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Export
Promotion Council for EOUs & SEZ Units
L.B.
Singhal
1.ECONOMIC & COMMERCIAL REPORT FROM PARIS, FRANCE 2.ECONOMIC & COMMERCIAL REPORT FROM DENMARK 3.ECONOMIC & COMMERCIAL REPORT FROM SEOUL 1. I am enclosing along with Economic & Commercial Report, for the week ending 5-12-2003, received from Embassy of India, Paris. Our Embassy has highlighted that the European Union’s move to restrict the existing 250 Euros per ton duty concession on Basmati Rice to only traditional or pure line varieties, with effect from January 1, 2004, will adversely affect exports from India and Pakistan. The extent of damage may be comparatively less for Indian basmati rice exporters. Details of this news may be seen at Part I (II) of this Report. Our Embassy has also highlighted that European Union intends to restrict downstream use of imported chemical by the EU countries. However EUs proposed adoption of single community patent system would help increase access of Indian chemicals and pharmaceuticals products to the EU markets. This report has also given the details of trade enquiries in respect of textile, carpets, clothing, jute fibres, garments, coated fabrics, ladies garments, high quality textiles, stainless steel utensils, garden furniture & T-Shirts. The names of the importers, their addresses, telephone numbers, email addresses etc are given in Part II of this Report. 2. I am enclosing Economic & Commercial Report for October-November 2003, from Embassy of India, Denmark. It is highlighted in Paragraph 5 of this Report that contracts worth more than DKK 3 billion or approx. US$ 480 million are presently at stake in the Danish IT outsourcing market. It is also stated that roughly 50% or more of the existing IT outsourcing contracts within both private and public sectors in Denmark are about to expire. Hence consequently there is a talk about the “second wave of IT outsourcing in Denmark”. Annexure IV of this Report gives details of enquiries from Danish importers. The enquiries are for single jersey cotton fabrics, softwood & hardwood panels, floorings and tabletops, safe deposits, blow moulding machines, leather belts and steel wire etc. -2- 3. I am also enclosing Economic & Commercial Report, for the month of September 2003, received from Embassy of India, Seoul. It has been highlighted that that bilateral trade between Republic of Korea and India jumped up by 54.5% to the record high level of $ 2722 million during the first 7 months of 2003. This report also gives the details of trade enquiries in respect of refrigeration, air-conditioning manufacturers, textile machinery, shoes, scarf, muffler, shawl, chemical items, henna, paper, manufacturer of steel and diamonds This is for your information please. _____________________________ EMBASSY
OF INDIA, PARIS ------------------ I.COMMERCIAL NEWS-Bilateral Michelin revives Maharashtra plan After acquiring a stake in Apollo tyres, tyre major Michelin has now revived its plan to set up a plant in Maharashtra . Michelin Apollo Tyres (MAT), a new entity in which Michelin holds 51% equity while Apollo has the rest, is interested in investing in Maharashtra and has submitted a proposal to the government. MAT plans to invest over Rs 400 crore to build a greenfield manufacturing facility with an initial capacity of 1,00,000 tyres per annum. The proposed plant is likely to come up at Ranjangaon, where Apollo Tyres already has a tube manufacturing facility. The Ranjangaon plant accounts for about 15-20% of the total tube requirement of the company. The tyres produced by MAT will be marketed under Michelin brand. The state government and Michelin India, a Michelin arm, had signed an MoU for the project. The project was expected to have a manufacturing capacity of around a million tyres a year, for which around 35 ha of land, developed by the Maharashtra Industrial development Corporation (MIDC) at Talegaon had been earmarked. However, the overall slump in the auto industry then had forced the company to put its plans on hold. Now the upswing in the economy seems to have resulted in the company changing its decision. (Economic Times) Areva enters India via Alstom T&D arm buy Areva, a Euro 8.3 billion (approximately Rs 42, 330 crore) nuclear power and electronic connectors manufacturer, has quietly entered India through the acquisition of Alstom’s worldwide transmission and distribution (T&D) business. Areva, a French company, might rename the company after the acquisition and then transform it into a closely-held one. Being a nuclear power company, it runs its global operations through close-held subsidiaries. The existing shareholders of Alstom Ltd would be given an exit option. The procedural formalities, including legal documentations, are expected to be over within three months. Areva is currently having presence in 30 countries, including Taiwan, Japan and China. (Business Standard) Numeric Power to beef up ties with French partner Numeric Power Systems may form a joint venture with its French partner, Merlin Gerin. The nature and scope of the JV is likely to be decided in January. Numeric produces `uninterruptible power supply' (UPS) equipment. The company also represents Merlin Gerin in India and sources some of the high-end UPS