and Floating Structures (US$)

Description 2014 %2013- 2014 Total 25,129,585 19.16 1 Vessels Nesoi Incl Warshp/Lifebt Ex Row Boats 17,833,376 10.42 2 Yachts & Other Vessels For Pleas Etc; Row Boat Etc 4,253,654 43.99 3 Floating Structures Nesoi, Rafts, Tanks, Buoys Etc 1,599,848 11.07 4 Light-Vessels, Fire-Floats Etc; Fl Docks & Platfms 1,442,707 164.90

New England Exports to Norway of Ships, Boats, and Floating Structures (US$)

Description 2014 %2013- 14 Total 2,292,990 637.17 1 Vessels Nesoi Incl Warshp/Lifebt Ex Row Boats 1,676,048 2,156.91 2 Yachts & Other Vessels For Pleas Etc; Row Boat Etc 581,586 531.62 3 Floating Structures Nesoi, Rafts, Tanks, Buoys Etc 35,356 -75.57 4 Vessels For The Transport Of Persons Or Goods 0 NaN 5 Light-Vessels, Fire-Floats Etc; Fl Docks & Platfms 0 NaN

147 WISERTrade: US State Database

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Norway Other Opportunities The Norwegian market offers a number of promising opportunities for Maine businesses beyond the Life Sciences, Infrastructure, and Green Shipping industries highlighted in this report. Other high potential sectors, as identified by the U.S. Commercial Service, include:

• Agriculture • Defense and Aerospace Technologies • Information and Communication Technologies • Travel and Tourism Services

United Kingdom Trade and Investment further emphasizes market opportunities in:

• Energy & Renewables • High quality consumer goods including:

o clothing, o accessories o footwear o giftware o interiors

• Food & Beverage, particularly of high quality

For information and market research on any of these sectors please contact MITC Trade Information Specialist Tom Conley at Conley@mitc.com or (207) 553-7708.

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SWEDEN Country Profile and Economic Overview Aided by peace and neutrality for the whole of the 20th century, Sweden has achieved an enviable standard of living under a mixed system of high-tech capitalism and extensive welfare benefits.148 Sweden is the largest Nordic economy and represents a transparent, highly developed, sophisticated, and diversified market with few barriers to entry.149 With export-oriented manufacturing, a diversified economy, competitive small and medium sized enterprises, and budgetary discipline, Sweden ranks #5 on the IMD’s 2014 competitiveness ratings, and #3 on WIPO’s 2014 Global Innovation Index. Like other Nordic countries, the government is heavily involved in Sweden’s economy. Public procurement equals 20% of GDP, compared to an EU average of 11%, and government revenues account for 51% of GDP. However, the private sector is vibrant and privately owned firms account for the vast majority of industrial output.150 Income and Consumers Sweden is among the wealthiest countries in the world with GDP per capita exceeding US$ 46,000. Incomes are evenly distributed, making nearly every person a high value consumer. An unemployment rate of 7.2% is relatively high compared to other Nordic economies, but is considerably lower than the European average.151 The unemployment rate has declined modestly over the last several years and is projected to continue to fall to 6.2% by 2018.152 Economic Performance Economic growth slowed in 2013, as a result of continued economic weakness in the EU - Sweden’s main export market; however, Sweden’s economy experienced modest growth in 2014, with an adjusted real GDP growth of 2.1%. The GDP in Sweden was worth US$ 570.59 billion in 2014. Sweden has been one of the best fiscal performers since the start of the global crisis in 2008. Whereas in 2007, government debt as a percentage of GDP was 45.3%, it had increased by only 5.9 148 CIA World Factbook: Sweden 149 U.S. Commercial Service. 2015 Sweden Country Commercial Guide 150 Ibid. 151 Eurostat: Euro Area Unemployment Rate 152 Ministry of Finance: Forecast budget Bill 2016

Sweden Country Profile • Population: 9,801,616 • Median Age: 41.2 years • Largest City: Stockholm • Area: 410,335 sq. km • GDP: $450.5 billion • GDP Real Growth Rate: 2.3% • GDP per capita (PPP) $46,200 • Inflation rate: 0.2% • Unemployment rate: 7.2%* • Currency: Swedish Krona

Source: CIA World Factbook, 2014 est. * EuroStat, Sep. 2015

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percentage points in 2014, reaching 51.2%. This was the smallest increase for OECD countries with available information where debt increased.153 Key Sectors Sweden has a long-established tradition of expertise in engineering, shipbuilding, mining and life sciences, making it a highly receptive market to new and advanced technologies. Timber, hydropower, and iron ore constitute the resource base of an economy heavily oriented toward foreign trade. Agriculture accounts for less than 1% of GDP. There is ongoing, strong demand for advanced technologies and products/services that improve productivity, including IT software and services that lower costs and improve business efficiencies, as well as equipment and services for safety/security, including cyber security. According to the World Economic Forum’s Global Information Technology Report 2014, Sweden ranks 3rd in the world in the Networked Readiness Index. Driven by rapid, widespread adoption of smart devices, Sweden’s internet economy is growing more than 10% annually and represents about 8% of total GDP. Since Swedes are early adopters of new technologies, Sweden is considered to be an ideal test market, albeit an expensive one. Sweden’s rapid developments in smart grid, bioenergy, cyber security and e-health make the country a critically important market for U.S. companies offering advanced technologies. Sweden’s commitment to sustainability across industry sectors drives market demand for products and services in renewable energy/low carbon/green technologies and energy efficiency.154 Relationship with European Union Sweden joined the European Union in 1995, integrating its economy and harmonizing much of its regulatory practices with the European market. However, Sweden remains outside the Eurozone, retaining its own currency, because of concerns over its impact on the country’s economy, welfare system, and sovereignty. Growth Prospects Sweden’s economy is expected to grow modestly in 2015 and average annual growth of 2.5% is projected through 2019.155 Though facing deflationary pressures, low interest rates and rising wages should lift consumption, inflation and growth. Employment continues to grow and unemployment is declining. Business investment will increase further in response to rising demand, and surging house prices will continue to support residential investment, but may also pose risks.156

