Economic
Outlook
no.1215
February-March 2015
Special Report
www.eulerhermes.com
Global Trade:
What’s cooking?
Introducing twelve countries’ recipes
for boosting exports
Economic Research
Economic Outlook no. 1215 | February-March 2015 | Special Report
Euler Hermes
Contents
Economic Research
Euler Hermes Group
Economic
Outlook
no. 1215
3
EDITORIAL
4
OVERVIEW
12
Recipe #1: Harnessing what nature
gave you
The case of the United States strengthening
the Chemical industry
Special Report
13
14
The Economic Outlook is a monthly
publication released by the Economic
Research Department of Euler Hermes
Group. This publication is for the clients
of Euler Hermes Group and available on
subscription for other businesses and
organizations. Reproduction is authorised,
so long as mention of source is made.
Contact the Economic Research Department
Publication Director and Chief Economist: Ludovic Subran
Macroeconomic Research and Country
Risk: David Semmens (Head), Frédéric
Andrès, Andrew Atkinson, Ana Boata,
Mahamoud Islam, Dan North, Daniela
Ordóñez, Manfred Stamer (Country Economists),
Sector and Insolvency Research:
Maxime Lemerle (Head), Farah Allouche,
Yann Lacroix, Marc Livinec, Didier Moizo
(Sector Advisors)
Support: Lætitia Giordanella (Office Manager), Matthew Anderson, Lukas Boeckelmann, Irène Herlea, Arthur Stalla-Bour
dillon, Sergey Zuev (Research Assistants)
Editor: Martine Benhadj
Graphic Design: Claire Mabille
Photo credit: Allianz, Thinkstock
For further information, contact the
Economic Research Department of
Euler Hermes Group at 1, place des
Saisons 92048 Paris La Défense Cedex
– Tel.: +33 (0) 1 84 11 50 46 – e-mail:
[email protected] > Euler
Hermes Group is a limited company
with a Directoire and Supervisory
Board, with a capital of EUR 14 509 497,
RCS Paris B 388 236 853
Photoengraving: Talesca Imprimeur de
Talents – Permit February-March 2015;
issn 1 162–2 881 ◾ March 03, 2015
2
15
Recipe #2: Aiming at an all-inclusive
service package
The case of the UK exporting Machinery and
Equipment
Recipe #3: Specializing on what people
will always need
The case of France exporting Pharmaceutical
goods
Recipe #4: Banking on quality and
reputation
The case of Germany’s resourceful
Chemical industry
18
Recipe #7: Becoming the factory
country
The case of Poland supplying Automotive
components to Western Europe
19
Recipe #8: Paving the road to frontier
markets
The case of Turkey exporting agro-food
products to high-risk countries
20
Recipe #9: Investing in infrastructure,
hard and soft
The case of United Arab Emirates stretching
its plastics exports
21
Recipe #10: Getting support from the
highest level
The case of China ruling the Household
Electronic Equipment arena
22
Recipe #11: Betting on innovation
The case of Taiwan enhancing the Semiconductors industry
16
Recipe #5: Decelerating wages,
accelerating exports
The case of Spain strengthening the
Automotive sector
23
Recipe #12: Multiplying Free Trade
Agreements
The case of Singapore bridging the
Electronic Equipment divide
17
Recipe #6: Creating global desire
The case of Italy and its fashion-focused
textile genius
24
OUR PUBLICATIONS
26
SUBSIDIARIES
Euler Hermes
Economic Outlook no. 1215 | February-March 2015 | Special Report
EDITORIAL
Appetite comes with eating
LUDOVIC SUBRAN
Like a cyclist against the wind, global trade has been fighting
an uphill battle. Yes, the outlook does look better overall and
trade-gnation sounds like old news, but competition is fierce.
Trade is like a marathon; there are front runners and laggards,
hungry competitors, those who burn out and those who fade
away. Will eager nations catch up? Will outsiders once again
change the rules of the game? To answer these questions,
we opened the lid and looked at what is cookin’ in the global
trade pan. If you want to win the race, you need to train hard,
eat well, use good ingredients and avoid saturated fats and
fish bones. Like a good life coach, we went around shopping
for new restaurants for you; we also selected those with an
appetite for tomorrow’s trade pie – so that you could not
say you did not know. In addition, we identified twelve recipes
for success from countries around the world. It is true that
protectionism, financing risks and deflationary trends will
continue to be a set menu for those who venture themselves
in conquering the world. However, we are confident that
you can choose your à la carte strategy- but what’s on offer?
For new trade routes, our fifteen delicacies are those countries where you want to increase your exports. Solid reputation makes a big difference once they have unleashed domestic demand. As for new export players, the gluttons and
the hungry are stepping up their game. They actively use
trade policies and tools. They were a good source of inspiration to come up with twelve methods for an export boost.