products from the French partner. Conversely, Merlin Gerin also sources some types of UPS products from Numeric for sales abroad. (Business Line) II. COMMERCIAL NEWS-Multilateral Basmati exports may be hit on new EU rule The European Union's move to restrict the existing 250 euros per tonne duty concession on basmati rice to only traditional or `pure line' varieties with effect from January 1, 2004 will adversely affect exports from both India and Pakistan. The extent of damage may be comparatively less for Indian basmati exporters. EU has unilaterally gone ahead with amending Commission Regulation (EC) No 1503/96 of July 29, 1996 to its advantage. The existing regulation — more specifically Article 4bis - provides a uniform duty derogation of 250 euros per tonne on brown (unpolished) basmati rice, irrespective of whether it is a traditional `pure line' or a crossed hybrid variety containing only one true-line parent. At present, there are a total of 11 notified Indian basmati varieties and 5 Pakistani varieties, qualifying for the duty concession. Normal brown rice imported into the EU attracts a maximum (bound rate) duty of 264 euros. Since basmati rice is eligible for a 250 euros duty reduction, it means that the maximum duty payable comes to just 11 euros. It is this duty derogation, conferred by Article 4bis of Regulation (EC) No 1503/96, that has been mainly responsible for the huge surge in basmati exports from India and Pakistan to the EU since the mid-1990s. While in 1994, basmati exports to the EU amounted to about 51,000 tonnes for India and a 4,300 tonnes for Pakistan, these quantities are expected to touch 1.6 lakh tonnes and 80,000 tonnes, respectively, this year. The surge in basmati exports has come mainly at the expense of long grain rice from other countries, such as Thailand's `Jasmine' and `2473' of the US. To illustrate, traditional brown basmati of Indian origin is currently quoting at $675 per tonne free on board (f.o.b), which is way above the corresponding rates of $445 per tonne for Thai Jasmine and $250 per tonne for 2473. What tilts the balance, however, is the 250 euros duty concession (not available to normal long-grain rice), which makes basmati relatively affordable in the European market. The EC's argument is that the duty concession has been given to basmati, considering its premium quality status, which automatically ensures that does not pose a threat to European rice farmers. The problem, however, arises if the duty derogation is being availed not just by traditional, but even crossed basmati varieties that fetch much lower prices and therefore do not deserve the concessional import treatment. For instance, India's Pusa Basmati-1 is now selling at $480 per tonne f.o.b, while the corresponding rates for Pakistan's brown Super Basmati and Basmati 385 are $470-490 per tonne and $350-370 per tonne, which are almost the levels of Thai Jasmine. It is in this context that the EC has found it "necessary... to define in a very precise way which varieties should have a right to the reduction" and hence limit the 250 euros concession to only the notified six Indian and two Pakistani traditional `pure line' varieties. For Pakistan, the loss arising from this is obvious because it does not commercially grow any traditional variety and its entire 80,000 tonnes basmati exports to the EU comprises hybrid varieties. India's exports are predominantly traditional basmati rice (1.1-1.3 lakh tonnes), but even the 30-50,000 tonnes annual shipment of Pusa Basmati is, by no means, insignificant. The Government has every reason to be worried, more so when Mr Fischler's amendment proposes that even the restricted 250 euros concession amount "may be revised in response to market trends, in particular as regards the quantities imported". (Business Line) EU restrictions on imported chemicals to hit exporters India on 28th November expressed concern over the European Union’s (EU) stance that downstream use of imported chemicals by the EU countries would be restricted. According to Vinay Kohli, secretary, department of chemicals and petrochemicals, “there is no denying the fact that should (this) policy be implemented, there will be an adverse impact on cost of chemicals exported from India ”. Speaking at the fourth India-US business summit, he said that EU’s proposed adoption of single community patent system would, however, help increase access of Indian chemicals and pharmaceuticals products to the EU markets. The proposed REACH system (single integrated system of registration, evaluation and authorisation of chemicals) should be established as quickly as possible. Also, the functioning of agencies such as the European Medicines Evaluation Agency should be encouraged so that the access of Indian pharma products to the EU countries would increase. The EU has recently brought out the details of a new format for marketing authorisation applications and other dossiers. Centralisation of such procedures will be useful, said Mr Kohli. (Economic Times) Bundesbank Chief Voices Concern About Euro Stability German
central bank chief Ernst Welteke expressed concern on 30th November
about the stability of the European single currency, which he
said could be undermined if the growth and stability pact is weakened.
