& COMMERCIAL REPORT FROM PARIS, FRANCE
& COMMERCIAL REPORT FROM DENMARK
3.ECONOMIC & COMMERCIAL REPORT FROM SEOUL
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.
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.
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”.
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.
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
is for your information please.
OF INDIA, PARIS
AND COMMERCIAL NEWSLETTER
the week ending 05.12.2003)
revives Maharashtra plan
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.
enters India via Alstom T&D arm buy
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.
Power to beef up ties with French partner
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.
exports may be hit on new EU rule
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.
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".
restrictions on imported chemicals to hit exporters
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.
Chief Voices Concern About Euro Stability
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.
(The Tocqueville Connection)
COMMERCIAL NEWS –Internal
to demand EDF repay EUR 888 million
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.
new car sales crash in November
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.
devastate South France
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.
Edf Electricity Giant Seeks 15 Percent Of European Market
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
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
COMMERCIAL NEWS –External
wins control of rival Pechiney
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.
Show Opens In Bangladesh To Boost Trade
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.
may buy big chunk of Ssangyong
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.
of the prominent French enquiries are given below:
Hared, Hared International Distributor, e-mail: firstname.lastname@example.org
carpets, clothing, jute é fibres, handicrafts, sports goods,
J.P.S. Saulnier, e-mail:email@example.com
Frédérique Gluckine, La Maison Bleue, e-mail:firstname.lastname@example.org
Jean-Bernard Perrin, Bayard Inter Co, 9-11 rue Benoît Malon,
92156 Suresnes, tel: 00-33-1-126.96.36.199, Fax: 00-33-1-188.8.131.52,e-mail:
Hejinian Simon, Edinri Sarl, 3 rue Poissonnière, 75002 Paris,
tel: 00-33-1-184.108.40.206, Fax:00-33-1-220.127.116.11,e-mail:email@example.com
Société Leda, 24 rue de Cuire, 69004 Lyon, Tel:00-33-18.104.22.168.49?
Fax/ 04.78.27.70.44 e-mail:firstname.lastname@example.org
Boutelant Géraldine, e-mail: email@example.com
Hélène Chung, Cattie Europa, Avenue Del Fener 11, 4-6 Andorra
La Vella , Principat D'Andorra,Tel: 376-80.20.50, Fax:376-80.20.51,
Pascal Mereu, Merlam Distribution, 13 rte de St James, 50170
Pontorson, Tel:00-33-89.04.89, 00-33-89.04.88,e-mail:firstname.lastname@example.org
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)
L. B. Singhal
& ECONOMIC REPORT FOR MONTHS OF OCTOBER & NOVEMBER 2003
Commercial & Economic Developments in Denmark
Surplus on Danish Balance of Payments
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%.
Obtains Ultimate Creditworthiness
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.
Attracts International Head Offices
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
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.
IT Environment Gets Top Marks
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.
Contracts worth Billions up for Grabs
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%.
Bid for Major Danish IT Company
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.
of Danish Industries Establishes Joint Venture in China
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
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.
Defends Dangerous Oil Tankers
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
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.
to Protect German Transport Planes
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
Micon Tunes down Target Result – Future Object of Takeover?
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.
of Denmark Should Endeavour to Increase Danish Imports!
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
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.
Trade between Denmark and Third Countries
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.
Global Danish Imports & Exports
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%.
Indian Exports and Their Variations
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.
Details of Trade Enquiries
Recently received trade enquiries from Danish importers are listed
in Annx IV.
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.
Trade Complaints (from local parties)
None in October 2003.
Visits to Denmark of Commercial Delegations from India
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.
& Commercial report for the month of September 2003
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.
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.
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
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.
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.
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.
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%.
Group to cut affiliates from 59 to 10
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.
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.
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
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.
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.
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.
ITPO’s Tokyo office and this Embassy participated in Korea’s main
textile exhibition Preview in Seoul held in late September.
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
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,
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.
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.
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.