Creating global desire like Italy, multiplying partnerships like
Singapore or investing in soft and hard infrastructure like
the UAE are as many of the success stories we wanted to tell
you over dinner. Exporting is easier said than done: finding
new clients, adapting to their needs, fighting red tape and
language barriers are important challenges for small and
medium enterprises. The risk often seems higher than the
reward but preparation does make the difference. For policy-makers, the task is not easy: they can offer their support
but they cannot do it for you. Additionally in times of diet,
they often focus on reducing imports than raising exports
value. In the end, if there is one crucial message for those
out there who do not know yet if they should try their luck:
Exporting goods is importing innovation. By going after new
untapped customers out there, you will evolve your products
to add quality and service. You just have to take a first bite,
and yes you may find it is too spicy once in a while (for us it
often means not getting paid!) but once you've finished your
plate you may end up eating your competitors'.
3
Economic Outlook no. 1215 | February-March 2015 | Special Report
Euler Hermes
OVERVIEW
Global trade: What’s cooking?
Introducing twelve countries’ recipes for boosting exports
Nominal trade to grow by
Globally, the economy is in tradegnation an unfortunate state
which combines weak trade
growth and anemic price pressures. This has been brought about
as a knock-on-effect from the stagnation in economic growth seen
since the Great Recession. This
matters greatly for corporate revenues, but also as an indicator of
the remaining excess capacity that
exists globally. 2015 and 2016
should bring better news, with
some countries and companies
continuing to benefit from global
trade while others looking increasingly isolated. Who will win and
who will lose? How will trade
routes evolve? What lies ahead in
terms of risks and opportunities?
Dinner is served!
+1.8%
in 2015
and
+4.5%
in 2016
How fast is the pie growing?
Structurally slower activity and lower or negative
trade price inflation means that in nominal
terms we look for trade growth in the medium
term, 3-5 years, at around half the +12% seen
between 2001 and 2008. However, the current
situation is more anemic, with nominal international trade growth dire compared to prior
World trade growth
Volume and value
5%
forecasts
4%
3%
2%
1%
0%
-1%
Volume
-2%
-3%
Deflator
12
13
14
Sources: CHELEM, Euler Hermes forecasts
4
15
16
Value
levels, at a mere +1.9% in 2014 and forecast to
grow by +1.8% and +4.5% in 2015 and 2016,
respectively. Similarly, in real terms, world trade
(goods and services) increased by an annual average of around +6% between 2001 and 2008.
It grew by +3.3% in 2014 and is forecast to increase by +4.0% in 2015 and 4.5% in 2016. To
put this in context, between 2012 and 2014 negative price pressure resulted in a loss in nominal
trade of USD826 bn or 4% of the USD23,590 bn
worth of nominal trade that Euler Hermes estimates for 2014. However, greater negative price
pressure seen in 2015, primarily due to limited
growth in demand, lower energy prices and excess capacity will result in USD560 bn worth of
drag on nominal trade.
There are three key factors driving this global
trade-gnation. Firstly, global austerity has decreased public spending, historically a significant
component of growth globally and particularly
during times of weak demand. Secondly, the
amount of exports and imports has declined
which, given the inter-related nature of global
exports, has a significant multiplier effect on the
supply-chain and overall activity. These second
Euler Hermes
Economic Outlook no. 1215 | February-March 2015 | Special Report
Imports generated by the 10
biggest importers will
account for over
round effects impact by lowering global growth
further and subsequently weaken trade, which
weakens growth and so on. Thirdly and finally,
private consumption and investment, the main
engines of present growth and future growth
potential, respectively, are seeing tepid growth
at best. This lack of private demand is explained
by limited improvement in household’s fundamentals in advanced economies (high unemployment rate in core Eurozone countries; weak
wage increases both real and nominal in Japan)
and elevated saving rates in key emerging markets such as China; ongoing financing constraints in large emerging markets such as Brazil
and Indonesia; and difficult political environment in the Russian sphere. Ultimately, global
trade is not driving global GDP anymore; it is
merely accompanying it, increasing the need
for countries to focus on boosting their own domestic demand with a greater internal focus,
while at the same time boosting exports. The
mathematical impossibility of everyone increasing exports and raising imports, without the colonization of Mars, unfortunately remains certain.
Nutritious imports: Where
to export in 2015-16?
Despite growth at a slower pace, the worldwide
appetite for imports continues its trend upwards. In terms of where demand will be coming from, you have the usual suspects and some
surprises. Size does matter. Even if some of the
big importers want to diet, it is still the traditional
big spenders who will continue to drive import
gains.
The U.S. will be the hungriest world market in
2015-2016 with +USD210 bn cumulated additional imports. The gradual normalization of the
Fed’s monetary policy will help to maintain a
strong USD against main other currencies, supporting U.S. importers’ purchasing power. China
should follow closely, with +USD200 bn expected additional imports over 2015-2016, despite the slight slowdown in real import growth
due to the ongoing economic model transformation.
Import gains will be driven by demand-supportive policies in Germany (i.e. establishment of a
minimum wage), and loose monetary policies
60% of
total
cumulated nominal import
gains in 2015-2016.