In a deal last week, EU finance ministers suspended "for
the time being" disciplinary measures against Germany and
France for failing to get their public deficits under pact limits
of 3.0 percent of gross domestic product. The move has sparked
an unprecendent crisis in Europe, amid fears the 1997 pact, ironically
a safety measure demanded by Berlin before it would sign up to
the single currency, will be effectively killed off. The two countries,
Europe's political and economic heavyweights, ran up budget deficits
in excess of the limits last year, will do so again in 2003 and
show little sign of doing much better next year. Welteke, who
as Bundesbank chief sits on the decision-making governing council
of the European Central Bank, advised the German government to
take tough budgetary measures. III. COMMERCIAL NEWS –InternalBrussels to demand EDF repay EUR 888 million The European Commission is preparing to ask Electricite de France (EDF) to repay EUR 888 million (USD 1.064 billion) received in tax breaks from the French state. European Union Competition Commissioner Mario Monti's office is also calling for an end to state guarantees for the French state-owned power utility, as well as a reform of EDF's retirement scheme. In Paris junior French Industy Minister Nicole Fontaine took issue with Monti's position, which must still receive the backing of the full Commission. "We think Commissioner Monti's position can be challenged," she told BFM Radio, adding that the government was awaiting the Commission's official statement on the matter. (Expatica) French new car sales crash in November The French new car market weakened further in November and the full year should see sales of new cars below two million units for the first time since 1998. Sales of new cars in France fell 9.4 percent in November compared with the same month last year, breaking what had been seen as a somewhat healthier trend in September and October. The committee said 149,285 new cars had been registered last month, with French models particularly hard hit. Their market share dropped 3.4 percentage points from November 2002 to 57.7 percent. The French auto market has weakened almost without interruption since the start of the year, with manufacturers trying to stem the fall through promotions. Registrations of new cars declined 6.9 percent in the first 11 months of the year from the same period of 2002. France has been the only major European auto market to decline this year, noting that markets were stable in Germany and Britain while Italy and Spain showed improvement. In November, new Renault registrations fell 10.4 percent from the same month last year, with market share shedding 0.3 percentage points to 27.6 percent. Peugeot's registrations dropped 18 percent, with both the Peugeot and Citroen brands together posting 18 percent year-on-year declines. Peugeot's total market share fell 3.2 percentage points to 30 percent. (Expatica) Storms devastate South France France's second-biggest city, Marseille, and its surrounding area was declared a disaster zone on 3rd December after floods claimed at least three lives and forced mass evacuations. President Jacques Chirac travelled to the area after calling for "the utmost precaution" to be taken in the flooded zones. Two days of torrential rains submerged roads, rail lines and many towns, and forced the closure of reactors in two power plants. Prime Minister Jean-Pierre Raffarin's spokesman said EUR 12 million (USD 14 million) in emergency aid would be provided for the worst-hit regions. (Expatica) French Edf Electricity Giant Seeks 15 Percent Of European MarketThe French electricity group EDF plans to hold on to 80 percent of its customers as the French market is opened up and also plans to account for 15 percent of the European market, company chairman Francois Roussely signalled on 4th December. The EDF also intends to increase profitability four-fold by 2006. However representatives of the powerful CGT trade union in EDF, and its gas counterpart GDF, rejected strategic plans for 2003-2007, saying they amounted to plans for "destruction" with massive job losses. Referring to a likelihood that EDF might be part privatised to raise capital, they said no investment plans had been presented for productive and network capacity. EDF, once the state monopoly supplying France with electricity, is being prepared for extension of competition in France. In July the government called on EDF and GDF to draft "ambitious" plans for future development and in particular to boost their presence in foreign markets. Prime Minister Jean-Pierre Raffarin said the statutes of the two groups would be adapted to open the way for part privatisation. EDF has caught the attention of the European Union's executive commission because of an aggressive expansion drive that has seen it enter the electricity markets in Britain, Germany, Italy and Spain. On July 3, the French energy watchdog CRE said 37 percent of the French industrial electricity market had been opened to competition. Some 350 industrial users from a total of 3,100 affected by the measure had switched away from the EDF. Thirty percent of the industrial gas market was open, with 24 out of 450 eligible sites having switched away from GDF. Next year 530,000 companies will be able to choose and in 2007 about 10 million homes will have a choice of gas supplier.The company has already expanded elswehere in the European Union, raising some objections that French authorities had been slow to open up the French domestic market to outside providers. (The Tocqueville Connection) IV. COMMERCIAL NEWS –ExternalAlcan wins control of rival Pechiney Alcan, the Canadian aluminium group, has won control of its rival Pechiney after 92.2 per cent of the French group's shareholders accepted its €4bn ($4.84bn) cash-and-shares takeover bid. The Montreal-based group said on 2nd December it was planning a second offer, lasting at least 10 French trading days, in an effort to lift its stake above the 95 per cent needed to launch a mandatory "squeeze out" offer to remaining minority shareholders. (Financial Times) French Show Opens In Bangladesh To Boost Trade A trade show opened in the Bangladeshi capital Dhaka on 4th December aimed at widening the market for French imports in this South Asian country and reducing France's trade imbalance of nearly 500 million dollars. Thirteen companies involved in telecommunications, pharmaceuticals and the natural gas sectors are participating in the two-day 'French Forum 2003' show, which was organised by the France Bangladesh Chamber of Commerce and Industry. Last year Bangladesh imported 98 million euros (118 million dollars) worth of goods from France, while the South Asian country's exports were worth 501 million euros. Michel Lummaux, the French ambassador to Dhaka, said his country was the single largest direct foreign investor in Bangladesh. He said a new project by French cement giant Lafarge, would start production next year. Lafarge Surma Cement, a French project with some local and foreign sponsors, has a quarry in India and a production plant in Bangladesh. The plant, one of the largest in the world, and the quarry will be connected by a 17-kilometre (11 mile) cross-border conveyor belt. (The Tocqueville Connection) Renault may buy big chunk of Ssangyong French auto maker Renault has submitted a letter of interest to buy a major stake in South Korea ’s Ssangyong Motor. Ssangyong Motor, a sports utility vehicle maker, has said its creditors would sell 55.4% of the company via an international auction. The car maker, spun off from the now defunct Daewoo Group in ‘00, has been under a creditor-led debt restructuring programme since December 1999. An investment by Renault in Ssangyong would mark another inroad by Europe’s fourth-largest car maker into Asia ’s auto industry. Renault has successfully turned around Japan’s Nissan Motor from near bankruptcy in the late ’90s to the world’s most-profitable car company in terms of operating margins. It expects its 44.4% stake in Nissan to contribute more than 1.7bn euros to Renault’s bottomline this year. (Economic Times) PART II Some of the prominent French enquiries are given below:
(Disclaimer: Most of the news items appearing in this report have been collected from various news sources, and they don’t necessarily reflect the views of either Govt. of India or the Embassy of India, Paris)
Mr.