153 U.S. Commercial Service. 2015 Sweden Country Commercial Guide 154 Ibid. 155 Ministry of Finance: Forecast budget Bill 2016 156 OECD: Sweden Economic Forecast Summary

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Sweden Economic Projections

Source: Worldbank Databank

Sweden Trade Overview As a small, open economy and export-dependent country, foreign trade constitutes an important part of Sweden’s economic activity. The U.S. and Sweden share strong ties in trade and investment. Annual U.S.-Swedish trade in goods and services is valued at an estimated US$ 25 billion, and cumulative bilateral investment is valued over US$ 62 billion. Over 1,300 U.S. companies are present in Sweden, and Sweden is the top location in the Nordics for regional headquarters covering the Nordics and the Baltics. More American companies operate in Sweden than companies from any other foreign country, sustaining over 72,000 Swedish jobs. Major categories of U.S. exports to Sweden include aerospace/defense, automotive aftermarket, healthcare/life sciences, information technologies, safety/security, clean-tech, and renewable energy.157

Sweden Imports & Exports (Billions of US$)158 Imports by Country Exports by Country

From 2014 %2013- 14 All Countries 162.2 0.97 1 Germany 28.2 0.59 2 Norway 12.7 -5.53 3 Netherlands 12.4 3.51 4 Denmark 11.9 -8.14 5 United Kingdom 10.0 4.35 6 China 8.7 5.79 7 Russia 8.3 12.47 8 Finland 8.1 -7.52 9 France 7.2 12.39 13 United States 4.1 -5.73

To 2014 %2013- 14 All Buyers 164.4 -1.84 1 Norway 17.0 -3.59 2 Germany 16.0 -0.54 3 United Kingdom 11.5 7.71 4 Finland 11.4 -2.46 5 Denmark 11.0 -0.76 6 Usa 10.3 5.72 7 Netherlands 8.2 -6.93 8 France 7.1 -4.12 9 Belgium 7.1 -10.07 10 China 5.7 -3.88

157 U.S. Commercial Service. 2015 Sweden Country Commercial Guide 158 WISERTrade: EU Harmonized Query

0 1 2 3 4 5 6 7 8 9

2014 2015 2016 2017 2018 2019

GDP Growth Rate % Unemployment %

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Imports by Product Exports by Product

Product 2014 %2013- 14 All Products 162.2 0.97 1 Oil & Fuels 22.0 -4.05 2 Industrial Machinery 22.0 1.86 3 Electric Machinery 19.3 0.80 4 Vehicles, Except Rail 16.8 6.09 5 Plastics & Articles Thereof 6.3 6.57 6 Iron & Steel 4.4 -2.82 7 Seafood 4.4 6.11 8 Pharmaceuticals 4.4 -4.39 9 Medical Equipment 4.2 -8.78 10 Articles of Iron & Steel 3.5 3.14

Product 2014 %2013- 14 All Products 164.4 -1.84 1 Industrial Machinery 25.5 -2.87 2 Electric Machinery 17.6 -0.32 3 Vehicles, Except Rail 16.1 -4.48 4 Oil & Fuels 13.3 1.24 5 Paper & Paper Products 10.2 -4.62 6 Pharmaceuticals 7.6 2.75 7 Special Classifications 6.9 -15.69 8 Iron and Steel 6.8 3.97 9 Plastics and Articles Thereof 5.9 -2.18 10 Wood & Wood Products 4.7 5.25

U.S. Exports to Sweden (Millions of US$)159

Total U.S. Exports New England Exports Products 2014 %2013- 14 Total Exports 4,421 -4.23 1 Aerospace 1,013 -33.63 2 Industrial Machinery 775 13.65 3 Vehicles, Except Rail 541 75.91 4 Medical Devices 427 9.52 5 Electric Machinery 322 -2.83 6 Oil & Fuels 290 -22.92 7 Special Classification 243 10.73 8 Chem; Prec. Met. Radioact 128 54.72 9 Articles of Iron rr Steel 72 5.29 10 Organic Chemicals 61 13.35

Product 2014 %2013- 14 Total Exports 484.6 90.78 1 Pharmaceuticals 209.2 11,185.98 2 Aerospace 61.7 -8.43 3 Industrial Machinery 60.0 32.14 4 Medical Devices 44.3 37.31 5 Electric Machinery 43.8 4.37 6 Peptones & Proteins 10.9 -8.96 7 Plastics & Articles Thereof 9.7 19.39 8 Vehicles, except Railway 4.8 10.41 9 Seafood 4.7 -21.39 10 Miscellaneous Edibles 3.2 2.50