▶
5
Economic Outlook no. 1215 | February-March 2015 | Special Report
Euler Hermes
Importer cluster by risk and growth in demand
< 3%
3% — 4.5%
> 4.5%
Higher risk
Euler Hermes adapted country risk categories
Lower risk
Real imports growth over 2015-2016 (yearly average, %)
The Carbs
The Good Calories
The 15 Delicacies
Canada
Chile
Austria
Norway
Switzerland
Saudi Arabia
Australia
New Zealand
United States
Peru
Belgium
Denmark
France
Germany
Ireland
Netherlands
Portugal
Spain
United Kingdom
Israel
Morocco
Japan
Singapore
Colombia
Mexico
Uruguay
Estonia
Latvia
Poland
Slovakia
United Arab Emirates
South Africa
China
Hong Kong
India
Malaysia
South Korea
Taiwan
With Moderation
Set Menu
Sweet & Sour
Paraguay
Cyprus
Finland
Italy
Cameroon
Ecuador
Bulgaria
Hungary
Turkey
Tunisia
Thailand
Turkey
Brazil
Czech Republic
Lithuania
Romania
Kenya
Indonesia
Philippines
Vietnam
Junk Food
Heartburn Risk
Spicy
Argentina
Venezuela
Russia
Ukraine
Croatia
Slovenia
Gabon
Nigeria
Algeria
Greece
Iceland
Egypt
Bangladesh
Pakistan
Sri Lanka
Source: Euler Hermes
▶
Top 10 importers
Additional imports, in USD bn
United States
210
China
201
Germany
66
India
63
Japan
60
United Kingdom
Mexico
France
51
40
37
South Korea
32
Hong Kong
30
Source: Euler Hermes forecasts
6
2015
2016
in Japan, South Korea and the United Kingdom
that encourage household consumption and investment. British imports will also rise due to
GBP’s appreciation against the EUR. In India, the
recovery of domestic demand (after two gloomy
years) will be the main supporter of imports,
while Hong Kong will continue to benefit from
its position of regional trade hub. As Mexico is
consolidating its leadership as the largest Latin
American exporter, its imports will be stimulated
by export-oriented industrial sectors, as the content of exports in imported goods is strong. Finally, France, which is still coping with competitiveness issues, will retain their penchant for
imported goods in 2015-16.
While the behemoths of global imports continue to hold the largest appetites, dynamic and
growing countries are also ravenous. Indeed,
when looking where the demand will come
from, it is also necessary to look at the growth
pace of imports, and not only the amounts. The
most profitable countries to enter into a long
term business relationship with are not only
those entering a growth spurt, but ones that
benefit also from strong fundamentals and
sound business environment. The selection
process remains critical. We established a typology of countries based on real imports
growth over 2015-2016 (how hungry they are)
and our in-house country risk methodology
(how healthy they are). We found nine different
groups from The Carbs to the Spicy ones to Euler
Hermes’ Fifteen Delicacies.
Among this promising group – real import
growth above global average and low country
risk – we find both large and small countries.
Euler Hermes
Economic Outlook no. 1215 | February-March 2015 | Special Report
From 2009 to 2012, China
increased its market share of
high technology products by
China, India, and to a lesser extent Mexico and
South Korea, not only benefit from their market
size but will deliver strong import increases over
2015-2016. Among smaller importers, Colombia, Taiwan, Malaysia, South Africa, the UAE and
several Eastern European countries promise to
demand more space at the table in the coming
two years.
4pps
Exporting à la carte: Moving
up the value chain is Asia’s
next course
Cutting costs vs. raising quality is the wrong
dilemma. When prices decrease, companies
usually have use a mix of both options to ensure
stable profits. The first one is to decrease pro-
Change in market share* of high technology
products
From 2009 to 2012
China
Taiwan
Singapore
Malaysia
Switzerland
Mexico
Philippines
Italy
Thailand
Sweden
South Korea
Hungary
Canada
Japan
France
Germany
United Kingdom
Ireland
The Netherlands
Belgium
United States
4.0%
0.5%
0.4%
0.2%
0.1%
0.1%
0%
-0.1%
-0.1%
-0.2%
-0.3%
-0.3%
-0.3%
-0.3%
-0.4%
-0.5%
-0.6%
-0.7%
-0.7%
-0.7%
-0.9%
*share in global exports
Sources: CHELEM, Euler Hermes
duction costs. The second one is to improve
product quality, creating a more differentiated
product and giving more pricing power. The latter strategy is more expensive, takes time to
bear fruit but is more powerful as it allows companies to be less sensitive to external shocks, as
it enhances productivity and future profitability.
At a country level, mechanisms are more complex as the focus is on economic development
(and not about increasing profitability) but the
reasoning can be similar. Countries at an early
stage of development can afford a low cost strategy for the first phase of their expansion. This is
particularly true for those following an exportled growth model. That was the case of China
which has benefitted from a strong rise in exports in the 2000’s thanks to the favorable combination of limited wage growth and an undervalued exchange rate. Now the baton has been
passed to Vietnam, Cambodia and Bangladesh
which are seeing strong development in their
manufacturing sector. However, when
economies catch up, unit labor costs tend to
rise due to wage increases, price competitiveness deteriorates and finding other ways to keep
growth on a firm pace becomes important. Upgrading product quality is the most reliable longterm strategy to follow. This can be done
through efforts in innovation (the U.S., Taiwan,
Japan and Germany), branding and high standards production (France, Italy), but also thanks
to an upgrade of the production process (China,
Malaysia).