L. B. Singhal
COMMERCIAL & ECONOMIC REPORT FOR MONTHS OF OCTOBER & NOVEMBER 2003 a) Commercial & Economic Developments in Denmark Record Surplus on Danish Balance of Payments 1. A solid surplus of DKK 5.3 Billion or approx. US$ 850 Million was recorded on the Danish Balance of Payments in month of September 2003 alone. The figure is almost identical with the BoP surplus achieved by Denmark in September 2002. However, in the third quarter of calendar year 2003, the aggregate Danish BoP surplus now totals as much as DKK 12.5 Billion as compared to only DKK 9.2 Billion in July-September 2002. The surplus accumulated on the Danish Balance of Payments during the first 9 months of the current calendar year adds up to DKK 32.3 Million or an amount exceeding US$ 5 Billion, rising from DKK 24.3 Billion in January – September 2002 or by 33%. Denmark Obtains Ultimate Creditworthiness 2. Finally substantiating that Denmark ranks among the world’s most creditworthy nations, the leading, London-based credit rating agency Fitch Ratings recently upgraded the rating of Danish public debt in foreign currencies to the highest possible level, the AAA rating. Denmark parades top marks from the world’s three dominant credit rating agencies. A while back, Fitch Ratings had already granted Triple A rating to government bonds issued in Danish Kroner but had been reluctant to take this step in respect of Denmark’s foreign debt. Already in 1999, however, Moody’s Investor Service had granted Denmark Triple A rating in all respects, while Standard & Poor’s followed suit in 2001. Among the reasons given by Fitch ratings for the delayed upgrading is Denmark’s rejection of EURO currency membership. The new development will enable Danish companies and mortgage banks to achieve AAA ratings, too. Among the 87 countries rated by Fitch, only 13 possess Triple A rating. Today, Denmark’s burden of debt is lighter than that of other Triple A countries such as USA, France, Germany, Switzerland, Holland, and Austria. Copenhagen Attracts International Head Offices 3. The Danish capital of Copenhagen is becoming an increasingly attractive location for placing international head offices. Last year, 14 major companies thus chose to set up headquarters in this city – more than both Paris, Berlin, Amsterdam, and Dublin are able to boast of. Only London surpassed Copenhagen by attracting the head offices of 36 international firms. This is evident from a new analysis published in the investment intelligence magazine ‘Copenhagen Monitor’ and performed by the organization ‘Copenhagen Capacity’ on the basis of information gathered from Ernst & Young’s European Investment Monitor Database. According to the concerned study, Copenhagen has consolidated its position as the preferred location for strategic decision centers in the Nordic region. In the calendar year 2002, 59% of all head offices established in Scandinavia consequently got a Copenhagen address. Judging from preliminary figures for CY 2003, there is every indication that the trend will continue. Denmark’s IT Environment Gets Top Marks 4. Denmark takes a noteworthy second place on a new list of advanced IT nations prepared by the ITU – the international tele-communication union. The so-called Digital Access Index (DAI) divides all UN member countries into 4 categories. Belonging in the best category, Denmark is narrowly outperformed only by Sweden. The new ITU statistics do away with previous methods of measurement, which took into account nothing but raw technological dissemination data concerning areas such as Internet access and cellular telephony. Now a variety of economic and educational factors are also included in the ITU’s assessments. Outsourcing Contracts worth Billions up for Grabs 5. Contracts worth more than DKK 3 Billion or approx. US$ 480 Million are presently at stake on the Danish IT outsourcing market and must be re-negotiated within the next twelfe months. Such is the overall conclusion found in a report commissioned by the IT firm CSC (Computer Sciences Corporation), indicating that roughly 50% or even more of the existing IT outsourcing contracts found within both the private and public sectors in Denmark are about to expire. Leading players on this market consequently talk about the “second wave of IT outsourcing in Denmark”. Fierce competition prevails among the prominent market players, who apart from the CSC include IBM, DM Data, and Kommunedata. The total value of the Danish market for IT outsourcing is estimated at DKK 6.7 Billion or nearly US$ 1.1 Billion in CY 2003. This figure is expected to increase to DKK 7.6 Billion in CY 2004 or by more than 13%. Indian Bid for Major Danish IT Company 6. It is reported in the commercial Danish press that the Scandinavian Airlines System (SAS) has every intention of divesting its subsidiary the Scandinavian IT Group (SIG) before the end of calendar year 2003. The three final contenders are