159 WISERTrade: State Database

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Sweden Life Sciences Overview Sweden’s healthcare system is one of the best and most well developed in the world. The population of 9.7 million enjoys very good health. The Swedish health care market is advanced and there is an eagerness to be at the forefront of technological developments. The market looks to the US for developments in research and application of the newest medical technology.160 Sweden invests about 11% of its GDP in health and medical services, which is on par with most other European countries.161 Total healthcare expenditures reached US$ 52.8 billion in 2014 or about US$ 5,483 per capita. Healthcare expenditure increased by a compound annual growth rate of 5.5% between 2009 and 2014.162 The infant mortality rate is less than 2.7 deaths per 1,000 in the first year of life and the average life expectancy is 80 years for men and 84 years for women. As Sweden has a population that is one of the oldest in the world--19.4% are 65 years or older-- there will be an increasing demand for medical equipment and supplies, and longer medical treatments, to meet the health needs of an ageing population.163 This demographic trend will enable growing opportunities for Maine life sciences exporters. Market Structure Public spending dominates Sweden’s healthcare market, accounting for 81.4% of total health spending in 2014.164 The responsibility for health and medical care in Sweden is shared by the central government, the county councils and the municipalities. Sweden is divided into 290 municipalities and 21 county councils. The county councils have the responsibility to provide health and medical services and to work for a good standard of health among the population. They also decide on the allocation of the resources to the health services and are responsible for the overall planning of the services offered. It is also the county councils that own and run the hospitals, health centers and other institutions. County councils are also responsible for dental care for local residents up to the age of 20.165 The 290 municipalities are responsible for the nursing homes, care of the elderly in their homes and the disabled. They are also responsible for providing care for people with psychological disorders and providing support and services for people released from hospital care as well as for school healthcare. Private healthcare, accounting for at least 12% of total healthcare costs, mainly offers primary care like running healthcare centers or homes for the elderly.166 There are a few hospitals that are managed by private entrepreneurs. Most private expenditure is out of pocket.167 160 U.S. Commercial Service: 2015 Healthcare Technologies Resource Guide 161 Ibid. 162 BMI Research: Norway Medical Devices Report 163 U.S. Commercial Service. 2015 Sweden Country Commercial Guide 164 BMI Research: Norway Medical Devices Report 165 U.S. Commercial Service: 2015 Healthcare Technologies Resource Guide 166 U.S. Commercial Service. 2015 Sweden Country Commercial Guide 167 BMI Research: Norway Medical Devices Report

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There are some 90 hospitals in Sweden of which 60 provide specialist care. Seven of these hospitals are regional institutions offering highly specialized care and where teaching and research is based. There are about 35,000 physicians and 110,000 nurses in Sweden. Outpatient care is organized into primary care districts, each with 5,000 to 50,000 inhabitants.168 The number of hospital beds amounted to 2.5 per thousand people in 2014, while the number of physicians totaled 4.2 per thousand.169

Sweden Health Care Expenditure

Source: World Bank Databank

Medical Equipment Overview The Swedish market for medical equipment reached about US$ 2.8 billion in 2014. Sweden has a strong medical device manufacturing industry, including a number of major international companies such as Gambro, Elekta, Getinge and Arjo. The industry has particular strengths in patient aids and dialysis apparatus, wheelchairs, hospital furniture, sterilizers, blood pressure monitors, and Swedish innovations such as the pacemaker, hemodialysis and the gamma knife have gained international recognition.170 Opportunities As most of the domestic manufacture is for export (estimated value at US$ 2.9 billion), the medical equipment market is dependent on imports. In 2014, imports were estimated at US$ 2.5 billion. Business Monitor ranks Sweden as the eighth most attractive market in Western Europe in which to commercialize a medical device.171 Projections

168 U.S. Commercial Service. 2015 Sweden Country Commercial Guide 169 Ibid. 170BMI Research: Sweden Medical Devices Report 171 Ibid

8.4 8.6 8.8 9 9.2 9.4 9.6 9.8 10 10.2

0 500

1000 1500 2000 2500 3000 3500 4000 4500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Health expenditure per capita, PPP ( 2011 US$) Health expenditure, total (% of GDP)

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The medical device market is expected to experience moderate growth in local currency terms over the 2014-2019 period, averaging about 4% per year.172 Growth in US dollar terms will be constrained by a depreciation of the Swedish krona against the US dollar, which will result in a downturn in 2015 before the market returns to growth from 2016. Average annual growth in dollar terms will be 2.7% through 2019. 173 Drugs & Pharmaceuticals The Drugs & Pharmaceuticals sector in Sweden is a moderately attractive regional market for US exporters. The sector is valued at SEK 37.7 billion (US$ 5.5 billion) in 2014 and SEK 37.8 billion (US$ 4.4 billion) in 2014. The large drop in dollar value reflects the shifting exchange rates, rather than a dramatic contraction in the local market. Despite some challenges, there are ample opportunities for Maine businesses. The proportion of the country's pensionable population is on the rise and coupled with high per capita spending, multinational pharmaceutical companies will continue to be provided with steady revenue-earning opportunities. Such demographic trends will remain the primary driver of growth behind the prescription drug markets although the government is likely to put further emphasis on promoting cost-reduction initiatives that would be supportive of the generic medicines market, which would see the market share of patented medicines weaken.174 Sweden Pharmaceutical Sales175