▶
7
Economic Outlook no. 1215 | February-March 2015 | Special Report
Euler Hermes
TWELVE EXPORT RECIPES YOU CANNOT
MISS!
Recipe #1: Harnessing what nature gave you
Recipe #2: Aiming at an all-inclusive service package
Recipe #3: Specializing on what people will always need
Recipe #4: Banking on quality and reputation
Recipe #5: Decelerating wages, accelerating exports
Recipe #6: Creating global desire
Recipe #7: Becoming the factory country
Recipe #8: Paving the road to frontier markets
Recipe #9: Investing in infrastructure, hard and soft
Recipe #10: Getting support from the highest level
Recipe #11: Betting on innovation
Recipe #12: Multiplying Free Trade Agreements
▶
The fierce price competition for lower-value
products has pushed emerging markets away
from raw (primary) products exports to more
sophisticated exports (intermediate, equipment
or consumption goods) bringing more value
added. In Latin America, Mexico continues to
diversify its exports structure relying on intermediate goods (vehicle components) and
equipment goods (commercial vehicles). In
Emerging Europe, Poland and Turkey are becoming the workshop of Europe. Asia is the region the most involved in this Value-added war
with strong key players exporting intermediate
and equipment goods especially: China, The
Tigers (Singapore, Hong Kong, Taiwan, and
South Korea) and The Cubs (Malaysia, Philippines, Vietnam).
Against this background, global trade is set to
be more segmented with emerging countries
being more involved in global trade and advanced economies implementing new strategies
aimed at preserving their market share. Emerging Asia will likely be at the forefront of the electronics industry, combining manufacturing centers (China, Vietnam) and High Tech ones
(Taiwan, South Korea, Japan and Singapore).
Mexico and Poland are also likely to join the
game benefitting from knowledge and capital
transfer in the automotive markets, from their
core outlets (the U.S. and the EU respectively).
This fierce competition requires countries to
show strong export-oriented strategies. In the
report, we look at twelve export recipes that
have worked for countries around the world
from Turkey to Singapore to the UAE, as demonstrated in their key industries. Using part or all
of them can be a game-changer for companies
located in these countries.
8
Who will be the cooks in the
export kitchen?
In 2015, Asia will likely be the main export winner totaling USD221 bn exports gains. Western
Europe (+USD134 bn) and North America are
coming just after (+USD78 bn). Eastern European countries, Middle East and Africa are the
losers (-USD102 bn) affected by falling commodity prices and unfavorable currency development against USD.
The majority of goods exports gains will be
recorded in China, the United States, Germany,
Japan and South Korea as these countries continue to benefit from strong pricing power and
from their size as major suppliers. Large trade
(Hong Kong, Singapore), innovation (Taiwan)
and production (Mexico) hubs are also in our
top 10 countries when it comes to export gains.
If we take the top 50, it is important to separate
those with size (export gains in value over 2015
and 2016; cut-off at USD20 bn) from those with
pace (under- or over-performing in real export
growth compared to world average in 2015-16:
4.25% per year). We therefore defined an exporters’ typology with four groups: The Gluttons
(high gains and high growth in exports), the
Gourmets (high gains due to their size but
slower pace of export growth), the Hungry (low
gains but catching up), and the Dieting (low
gains, low growth).
In the Gluttons category, on top of the usual suspects, we find countries like Vietnam, Canada
and Spain, major players today and tomorrow
in world exports.
Countries like France, Germany, Italy and the
United Kingdom are our Gourmets, with rising
exports gains in nominal terms due to their size,
but with limited growth in real terms (below
world average). They are perhaps too limited in
sectors and destinations (often restricted to
neighbors) or too expensive to grow outside
their comfort zone.
The Hungry are the fast-growing ASEAN countries
(Malaysia, Indonesia, and the Philippines), South
Asian factory countries (Bangladesh) and countries linked to the European value chain - such as
Romania (+5.5% and +USD4.7 bn), providing
Western Europe with machinery and equipment
and agrifood products or Morocco. These countries usually do not have gigantic exports market
shares but their exports are catching up fast.
South Africa is a good example of a Hungry, with
+4.6% of real export growth on average in 201516 and +USD3 bn of export gains. The negative
shock in the price of commodities cannot be offset with a limited manufacturing base and services that are developing in a limited catchment’s
area (Sub-Saharan Africa). 2016 will be pivotal.