reported to be IBM, Computer Sciences Corporation (CSC), and Tata Consultancy Services (TCS), which has tabled an official bid for SAS’ IT company with the purpose of acquiring a strong, Nordic IT bridgehead. In this connection, leading representatives of TCS have voiced the opinion that through organic growth alone, TCS cannot achieve its firm objective of doubling its turnover in Scandinavia in just 2 years, thereby generating between 20% and 30% of Tata’s aggregate European turnover from this region. Prominent Danish analysts believe that Tata’s sudden focus on the Nordic markets may well bring increased pressure to bear on standard IT consultancy charges (which have already declined by 40% during the past two years) to the dismay of competitors such as IBM, CSC, Maersk Data, WM Data, and TietoEnator. Already in August 2003, SAS’ management decided to outsource its entire ticket account systems department to Mumbai, thereby rendering more than 150 Copenhagen-based SAS employees redundant. Very recently, the national postal authority Post Danmark also decided to outsource IT-related tasks to Tata Consultancy Services to an extent rougly corresponding to 10 man years.
Confederation of Danish Industries Establishes Joint Venture in China 7. The Confederation of Danish Industries (DI) intends to establish a joint venture in Shanghai, China next year with the purpose of assisting Danish companies in penetrating the difficult Chinese market. While entering into a JV abroad for the first time, DI feels that the model may be applicable to other countries. According to a leading representative of DI’s consultancy firm DI International Business Development (DIBD) and, at the same time, the Director of the actual JV named ‘Own Man in China’ (OMIC), DI is merely complying with its member companies’ strong wishes for assistance on the Chinese market. DI’s partner will be the Danish consultancy firm Asia Base A/S already situated in Suzhou in the outskirts of Shanghai. OMIC will be offering Danish companies easy and relatively inexpensive access to the markets of China. Initially, 12 Danish companies will get the opportunity to place a Chinese staff member on OMIC’s premises in order for these companies to be provided with a springboard for setting on foot exports to China or gaining greater control of their Chinese agents. It is believed that other companies may also want to start actual production. After an average time span of two years, the companies should, preferably, conclude their endeavours by establishing own branches unrelated to OMIC – or they may just realize that China is simply not their kind of ball game. OMIC, however, is not meant to be a conventional ‘office hotel’. While ordinary services such as IT and secretarial assistance will be provided, OMIC will further assist Danish companies by recruiting Chinese employees, coach these, and send monthly reports to their parent firms. DI estimates that at least 100 Danish firms may be regarded as potential participants in OMIC. Russia Defends Dangerous Oil Tankers 8. The Danish Shipowners’ Association feels that Russia is obstructing the employment of safe, double-hulled oil tankers as a measure of precaution to protect Danish waters. The Association urges Danish politicians as well as EU authorities to bring increased pressure to bear on Russia, persuading the country to intensify demands on vessels collecting Russian oil.
“The EU should use its political and economic powers to force Russia to live up to the tightened demands. – The Baltic nations (Estonia, Latvia, Lithuania) are about to join the EU and intend to respect the new regulations” Mr. Knud Pontoppidan, Chairman of the Danish Shipowners’ Association and Director of the A.P. Moeller Line declares. Very recently, the EU introduced stipulations ensuring that safer, double-hulled tankers must be used for transporting heavily polluting oil products from EU harbours. The initiative may be seen as an offshoot of the wreck of the old, single-hulled tanker Prestige off the coast of Spain about a year ago. Just before its loss, Greek-owned Prestige had, by the way, been passing through Danish waters. Rather needless to say, intensified safety measures would add to the business potential of Denmark’s own, modern fleet of vessels. It is quite necessary to make Russia, one of the world’s largest oil-producing nations join the club, however. Huge quantities of oil are daily being transported from the new Primorsk terminal near Sct. Petersburg through the Baltic Sea and further through the Great Belt separating the Danish islands of Zealand and Funen. The Great Belt being international waters, however, Denmark cannot in an isolated manner ban single-hulled oil tankers from sailing close to Danish shores. Mr. Knud Pontoppidan hopes that Russia will accept the demands in month of December, when the International Maritime Organization (IMO) places the issue on its agenda.