Year Sales Value, (US$ Billions) Sales, % of GDP Sales, % of Health Expenditure 2013 5.57 0.96 10.3 2014 5.494 0.96 10.4 2015f 4.38 0.94 10.2 2016f 4.69 0.91 10.0 2017f 4.737 0.88 9.8 2018f 5.124 0.85 9.6 2019f 5.422 0.83 9.5

Opportunities and Best Prospects176 U.S. companies will find that Sweden’s market is quite receptive to high-quality equipment that offers both ease of use and cost efficiency. Future demand is expected in the following areas: E-health, Telemedicine, mHealth, Non-invasive surgical equipment, Orthopedic and prosthetic equipment and home health care and assistive technologies equipment and supplies. Swedish health care facilities are currently in the midst of a construction and renovation boom. All major County Councils are involved in construction and renovation projects, including the reconstruction of old hospitals or the building of new hospitals, such as the new Karolinska Hospital in Solna/Stockholm. Once these projects are completed, an increased demand for new equipment and supplies will follow. 172Ibid. 173 Ibid. 174Ibid. 175 Ibid. 176 U.S. Commercial Service. 2015 Sweden Country Commercial Guide

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E-health and healthcare IT are a key market in Sweden. Today, e-health is an integrated part of daily life in Swedish health care. It is estimated that 95% of all documentation in primary care is made in electronic health care records (EHRs), while the corresponding figure for specialized hospital care is estimated at 69%. E-prescriptions have become very popular, and it is estimated that some 95% of all pharmaceutical prescriptions in Sweden are issued electronically. The County Councils’ annual investments for healthcare IT are estimated at SEK 8.5 billion (US$ 1.2 billion), of which SEK 6 billion (US$ 0.9 billion) is used for the purchase of equipment and supplies. Many Swedish software companies have developed IT systems for the healthcare market and large Swedish players dominate the hospital and primary care market for software. U.S companies active in the market include Microsoft, Hewlett Packard, and IBM.

Sweden Life Sciences Sub-Sector Prospects for US exporters Sub-Sector Prospects for U.S. Exporters ( ranked 1 – 4 ) Medical Devices – General More opportunities than challenges – 3 Medical Devices – Monitoring Equipment More opportunities than challenges – 3 Medical Devices – Orthopedic More challenges than opportunities – 2 Medical Devices – Surgical More opportunities than challenges – 3 Medial Capital Equipment More challenges than opportunities – 2 Biomedical More opportunities than challenges – 3 Clinical Chemistry Diagnostics More opportunities than challenges – 3 Dental More opportunities than challenges – 3 Dietary Supplements More challenges than opportunities – 2 Drugs & Pharmaceuticals More opportunities than challenges – 3 Health IT Very high probability of success – 4 Laboratory Equipment More opportunities than challenges – 3 Used Equipment Little to no probability of success – 1 Aging and Nursing Care More challenges than opportunities – 2 Consulting Services More challenges than opportunities – 2 Veterinary Medicine More challenges than opportunities – 2

Source: U.S. Commercial Service: 2015 Healthcare Technologies Resource Guide Market Trends/ Projections177 Two main factors are expected to strongly affect Sweden’s future healthcare system: • An aging population, which is likely to lead to increased demand for health care products as well as health care related services such as equipment and supplies for the home health care sector. • Lifestyle related diseases (diabetes, obesity, etc.). Of the predominant diseases the main causes of death are cancer and cardiovascular conditions including strokes. Chronic diseases that require monitoring and treatment, and often life-long medication, place significant demands on the system. 177 Ibid.

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Resources: Swedish Medtech | The Swedish Institute of Assistive Technology | The Swedish Council on Technology Assessment in Health Care | The Swedish National Institute of Public Health |National Board of Health and Welfare | Medical Products Agency

Trade Events: Apoteksmassan | SweDental | Health, Wellness & Fitness | Vitalis U.S. firms interested in the Swedish market will find that a visit to Digital Health Days (Stockholm, September 23-24, 2015) and/or Vitalis (Gothenburg, April 5-7, 2016) will present excellent opportunities to meet with Swedish firms and decision makers. Life Sciences Trade Overview Medical device imports supply around 74% of the medical device market, allowing for significant opportunities for Maine exporters. However, imports have been declining modestly, resulting from first the economic crisis and then the rising U.S. dollar value. Between 2009 and 2014, total Swedish imports registered a negative compound annual growth rate of -1.4% in US dollar terms. The running annual total was US$ 1.7 billion in the 12 months to June 2015, representing a year over year decline of 12.5%. All product areas contracted, led by a 28.7% decline in patient aids as the impact of the closure of St. Jude Medical's manufacturing facility was still being felt.178 U.S. Life Sciences Exports to Sweden (US$)179