Finally, the countries that will underperform (limited exports gains and growth below average)
▶
The value of global vehicle exports
to increase by
USD67 bn
in 2015
and
USD75 bn
in 2016
Euler Hermes
Economic Outlook no. 1215 | February-March 2015 | Special Report
World trade gains
Top 10 Export winners
USD bn
Aditionnal exports in USD bn
Energy -400
China
29
78
89
Agrifood
Textile
46
53
38
43
Wood Paper
126
142
71
Hong Kong
Machinery
42
France
40
Taiwan
35
Singapore
34
44
50
109
124
Electronic
48
Mexico
67
75
Vehicles
2015
75
South Korea
106
120
Electric
112
Japan
34
39
28
31
Non-ferrous
162
Germany
Chemical
Ferrous
251
United States
2015
2016
2016
Source: Euler Hermes forecasts
Source: Euler Hermes
Main global exporters: Exports performance over 2015-2016
China (5,8%; 251bn)
Gourmets
Gluttons
U.S. (4,6%; 162bn)
Germany (4,1%; 112bn)
•••
Japan
(5,3%; 75bn)
South Korea
(5,5%; 71bn)
Nominal export gains in 2015 and 2016 (cumulative, USD bn)
50
Hong Kong
Mexico
40
France
Taiwan
Singapore
Switzerland
(0,2%; 32bn)
The Netherlands
India
30
Vietnam
(8,5%; 32bn)
Spain
Italy
Canada
United Kingdom
0%
1%
•••
2%
3%
Poland
Belgium
Brazil
5%
6%
8.5%
8%
Czech Republic
10
Turkey
Austria
Dieting
7%
Indonesia
Thailand
Ireland
•••
20
4%
Israel
Hungary
South Slovakia
Chile
Africa
Pakistan
Portugal
United Arab Emirates
Denmark
Malaysia
Sweden
Morocco
Bulgaria
Peru Slovenia
Cote d'Ivoire
Nigeria
0
Colombia
Philippines
Romania
Bolivia
Bangladesh
Sri Lanka
Hungry
Real exports growth over 2015 and 2016 (average per year)
Source: Euler Hermes
9
Economic Outlook no. 1215 | February-March 2015 | Special Report
will mainly be large Latin American countries
such as Brazil and Chile and European countries
(Portugal, Hungary) suffering from falling commodity prices and lack of competitiveness. We
call them Dieting. Portugal (+4.2% and +USD5
bn) is borderline for us as it is catching up fast
and could become Hungry, if it manages to revive
the range of goods it exports and fight back the
cannibalistic competitiveness of countries around
such as Spain.
Sector-wise, the biggest loser of 2015 will be the
energy sector (-USD400 bn in 2015 alone).
Among the winners, we find: (i) the chemical
sector (+USD125 bn in 2015 and +USD145 bn
in 2016) benefitting from the recovery of the
manufacturing sector and the reduced energy
costs; (ii) the electronic sector (+USD233 bn over
2015-16) supported notably by rising demand
in Asia; and (iii) the machinery sector (+USD227
bn) driven by robust demand for capital goods
from industrializing countries and outsourcing
from advanced economies to low-cost areas.
Set risk menu: Price war to
start, politics for the main
course and payment for
desert
Exporting is not risk free. There are three hazards
to watch out for in 2015: Prices, Protectionism
and non-Payment.
No tip included
There are two reasons to believe that deflationary pressures will continue to affect exports
growth. First, the declining trend in major commodity prices worldwide; second the ongoing
price competition to get new outlets when demand and purchasing power are sluggish.
Capacity utilization*, inflation rate* and exports**
*2014 vs 2000-07 average; **2013, % of GDP
Russia
6%
4%
2%
Capacity gap
▶
Euler Hermes
Mexico
Brazil
U.S.
0%
Germany
-2%
Turkey
Chile
Euler Hermes anticipates that oil prices have
bottomed out and will rise gradually going forward. With no change in sight for structural determinants – weaker Chinese demand, higher
supply from shale production and a reluctance
of OPEC to cut quotas – it will be the short-term
ones (geopolitics and financing) which could
support a gradual increase by end of 2016 (forecast at USD84/barrel). Oil is not the sole commodity whose prices are on a downward trend:
Food prices have been weakening since 2011
(FAO index -12%), hampered by the lower than
recent trend growth of the major agriculturebased economies (Brazil, China and Russia).
Services are not spared from rapidly declining
prices, the hardest blow occurring in the transport of goods. Maritime transport rates have
also plummeted in a similar fashion. The Baltic
Dry Index (reference index aggregating prices
for twenty shipping routes) has reached its lowest level in 30 years amid oversupply (number
of active vessels) and lower (Chinese) demand.
Though lower raw material prices result in a
lower value of end-products – and likely revenues, businesses should still realize higher operating margins. Depending on their pricing
power, companies may have to incorporate
some or none of these savings into the end sale
price to at least save market share. This is the
deflationary vicious circle, threatening long-term
global trade growth. This phenomenon is not
limited to the Western world: In Asia, this trend
can be seen in producer prices. In the long-run,
intensifying deflationary pressures may have
Italy
-4%
-6%
-6%
Spain
In Asia, producer prices in main trade
hubs have been declining
-4%
-2%
Inflation gap
NB: The size of the bubble represents exports to GDP
Sources: National sources, Euler Hermes
10
0%
2%
4%
-2% and -4%
over the past months
Euler Hermes
Economic Outlook no. 1215 | February-March 2015 | Special Report
Number of protectionist measures
2014
4,000
+37
+8
+11
+37
Turkey raised its customs duties
for footwear products to
+47
3,750
+55
+44
+45
+65
+60
3,500
+57
50%
in 2014
+124
3,250
3,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sources: Global Trade Alert
prejudicial consequences in industries’ valuechain (financial difficulties), eventually limiting
investments and productivity.