Terma to Protect German Transport Planes 9. During the next three years, Denmark’s largest producer of high-technology defence materiel, Terma in co-operation with EADS will be equipping transport planes from the German air force with new electronic self-protection mechanisms. The value of Terma’s contract with the European defence group EADS’ military aircraft division in Munich exceeds DKK 100 Million and comprises equipment mounted on the inside as well as outside of type C-160 Transall transport planes. NEG Micon Tunes down Target Result – Future Object of Takeover? 10. The large-scale Danish windmill manufacturing group NEG Micon recently readjusted the estimate for its calendar year 2003 result from DKK 0 – 100 Million to a downright deficit of DKK 300 – 500 Million, referring to the impact of delayed orders and postponed projects, especially in Germany. The disappointing message from Micon’s headquarters immediately occasioned the value of the company’s shares to decline by almost 20%, causing its investors to lose close to DKK 470 Million and the company’s aggregate market value to be reduced to DKK 1.9 Billion or no more than US$ 300 Million. In spite of its lacklustre performance, NEG Micon is still believed to possess a fine global platform and an excellent product range – the widest assortment of all international windmill manufacturers. Several analysts and investors, therefore, believe that Micon may be viewed as an attractive acquisition by multinational giants such as General Electric. Siemens and Caterpilar are also believed to have displayed interest. Among the positive aspects it may also be mentioned that Micon has finally managed to settle a protracted dispute concerning a Canadian windmill project dating back to 1999 – the year, when Micon experienced a life-threatening crisis. Accepting a compromise now enables Micon to get released a guarantee commitment, which for years has been straining the company’s accounts. These circumstances have already been taken into account when calculating above-mentioned, negative estimate, however. Two entirely new orders for a total of 105 windmills having a value of approx. DKK 1.1 Billion and an aggregate capacity of 170 MW have moreover been received by NEG Micon from the electricity company Meridien Energy Ltd. operating on the growth markets of Australia and New Zealand. b) Policy Embassies of Denmark Should Endeavour to Increase Danish Imports! 11. In his new action plan named ‘Growth Through Globalization’ published on 27.1003, the Danish Deputy Prime Minister and Minister for Economic & Business Affairs, Mr. Bendt Bendtsen of the Conservative Party attracts attention to the fact that Danish imports rank among the smallest of all European countries, Denmark importing 30% less than EU average. While presenting the action plan, the Minister furthermore declared that his Government intends to remove barriers to foreign suppliers such as differences between Danish and foreign standards and special labelling requirements, thereby creating better access for Danish companies to inexpensive sub-suppliers abroad. The action plan also establishes that higher imports are not likely to reduce total employment in Denmark. On the contrary, cheaper goods from low-wage countries will increase the purchasing power of Danish consumers, thereby stimulating employment. In the action plan, Danish companies are likewise being urged to avail themselves of the existing outsourcing potential to a much greater extent in order to increase their own competitive power. While the ideas of deliberately increasing imports into Denmark and removing trade barriers are met with certain dismay by the Confederation of Small & Medium-Sized Enterprises in Denmark (out of fear that jobs created by local Danish sub-suppliers may eventually be lost), the initiatives are welcomed by the Confederation of Danish Industries (DI) and, especially, by the Danish Chamber of Commerce (HTS). Noting that the conclusion to be reached from the Danish Government’s report on globalization should prompt Danish embassies abroad to actively assist in increasing Danish imports, the chief economist of the Danish Chamber of Commerce/HTS, Mr. Jens Brendstrup is quoted for stating that ”our embassies abroad must also be measured in accordance with their endeavours to promote imports – just like their ability to promote exports is already being measured”. He again emphasizes that imports would strenghten the competitiveness of Danish trade and industries in consequence of cheapter sub-supplies and lower retail prices. c) Trade between Denmark and Third Countries 12. Trade statistics illustrating Danish exports to and imports from the EU, EFTA, OPEC, ASEAN, China, Germany, Sweden, UK, and the USA during month of August 2003 and the interval January – August 2003 are included in Annexure II. d) Global Danish Imports & Exports 13. Global Danish trade statistics for months of August 2003/2002, September 2003/2002, and the intervals January – August/January - September 2003/2002 are given in Annexure I. While Danish imports have declined by 3.6%, global Danish exports have also registered a marginal decline of 0.6%. The increase in Denmark’s surplus on its global trade balance consequently touches 22%. e) Indian Exports and Their Variations 14. Annexure III comprises detailed, commodity-wise breakdowns of Indian exports to Denmark in months of August 2003/2002, September 2003/2002, and the period January-September 2003/2002. It may be noted that in the first 9 months of calendar year 2003, India’s exports to Denmark have increased by 20.8% over their performance in the corresponding period of 2002. It may also be pointed out that the value of Indian exports to Denmark during the first 3 quarters of calendar year 2003 now corresponds to 95% of the value of Indian exports to Denmark in the entire calendar year 2002. f) Details of Trade Enquiries 15. Recently received trade enquiries from Danish importers are listed in Annx IV. g) Tender Information 16. Notices Inviting Tender issued by the National Centre for Antarctic & Ocean Research, Goa for procurement of acoustic equipment and various microscopes were distributed among relevant Danish manufacturers & vendors on October 8th 2003. h) Trade Complaints (from local parties) None in October 2003. i) Visits to Denmark of Commercial Delegations from India 17. A high-ranking Indian delegation headed by the Honourable Minister of Shipping, Mr. Shatrughan Sinha visited Copenhagen on October 7th-8th 03 to participate in an Indo-Danish Shipping Conference organized on the initiative of the Danish Shipowners’ Association. The Conference was also attended by the Danish Deputy Prime Minister and Minister for Economic & Business Affairs, Mr. Bendt Bendtsen as well as leading Danish and Indian government officials and representatives of the private Danish and Indian shipping sectors.