Product 2014 %2013- 14 All Life Sciences 872,956,659 32.18 1 Medicaments Not elsewhere include, In Dosage Form 299,161,744 281.57 2 Medical, Surgical, Dental Or Vet Inst, No Elec, Pt 111,307,527 31.12 3 Vaccines, Diagnostics, & Antisera ect. Prepared from Blood 103,630,128 -17.82 4 Glands Etc Dry & Ext; Heparin; Hum Etc Substances Nesoi 93,567,708 -29.36 5 Inst Etc For Physical Etc Anal Etc; Microtome; Pts 86,141,473 -0.07 6 Composite Diagnostic/Lab Reagents, Excluding Pharmaceuticals 42,228,645 59.02 7 Automatic Regulating Or Control Instruments; Parts 24,110,312 18.95 8 Oscilloscopes, Spectrum Analyzers Etc, Parts Etc 21,502,172 -6.57 9 Mech-Ther, Massage, Psych Test, Ozone App Etc, Pts 16,479,240 33.04 10 Machines, Nesoi In Chapter 90; Profile Project, Pt 16,084,298 27.56

New England Life Sciences Exports to Sweden (US$)180

Product 2014 %2013- 14 All Life Sciences 240,279,361 718.19 1 Medicaments Not elsewhere include, In Dosage Form 208,195,287 22,013.50 2 Inst Etc For Physical Etc Anal Etc; Microtome; Pts 7,925,399 -42.55 3 Medical, Surgical, Dental Or Vet Inst, No Elec, Pt 7,447,254 3.85 4 Machines Etc For Testing Mech Prop Of Material, Pt 5,481,655 1,823.27 5 X-Ray Etc Apparatus; Tubes, Panels, Screen Etc, Pt 3,345,698 275.36 6 Oscilloscopes, Spectrum Analyzers Etc, Parts Etc 2,353,833 134.50 7 Machines, Nesoi In Chapter 90; Profile Project, Pt 1,208,066 9.25 8 Inst Etc Measure Or Check Flow, Level Etc, Pts Etc 936,044 -13.84 9 Composite Diagnostic/Lab Reagents, Excluding Pharmaceuticals 653,845 27.16 10 Automatic Regulating Or Control Instruments; Parts 647,077 3.63

178 BMI Research: Sweden Medical Devices Report 179 WISERTrade: State Database 180 Ibid.

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Sweden Infrastructure Sweden’s transportation infrastructure is strong and thoroughly modern. However, considerable areas for improvement remain. Accordingly, the Swedish government, in conjunction with municipalities, is making significant infrastructure investments over the next decade. The country ranks 20th on infrastructure in the World Economic Forum 2013-14 Survey, and sixth on overall competitiveness. In the past, the social return on investment projects seems to have been fairly low. The transport infrastructure is seen as a “modest advantage,” but not a key driver of Sweden’s competitiveness.181 About 98,500km of state-owned roads, 4,600km of municipality-owned roads, 9700km of railways, 50 public seaports, and over 200 airports span the country.182 In 2013 the Swedish government agreed upon a national infrastructure plan lasting from 2014 to 2025. The 2014-2025 national transport plan aims at upgrading the transport system to reduce congestion and disruptions. Enhancing social returns are a significant aspect of the plan. The plan proposes investing SEK 522 (about US$ 61 billion) in projects including road, rail, air, sea, and pedestrian modes of transport.183 More than 150 investment projects are identified, including road upgrades, new high-speed railways, an expansion of the Stockholm underground railway system and mining-related infrastructure.184 In addition to the national infrastructure plan, regional and local governments are planning an estimated further SEK 500 billion (about US$ 59 billion) in infrastructure projects, bringing the total for investments through 2025 to about US$ 121 billion.185 Under the plan, funding is increased by 20% relative to the previous plan period and amounts to about 14% of 2013 GDP. The plan will improve road and rail maintenance and further develop transport infrastructure.186

181 OECD Economic Surveys: Sweden 2015 182 Library of Congress: National Funding of Road Infrastructure: Sweden and World Bank DataBank 183 Business Sweden: Construction and Infrastructure In Sweden Note: Other estimates project infrastructure spending to reach between US$ 70 and 80 billion 184 OECD Economic Surveys: Sweden 2015 185 Business Sweden: Construction and Infrastructure In Sweden 186 OECD Economic Surveys: Sweden 2015

Business Sweden: Construction and Infrastructure in Sweden

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Strong growth in Sweden’s construction industry reflects the major opportunities in the infrastructure sector. The construction industry grew by 6.9% in 2015, following even more robust growth of 12.1% in 2014. Infrastructure investment has provided the primary impetus for this growth. Growth for the coming decade is projected to be more subdued, but still healthy at an average annual rate of 2.9% through 2024.187 Road Responsibility for road infrastructure in Sweden is divided between the national government, municipalities, and individuals. Because of the division of power between the state and localities, road infrastructure projects are determined and developed collaboratively between state and municipal agencies.188 Of the SEK 522 billion (US$ 61 billion) in investments pledged by the national government, SEK 155 billion (US$ 18.3 billion) will be allocated towards the operation and maintenance of state roads. Major areas of investment will include loadbearing capacity, frost heave prevention, and reconstruction of roadways. SEK 281 (US$ 33.1 billion) is allocated for developing the transport system to cater to current and future demands, including roads.189 Accordingly, significant opportunities exist for companies dealing with both new construction as well as road maintenance, upgrades and repair. Please review the following links for information on planned and ongoing procurement opportunities for road projects in Sweden.