The top 25 world food retailers are a prime example of this very issue, with an average revenue
growth of +1.6% in 2010-13, compared with
+7.8% in 2007-10. Fierce competition for prices
has caused operating margin erosion and weakened financial strength. The ultimate risk of such
a scenario is consumer prices falling so low it is
no longer profitable to sell. Oligopolies and disruptive transformation (e-commerce) add a systemic risk in the value-chain. In France, the food
distribution sector is, for half of it with a handful
of gigantic players. Limited pricing power means
limited negotiating power for suppliers.
The risks of eating alone
Since the early 1990s, accelerated globalization
and Free Trade Agreements (FTAs) have helped
boost trade. Several new super agreements are
being negotiated such as the Transatlantic Trade
and Investment Partnership (TTIP) between the
EU and the U.S., the Trans Pacific Partnership
(TPP) between the two sides of the Pacific Ocean,
and the Regional Comprehensive Economic Partnership (RCEP) between ASEAN and several
neighboring countries including China, India and
Japan. These three FTAs alone would cover
around 80% of global GDP, hence it is expected
that they will be game-changers. According to
the Center for Economic Policy and Research estimates that the TTIP could increase bilateral
trade between the EU and the U.S. by up to
USD270 annually until 2027 depending on the
final agreement. The devil lies in the detail.
However, despite ongoing negotiations, the general trend of accelerating globalization was disrupted by the 2009 global financial crisis, which
exposed the risks related to interdependence for
goods and financing flows. Moreover, many
emerging markets are now facing a period of
less buoyant growth than before the global crisis.
An annual survey on potentially trade-restrictive
measures by the European Commission detected
170 new measures in the period from June 2013
to June 2014, reflecting an ongoing uptrend since
2008. At first sight, the proliferation of tariff barriers remains the most striking phenomenon.
For example, Turkey raised its customs duties for
footwear products to 50% in August 2014 while
Argentina extended exemptions from the Mercosur agreement in January 2014, resulting in
import duties of up to 35% for products such as
sparkling wines or molds for metal-injection.
A closer look, however, shows that non-tariff
barriers are becoming increasingly important
and can be an effective trade-restrictive policy
environment. In particular, national standards
with regard to product quality, security, food
safety or environment protection – although
sometimes reasonable – are often applied to
protect national producers in domestic markets.
For example, Russia restricted the import of certain meat and agricultural products from the
EU, based on health considerations, back in January 2014 (before the conflict with the West
erupted). Also, standards have become an issue
in the TTIP negotiations and may lead to a dilution of benefits. Last, politically-motivated sanctions constraining trade have regained popularity in recent years – Iran and Russia are
well-known examples – although history has
shown that such measures are usually ineffective in reaching the intended political targets.
margins, a usual cash cow for financial institutions. Low energy prices are also lubricating
global trade by providing an income boost to
energy importing countries. But there are risks.
First, the U.S. Fed is poised to start increasing
interest rates while major Central Banks are
moving to more accommodative monetary policies. As a result, the USD has gained +12% in
the past six months and the expected increase
in interest rates will only make the USD more
desirable. This could lead to an increase in demand for USD, which could tighten liquidity and
drive up financing costs. A reduction in USD liquidity could promote the use of alternative currencies for trade such as the Chinese Renminbi
(RMB); which became the world’s second most
used currency for trade finance in 2013 with a
9% global share (the Euro only represents 6%).
In the meantime, currency risks and localized
credit crunches could hamper trade recovery.
The problem is not limited to trade financing
in one or another currency. Payment delays
as measured by a rise in days sales outstanding (DSO), have worsened worldwide in
2014. As a result, global trade is slowed
down. More trading on open account compared to payment in advance or other methods could be a welcome boost for global
trade, especially to and from regions less integrated globally such as Sub-Saharan Africa.
In Europe, Italy is a good example where a
credit crunch from traditional loans and
short-term financing is in part compensated
by longer-than-average DSOs, in spite of a
liquid Euro and a sound banking system. In
China – also plagued with shadow banking,
Brazil, India, and Saudi Arabia for instance,
not only payment terms are high, they have
increased over the past years to offset limited
traditional financing: suppliers are financing
part of the regional trade. ◾
Days Sales Outstanding* (DSO)
Number of days
Who gets the check?
Current trade flows are facilitated by ample liquidity of US dollars (USD), by far the preferred
currency for international transactions - 81% of
all trades involve a USD component. However,
the additional liquidity flows have seen significant downward pressure on trade financing
The Netherlands
The USD gained
Turkey
+12%
Spain
2013
U.S.
2014
United Kingdom
Russia
Germany
Belgium
Poland
Saudi Arabia
Brazil
in the second half of 2014
China
Italy
0
20
40
60
80
100
* Listed companies
Sources: Bloomberg, Euler Hermes
11
120
Economic Outlook no. 1215 | February-March 2015 | Special Report
Euler Hermes
Recipe#1: Harnessing
what nature gave you
+USD15 bn
of export gains of U.S.