The conference focused on I) strengthening the Indo-Danish maritime dialogue – including stimulation of commercial relations, integrated global networks, hub ports, and commercial partnerships; II) possibilities of public/ private partnerships and co-operation between India and the EU in the area of shipping; III) exchange of views on current shipping policy issues, including market access, OECD, and WTO; IV) co-operation on safety and security within the framework of IMO; V) training of sea-farers and mutual recognition of certificates. (Dr. Ausaf Sayeed) Counsellor No. SEO/COM/201/1/03 Embassy of India SeoulEconomic & Commercial report for the month of September 2003Bilateral Trade
According to Korea Custom Service statistics, bilateral trade between Republic of Korea and India jumped up by 54.1% to the record high level of $2,722 million, during the first seven months of 2003. Korean exports surged by 112.45% to $1,554 million. Imports from India recorded marginal decrease of 1.89%. Electrical Machinery & Equipment (including mobile hand sets and CDMA equipment) recorded phenomenal growth of 308% from $125.7 million to $513.2 million. Import of ships by India increased from $37 million to $205 million. Import of oil cakes and iron ore from India declined by 34% and 15% respectively whereas import of diamonds increased by 125%. Trade figures are annexed. Rise in Korean exports
According to Ministry of Commerce, Industry & Energy, Korea’s exports grew by 10.9% to $ 15.4 billion during August 2003 as compared with the same month of the previous year. Korean imports amounted to $ 13.55 billion during the same month. According to the Ministry of Commerce, Industry & Energy, Korea’s exports are likely to break the previous record of exports this year. The exports are expected to touch $ 180 billion for the current year. Korea’s exports had dipped to $132.3 billion during the financial crisis in 1998 before recovering to a record of $ 172.3 billion in 2000, $ 150.4 billion in 2001 and $ 162.5 billion last year. Volume of exports for the current year until August end was $ 119.97 billion up 16.2% year-on-year basis. Imports also expanded by 17.9% to $ 114.26 billion this year. Decline in Foreign Direct Investment Foreign direct investment in Korea has been declining for the past four years. In a report, Ministry of Commerce, Industry & Energy has said that foreign direct investment in Korea was $15.22 billion in 2000, $11.2 billion in 2001, $9.1 billion in 2002 and $2.66 billion in the first half of 2003. Figure for the current year could be less than the level of 1998 when the Korea was hit by the Asian financial crisis. In 1998, the FDI was $8.85 billion. According to the Ministry of Commerce, Industry & Energy, the investment has been hindered by labour disputes and state regulations. Growth in Korean economy According to the Bank of Korea, Korean economy grew 1.9% in the second quarter of this year as compared with the same period of the previous year. This growth rate is the lowest in 4½ years. The Bank of Korea confirmed that the economy is trapped in a technical recession as it contracted by 0.7% in the second quarter on a quarterly basis following the first quarter’s 0.4% minus growth. According to the Ministry of Finance and Economy in its World Economic Outlook report, IMF has lowered its economic growth forecast for South Korea for the current year to 2.5%, less than half of what it had predicted earlier. In March and April 2003, IMF had predicted 5.5% and 5% growth respectively. Reasons for downward revision of the forecast are the spread of SARS, decrease in domestic consumption and rise in global oil prices. IMF also predicted that ROK should be able to achieve 4.7% growth next year. IMF estimates that Korea’s inflation and unemployment rates will be 3.3% and 3.4% respectively for 2003. WTO Conference in Mexico ROK Minister of Agriculture & Forestry Mr. Hun Sang-man and Minister of Trade Mr. Hwang Doo-yun attended the WTO meeting in Cancun, Mexico. Korea’s interest was in slowing down the opening of agricultural markets while maintaining its status as a developing country. Its goal was to push for opening of foreign markets for manufactured goods while striving for gradual liberalization of the global agricultural trade. A South Korean farmer activist Lee Kyung-hae killed himself at an anti-WTO rally in Cancun, Mexico on September 10, 2003. South Korean farmer groups have vehemently opposed opening of the agricultural market or measures leading to a reduction in financial support to agriculture by the government. Rice, the staple food of Koreans is the main source of income for 6 million Korean farmers. The price of Korean rice is several times higher than the price of rice produced in USA and China.