Planned Procurement: http://www.trafikverket.se/contentassets/8f649f1f5a0e4ebfa2c5add9b63ed9a3/pdf_the_swedish_transport_administrations_procurement_plan_151120.pdf

Ongoing Procurement: https://eu.eu-supply.com/ctm/supplier/publictenders?B=TRAFIKVERKET&PS=1&SD=2011-06-08&ED=2012-05-30&FB=0&FT=0&FS=0&FC=0&FCPV=0&H=0

187 BMI Research: Sweden Construction Industry Report 188 Library of Congress: National Funding of Road Infrastructure: Sweden 189 Business Sweden: Construction and Infrastructure In Sweden

Business Sweden: Construction and Infrastructure in Sweden

Largest Construction Companies in Sweden, Sales

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Rail With over 9,700 km of track, Sweden’s domestic rail system is among the most environmentally friendly in the world — run exclusively on electricity produced from water power and other renewable resources. As with its road network, the government is making substantial investments in the rail system over the next decade.190 Planned spending will reach at least SEK 86 billion (US$ 10.1 billion) for operation, maintenance and reinvestment in existing state rail lines. A substantial portion of the SEK 281 (US$ 33.1 billion) allocated for new transportation systems will also be spent in the rail sector.191 Opportunities are available for construction of new rail lines and systems as well as maintenance and upgrades of existing lines. Major railway projects on the national level include:

• Bypass Stockholm • West Link (Västlänken) • East Link (Ostlänken) • Mälaren Line project (Mälarbanan) • Gothenburg-Borås project • rail renovation through central Stockholm • Varberg Tunnel • Flackarp–Arlöv, 4 tracks • implementation of the European Rail Traffic Management System

Please review the following links for information on planned and ongoing procurement opportunities for rail projects in Sweden.

Planned Procurement: http://www.trafikverket.se/contentassets/8f649f1f5a0e4ebfa2c5add9b63ed9a3/pdf_the_swedish_transport_administrations_procurement_plan_151120.pdf

Ongoing Procurement: https://eu.eu-supply.com/ctm/supplier/publictenders?B=TRAFIKVERKET&PS=1&SD=2011-06-08&ED=2012-05-30&FB=0&FT=0&FS=0&FC=0&FCPV=0&H=0

Seaports Sweden is effectively an island nation – at least from the transportation point of view. Located in the northern corner of Europe, with the longest coastline in Europe and with trading partners far across the sea, Sweden depends heavily on effective maritime links. Nearly 95% of its foreign trade is transported in seagoing vessels. The country has nearly 50 public seaports, ranging from small specialized ports to ferry ports to large, full service ports. Most of Sweden’s ports are still municipally owned. In most cases the municipality also owns the port infrastructure, which it leases to the port on commercial terms. In an international context, Sweden’s ports are unique in that most of them are organized as integrated companies as the result of a merger

190 Vasterbotten Investment Agency: Infrastructure in Sweden 191 Business Sweden: Construction and Infrastructure In Sweden

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between the former port authority and the local stevedoring company. The aim has been to boost efficiency and reduce costs – something the ports have managed to do very effectively. The income of Sweden’s ports – including cargo handling revenue – has increased by nearly 80% over the past 10 years, whereas cargo throughput has grown by only 30% in the same period. Cargo handling is concentrated in a few larger ports. A total of 118 million tones of cargo was handled in 2000 with the 11 largest ports handling 76% of the total. Of these ports, only Luleå and Gävle are run by traditional port authorities rather than integrated port companies. Customers can see the advantage of integrated port companies, since it means they can negotiate with a single entity. The mergers have resulted in more flexible administration and planning, and the Swedish port has become a reliable partner in the quest for intelligent transport solutions. Another organizational trend in the ports of Sweden is regional co-operation – on the one hand between stevedoring companies and on the other between integrated port companies. In the Stockholm region and around Lake Vänern, ports have begun to co-operate as a single organization under a common administration. Another example is the ports of Köping and Västerås, on Lake Mälaren, which together have created Mälarhamnar AB. As a result of various mergers and co-operations, the number of port administrations in Sweden has slowly but steadily fallen. There are now some 30 port authorities and port companies which have organized into larger units. About 50% of the cargo transported via Swedish ports consists of bulk cargo – cargo that is not unitized or packaged in some other way – with mineral oils representing the lion’s share. The other half consists of RoRo traffic in the form of trucks and trailers. In tonnage terms, containers, flats and cassettes make up just 7% of the total traffic.192

Sweden Container Port Traffic

Source: World Bank DataBank

192 Vasterbotten Investment Agency: Infrastructure in Sweden

1000000

1100000

1200000

1300000

1400000

1500000

1600000

1700000

2006 2007 2008 2009 2010 2011 2012 2013

Container port traffic (TEU: 20 foot equivalent units)