Chemical sector
in 2015
The case of the United States
strengthening the Chemical industry
2015 Export gains -Top 5 sectors
MARC LIVINEC, DAN NORTH
in USD bn
15.2
Chemical
SIMILAR
OTHER EXPORT
COUNTRIES
STRATEGIES
13.8
Machinery
UNITED STATES
▶ BRAZIL
▶ FRANCE
The U.S. is going to achieve autonomy as an
energy producer
A cheaper domestic supply of energy has given
the U.S. industrial base an undeniable advantage
that has led to increased investment flows and
hiring. After the shale gas revolution that started
back in 2009, the U.S. is now taking advantage
of its tight oil resources. This boon has resulted
in U.S. oil imports falling off nearly -30% since
its 2007 peak. However, the U.S. is very likely to
remain a net importer of crude oil in the short
run despite the fact that the U.S. exports plenty
of other energy abroad in the form of coal and
refined products such as diesel, gasoline and
kerosene. That is why we expect the U.S. to
record first export losses of USD5 bn in energy
in 2015 before more than making them up for
reaping exports gains of USD8 bn in 2016.
12
9.6
Agrifood
8.7
Electronic
Vehicles
6.6
Sources: CHELEM, Euler Hermes forecasts
Chemical sector to be largest beneficiary
The underlying strategy of sectors that are heavy
users of energy remains unchanged in the U.S.
and is based on the advantages of both cheap
gas and oil. The chemical industry is a primary
beneficiary of this situation, recording exports
of USD189 bn in 2013 and more than USD190
bn in 2014, accounting for around 12 % of total
U.S. exports. The U.S. is now closer to becoming
the most competitive source of chemical production in the Americas and may achieve this in
the next decade. Whereas (petro) chemical raw
materials shared the same costs of production
in Europe and in the U.S. in 2005 except for differences in their tax policies, that is no longer
the case with falling U.S. gas prices from 2010.
Indeed, compounded by falling oil prices, the
costs of chemical production are now around
four times cheaper in the U.S. than in Europe.
Rapid growth for chemicals and all manufacturing
The growing autonomy of U.S. energy supplies
has gained more importance as it is a foundation
spurring a reindustrialization in the economy.
In bulk chemical products, the prices of gas (as
an energy source) and refined oil (its major
feedstock) account for up to 75% of the global
cost. Clearly, low oil and gas prices are currently
favourable for the U.S. chemical sector. As a result, for two years, U.S. chemical companies
have been able to increase hiring, which has
not been the case since 1999. Moreover, approximately USD150 bn has been invested in
new chemical capacity, including ethylene-production plants, which are key for the plastics
sector. Out of the 58 mn tons of new ethylene
supply planned to be commercialized in the
current decade, more than 20% of it is for the
domestic market, which accounted for only 2%
of supply between 2000 and 2010. Cheap energy costs in the U.S. therefore underpin the
chemical industry’s forecast of +USD15 bn in
2015 exports, and an annual average growth of
+8 % for exports through 2020.
Euler Hermes
Economic Outlook no. 1215 | February-March 2015 | Special Report
Recipe#2: Aiming at an allinclusive service package
The case of the United Kingdom exporting
Machinery and equipment
Machinery export gains to reach
+GBP1.3 bn
20% of total gains
in 2015
ANA BOATA
SIMILAR EXPORT
STRATEGIES
▶ IRELAND
Service 1: A competitive regulatory framework
The government has set a formal goal of doubling exports by 2020, to GBP1,000 bn and rebalancing the economy towards higher levels of
investment. There is a time-critical opportunity
to capitalize on the UK’s existing comparative
advantages of low product market regulation,
highly supportive regulatory and institutional environment for businesses compared with the
rest of the G20. Labor market flexibility, especially
the “zero hours contract”, and relatively low manufacturing labor costs are further key advantages.
Service 2: Public and financial support
The government is also encouraging investment
in creative industries (GBP71 bn) and infrastructure (National Infrastructure Plan, GBP55 bn in
2015-16) to reduce regional imbalances. Further
incentives for companies to (re)locate in the UK
are being provided and fiscal incentives - corporate tax (20% in April 2015 compared with
30% in 2006 and 28% in 2010), the lowest within
the G20 - are expected to boost long-term investment. Moreover, to help UK exporters, the
government has significantly increased support
to businesses: (i) the UK Trade and Investment
(UKTI) doubled its support in 2014 (to 40,000
businesses); (ii) established the UK Export Finance (UKEF) for cheap financing to exporting
companies (for as much as GBP50 bn, 10% of
total exports) and (iii) launched the Funding for
Lending Scheme in 2012 and re-focused it on
business lending in 2013, particularly to SMEs
which has ensured relatively stable rates allowing a more certain environment for demand to
grow in.