Typhoon hurts key industries
The most powerful typhoon in a century hit southern and eastern parts of Korea on September 12, 2003 causing heavy damage to life and property. The National Disaster Prevention and Counter Measures Headquarters said that 96 persons were confirmed dead and 25 were missing. Damage to the property is expected to exceed 1.28 billion dollar. The typhoon paralyzed shipping facilities at Busan, temporary halt of operation of about 20 companies including SK Corporation and S.Oil in Ulsan. The loss to the economy is likely to pull down the annual growth of the economy below 3%. SK Group to cut affiliates from 59 to 10 The Hana Bank, the main creditor bank of Korea’s third largest conglomerate SK Group announced on September 29, 2003 that the group will reorganize itself by slashing number of its affiliates from 59 to 10. Creditors of the group have decided that a number of SK affiliates, except core business sectors like energy, chemical and IT shall be disposed off on medium/ long-term basis. Trading arm of the group has been in serious trouble because of manipulation of accounts by the management. Charges against SK Group for illegal funding of political parties is under investigation. The group’s Chairman has since resigned from the Chairmanship of the Federation of Korea Industries – the powerful business association of Korean chaebols. Dr. Lee Ki-ho & 5 others convicted in North Korea payoff scandal
The Seoul District Court sentenced Dr. Lee Ki-ho, former Senior Secretary to the President of Korea and five others to three years imprisonment with a four year probation term. Dr. Lee Ki-ho has been found guilty of violating the law on economic crimes for transmitting money to North Korea just before the 2000 inter-Korean Summit. Dr. Lee Ki-ho had visited India last year as Special Envoy of the President. LG Electronics seeks $ 2 billion sales in India According to press reports, LG Electronics Inc., South Korea is seeking revenue of 100 billion rupees ($ 2.2 billion) in India in the next five years. The company is planning to invest 5 billion rupees in five years to expand its capacity. LG already has a plant in Noida and they would be spending 1.5 billion rupees to built a second plant in Pune which is expected to start in August next year. 30-member delegation from KITA visited India A 30-member delegation from Korea International Trade Association (KITA) visited India on September 01, 2003 and had meetings with FICCI and businessmen in New Delhi. Korea-Pakistan agree on debt repayment
According to the press reports, South Korea and Pakistan have reached an agreement on the repayment of debt owed by Pakistan to some Korean firms including Samsung, LG and Daewoo and the Korean Government. The outstanding debts of $400 million will be repaid over eighteen years starting from 2006 with the interest rate of 0.8% above the standard London Interbank Offered Rate. The agreement was reached during negotiations between Deputy Finance Minister of Korea and Vice Finance Minister of Pakistan in Seoul. South Korea, China and Japan agreed to boost IT ties South Korea, China and Japan agreed on September 08, 2003 on joint research and cooperation in seven information technology fields as part of their efforts to turn North East Asia into a global IT hub. According to the Information & Communication Ministry of Korea, seven areas of cooperation are digital broadcasting, next generation internet networks, open source software, information security and protection, next generation mobile communications, telecom policy and the 2008 Beijing Olympic games. The three countries signed an agreement to create a working level committee during their IT Ministers Conference in Korea. Korea and Japan expect that this agreement with China could generate benefits from the Beijing Olympic games. Trade Fairs ITPO’s Tokyo office and this Embassy participated in Korea’s main textile exhibition Preview in Seoul held in late September. Visits Shri S.K. Agrawal, Chairman-cum-Managing Director of National Mineral Development Corporation and Shri Sanjiv Batra, Director, MMTC visited Korea from September 14 -1 16, 2003 to explore and discuss possibilities of Korean investment in mineral ore sector in India. A 2-member team from National Small Industries Corporation Ltd., (NSIC) visited Korea from September 15 – 26, 2003. Keeping in view the large potential for export of used machinery from Korea, NSIC sought support of Korean exporters for the Used Machinery Expo exhibition being organized by NSIC from February 14 – 18, 2004. Shri Subhashis Sarkar, Deputy Director Geneal (Technology_. De[partment of Posts visited Korea to participate in the Postal Logistics Automation & Information Technology workshop from September 22 – 26, 2003. Shri N.K. Sehgal, Resident Director, ITPO’s Tokyo branch participated in Preview in Seoul exhibition held in Seoul in late September. Trade enquiries During the month of September 2003, 45 trade enquiries from India and 27 local enquiries were received. Replies were sent to all. A list of the local enquiries is enclosed. Trade disputes
During September 2003, three complaints were received from M/s. Easterntex Ltd, M/s. Mi Chang Marine Services and M/s. Technochem Trading Corporation which were attended to promptly. (Balram Phul) First Secretary (E&C) |
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