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Infrastructure: Sustainable Construction Materials193 Overview The Swedish construction industry has an approximate annual turnover of US$ 73 billion and the estimated value of the real estate stock is US$ 882 billion, excluding the value of infrastructure, such as roads, bridges, railway, harbors and airports. Together, the built environment accounts for approximately 50% of the national wealth. In 2014, the construction sector employed 312,000 people and investments amounted to US$ 45 billion, which accounts for 9% of the GDP. The civil engineering/urban development sector (real estate companies, construction material companies, architects and consultants) has an annual turnover of US$ 147 billion and employs 500,000 people which equals 11% of the total work force in Sweden. Sweden has ambitious plans to become fossil fuel independent by 2020 and the built environment is one of the key areas in this plan. The government program on energy efficiency and energy-smart construction, together with the National Housing Board’s building regulations provide recommendations and statutes for all new building and construction, renovation and refurbishment. The fossil fuels should be replaced by renewable energy by 2020 even within housing and construction sector. Total energy use per heated unit area in both residential and non-residential buildings is today decreasing. The estimated reduction should be 20% by 2020 and 50% by 2050. The current building regulations limit the annual energy use in houses using electricity as the heat source to 110 kWh per m2 (130 kWh in northern Sweden) and also specify that only 50% of the total energy should be used for electricity. Sub-Sector Best Prospects There are good prospects for US exports with the Swedish building and construction sector, and especially within the low-energy housing and energy efficient retrofit sectors. Energy efficient windows, doors and insulation materials and heat recovery ventilation systems are all sought for items in the Swedish housing market. Considering the number of low energy houses and apartment buildings that will be built in the following years, the market will welcome other innovative low energy construction principles in addition to the Passive House principle. Opportunities The demand for housing, office space, commercial venues and infrastructure has grown steadily in Sweden since mid-2000 and triggered an increase in construction costs. Traditionally, the large construction companies have procured their construction materials and equipment from local vendors. To make their procurement more effective and to lower the costs, they have started looking at importing, especially from low-cost countries. Gradually, this import has also encompassed tailor-made solutions, know- how and niche products, which provides good opportunities for U.S. companies. Resources: Swedish Transport Administration |Transport Styreslen |Swedish Construction Federation

The National Board of Housing, Building & Planning | Byggmaterialindustrierna 193 U.S. Commercial Service: 2015 Sweden Country Commercial Guide

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Sweden Green Shipping Sweden has a long maritime tradition, a sizable merchant fleet, and a strong commitment to environmentally friendly technology, making it a high opportunity market for Maine businesses in the shipbuilding and servicing sector and highly receptive to new advanced technologies. Swedish shipyards have transitioned significantly from shipbuilding to focus primarily on repair, maintenance and conversion, particularly towards more carbon neutral and environmentally friendly technologies.194 With annual turnover of about SEK 50 billion (US$ 5.8 billion US) per year, shipping remains an important industry in Sweden.195 There at least 733 registered sea transport enterprises in Sweden. The number of merchant vessels in the Swedish Register of Ships is about 100, but Swedish companies controlled 341 vessels of 1,000 grt and over in 2010.196 The sea freight industry in Sweden directly employs about 15,000 people, 10,000 of whom work aboard ships. Support functions for shipping employ a further 100,000 workers. These include subcontractors, brokers, shipping agents, shipyards, repair facilities, banks, insurance companies, infrastructure managers, and port and cargo handling companies197. About 50 boatbuilding/repair companies employ 15,000 people across the country.198 The broader maritime industry as a whole employs roughly 220,000 workers and has an annual turnover of SEK 200 billion (US$ 23.2 billion).199 The shipping industry is heavily concentrated in three regions, with Gothenburg, Stockholm and Skåne accounting for 80% of the sector.200 Gothenburg, located on the western coast and Sweden’s second largest city, is the largest seaport and among the most environmentally friendly in the world. Other major ports include Copenhagen-Malmö (joint venture between Sweden and Denmark), Brofjorden, Preemraff, Gävle, Helsingborg, Karlshamn, Luleå, Malmö, Oxelösund, Stockholm and Trelleborg.201

Sweden Container Port Traffic

Source: World Bank DataBank

194 European Commission DG Fisheries and Maritime Affairs: Employment Trends in All Sectors Related to the Sea 195 Ministry of Enterprise, Energy, and Communications: Swedish Shipping – Action Plan 196 European Commission: EU Transport in Figures 197 Ministry of Enterprise, Energy, and Communications: Swedish Shipping – Action Plan 198 Tommi Laaksonen: A Market Analysis on the Global Boating Industry 199 Linnaeus University, School of Natural Sciences: As Big as the Forest Industry 200 Ministry of Enterprise, Energy, and Communications: Swedish Shipping – Action Plan 201 EY – Ernst & Young Global: Shipping Industry Almanac 2014

1000000 1100000 1200000 1300000 1400000 1500000 1600000 1700000

2006 2007 2008 2009 2010 2011 2012 2013

Container port traffic (TEU: 20 foot equivalent units)

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Sweden is making substantial efforts towards transitioning to a more environmentally conscious shipping sector, involving both governmental and industry initiatives. Swedish shipping is near the forefront of environmentally friendly technologies and practices, and these efforts are seen as a competitive advantage, raising the industry’s profile and improving its brand. The government is taking action in several areas to improve environmental practices, including:

• Introducing stricter emission standards • Supporting alternative fuels and other technological fuel solutions • Improving monitoring and sanctioning systems.202 • Developing and implementing improved risk management systems • Establishing Västra Götaland as a knowledge and research centre for environmentally

compatible fuels for shipping • Reducing emissions of toxic substances such as toxic marine paint • Introducing a credit-based trading system for emissions of NOx and Sox below IMO limit • Supporting development of short sea shipping.203

The Swedish Shipowners association has called for a complete and broad reassessment of the whole transport chain as an essential element for achieving fossil free future for shipping. It estimates that the industry could reduce emission by up to 30% by 2030 “using known techniques,” but new innovations are needed to reach its goal of becoming a zero emission industry between 2030 and 2050.204 Accordingly, the Association has launched its own Climate Road Map, which lays out its ambition and goals to work towards a fossil fuel free shipping industry.205 One joint effort is the Clean Shipping Project which focuses on a holistic approach to environmental shipping, including the reduction of green house gases, SOx and NOx emissions as well as waste from heavy chemicals in anti-fouling, cleaning agents and lubricants. The project is responsible for the Clean Shipping Index which is an online tool which provides a rating to ships and shipping companies based on their environmental performance. This information is recorded in a database where cargo owners can then compare the environmental performance of the shipping companies. The sum of Swedish efforts to transition to a more environmentally conscious shipping industry provides substantial openings for Maine companies to capitalize on shipbuilding and retrofitting opportunities.206

202 Ministry of Enterprise, Energy, and Communications: Swedish Shipping – Action Plan 203 Region Vastra Gotaland: Maritime Strategy 204 Fairplay: Swedish Shipowners Say Logistic Changes Key to Zero Emission Target 205 Swedish Shipowners’ Association: Press Release 2015-12-18 206 WWF: Global Sustainable Shipping Initiatives: Audit and Overview 2011

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Green Shipping Trade Overview

U.S. Exports of Composites and Advanced Materials to Sweden (US$)207

Product 2014 %2013- 14 %2014- 15 All Composites 92,626,579 12.79 16.20 1 Plastics And Articles Thereof 77,651,803 16.68 27.20 2 Manmade Staple Fibers, Incl Yarns & Woven Fabrics 5,499,452 -7.31 -48.11 3 Wadding, Felt Etc; Sp Yarn; Twine, Ropes Etc. 4,597,075 3.54 -15.47 4 Manmade Filaments, Including Yarns & Woven Fabrics 2,624,708 16.19 -45.67 5 Impregnated Etc Text Fabrics; Tex Art For Industry 2,013,040 -25.34 -19.29 6 Spec Wov Fabrics; Tufted Fab; Lace; Tapestries Etc 240,501 0.01 -40.67

New England Exports of Composites and Advanced Materials to Sweden (US$)208

Product 2014 %2013- 14 %2014- 15 All Composites 11,169,599 25.06 120.78 1 Plastics And Articles Thereof 9,728,779 19.39 143.50 2 Wadding, Felt Etc; Sp Yarn; Twine, Ropes Etc. 900,205 173.13 -11.18 3 Impregnated Etc Text Fabrics; Tex Art For Industry 399,906 13.38 23.00 4 Spec Wov Fabrics; Tufted Fab; Lace; Tapestries Etc 127,733 56.83 -38.22 5 Manmade Filaments, Including Yarns & Woven Fabrics 12,976 -31.51 10.56 6 Manmade Staple Fibers, Incl Yarns & Woven Fabrics 0 -- --

U.S. Exports of Ships, Boats, and Floating Structures to Sweden (US$)209

Product 2014 %2013- 14 All Ships, Boats and Floats 12,225,823 7.50 1 Motorboats, Other Than Outboard Motorboats 5,214,866 13.33 2 Yachts Etc For Pleas/Sport Nesoi; Row Bts, Canoes 5,167,465 3.41 3 Lght Vessel, Fire Float, Floating Cranes/Docks Etc 1,220,265 72.60 4 Floating Structures Except Inflatable Rafts 249,054 159.97 5 Vessels,Nesoi,For Transport Of Goods And Persons 115,950 -- 6 Inflatable Rafts 90,984 541.95 7 Sailboats, With Or Without Auxiliary Motor 90,000 -84.81 8 Vessels,(Includ Lifeboats,Other Than Row Bt),Nesoi 47,253 -87.05 9 Inflatable Yachts, Vessels, For Ples, Sports 29,986 --

New England Exports of Ships, Boats, and Floating Structures to Sweden (US$)210

Description 2014 %2013- 14 %2014- 15 All Ships, Boats, and Floats 201,737 -22.31 58.29 1 Motorboats, Other Than Outboard Motorboats 118,100 -47.08 129.38 2 Yachts Etc For Pleas/Sport Nesoi; Row Bts, Canoes 52,884 44.86 -8.41 3 Vessels,Nesoi,For Transport Of Goods And Persons 21,000 -- -- 4 Vessels,(Includ Lifeboats,Other Than Row Bt),Nesoi 9,753 -- --

207 WISERTrade: State Database 208 Ibid. 209 Ibid. 210 Ibid.

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Sweden Other Opportunities The Swedish market offers a number of promising opportunities for Maine businesses beyond the Life Sciences, Infrastructure, and Green Shipping industries highlighted in this report. Other high potential sectors, as identified by the U.S. Commercial Service, include:

• Automotive parts and accessories • Cyber Security • Power-Generation-Systems • Travel and Tourism

United Kingdom Trade and Investment further emphasizes market opportunities in:

• Fashion and retail, particularly: o Mid-high end men’s work wear o Women’s high fashion o Shapewear

• Construction, particularly o Office and business premises o Public premises such as hospitals o Manufacturing industrial premises o New build o Renovation o Entry to supply chain

• Food and Beverage, particularly o Organic o Free from o Ready to eat

• Renewable energy, particularly: o Waste management o Wind turbines o Hydro power

For information and market research on any of these sectors, or other areas of interest, please contact MITC Trade Information Specialist Tom Conley at Conley@mitc.com or (207) 553-7708.