Strong link with emerging countries boosting machinery exports
The United Kingdom is a well-diversified economy in terms of export destinations, with a
strong anchor in Europe (EU), Asia (India, Hong
Kong especially) and Africa (South Africa) due
to historical links. Against this background, the
government has set a public strategy to increase
its exposure to emerging countries: total exports
to emerging markets almost doubled between
2006 and 2013 with the share reaching 27% of
total exports. The largest increases among the
EM markets were China (+2pp to 3.3% of total
UK exports), UAE (+1.3pp to 2.8%), Hong-Kong
(+1.4pp to 2.6%), Russia (+0.7pp to 1.5%), India
(+0.4pp to 1.5%), South Korea (+0.7pp to 1.4%)
and Saudi Arabia (+0.5pp to 1.2%). This per-
formance has allowed an improvement in machinery exports. Assuming that these countries
will continue to show a robust demand for capital goods, we expect additional exports in machinery goods to reach +GBP1.3 bn in 2015,
representing 20% of total exports gains.
2015 Export gains -Top 5 sectors
in GBP bn
1.6
Chemical
1.3
Machinery
Vehicles
Electronic
Agrifood
0.8
0.7
0.6
Sources: CHELEM, Euler Hermes forecasts
13
Economic Outlook no. 1215 | February-March 2015 | Special Report
Euler Hermes
Recipe#3: Specializing on
what people will always need
The case of France exporting Pharmaceutical
goods
Export gains of France
Pharmaceutical products
in 2015
FRÉDÉRIC ANDRES, MARC LIVINEC
SIMILAR EXPORT
STRATEGIES
ment is committed to curtailing its health insurance scheme deficit thanks to bigger healthcare savings. As a result, we estimate pharmaceutical groups’ revenues should go down -3%
for 2014 as a whole in France; and this pattern
might continue.
▶ BRAZIL
The French pharmaceutical industry: dwindling momentum at home?
Contrary to the overall industrial sector where
employment has fallen by more than 20% since
2000, the French drugs industry has “only” seen
employment fall -3%. It is also very profitable,
with profit margins about twice as high as the
overall manufacturing sector. However, it is facing hurdles in the domestic market, as evidenced by falling drugs consumption from the
public sector and households over the past two
years (-1.3% and -2.4% respectively). Even with
the expected slight rebound of private consumption to +1%, the overall consumption backdrop will not improve significantly, especially
for drug expenditures, as the French govern-
Employment in Manufacturing
and Pharmaceutical industry
Basis 100=2000
Employment,
Manufacturing
115
Employment,
Pharmaceutical Industry
110
105
100
95
90
85
80
75
70
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Sources: INSEE, Euler Hermes
14
+EUR1.2 bn
Can the export engine pick up pace again …
Given the domestic situation, top drug makers
are understandably dedicated to spreading their
outlets abroad. SANOFI, the largest French drug
maker (and the 5th largest in the world), helps
play an active role in the process as its market
share is increasing quickly in emerging countries. The sector is usually among the best-performing exporting sectors, with around EUR29.6
bn in drugs exports in 2013 and EUR28 bn in
2014 and a large EUR4.6 bn surplus in 2014.
2014 figures were a bit disappointing, primarily
on the back of higher imports of expensive Hepatitis C vaccines. Morover, exports fell -5% in
2014, following +2.5% in 2013 and +4% on average over the past 10 years. Too few fiscal in-
centives may explain this as French drug makers
pharmaceutical firms face an overall taxation
20% higher than that in Italy and 60% compared
with the UK. This is problematic because pharmaceutical firms are committed to spending almost 15 % of their revenues on R&D investment
for pipeline renewals.
… given that competition from abroad is
not twiddling its thumbs
Assuming that French pharma firms will
strengthen their competitiveness by making
R&D investments more efficient, we expect +1.2
bn additional export for the sector. In 2014, a
significant EUR800 mn was invested in the 220
French pharmaceutical plants. Furthermore, out
of a hundred new molecules approved in Europe
over the last three years, only ten have been
manufactured in France. It stems from the disappointing results of French biotechnological
entities, despite SANOFI’s global leadership in
vaccines and more external growth through
biotech buyouts.
Euler Hermes
Economic Outlook no. 1215 | February-March 2015 | Special Report
Recipe#4: Banking on
quality and reputation
The case of Germany’s resourceful
Chemical industry
MARC LIVINEC, LUKAS BOECKELMANN
SIMILAR EXPORT
STRATEGIES
▶ JAPAN
▶ SOUTH KOREA
The German export machine
With export gains of +EUR36 bn in 2015 and
+EUR62 bn in 2016, Germany will defend its
rank as the third largest global exporter, despite
headwinds from geopolitical hotspots and sluggish growth in the Eurozone, the country’s main
export destination. Key to Germany’s export success is a focus on the upper segment of
medium-high tech industries. The leading sectors (machinery, chemicals and vehicles) are
likely to see exports rise by +EUR60 bn in 2015
and 2016 (cumulative), the lion’s share of German export growth. The specialization on an
innovative premium segment, combined with
a well-developed export network (in the form
of chambers of commerce), positions German
products favorably in terms of gaining market
share in emerging economies. Moreover, German goods benefit from competitive labor costs,
with these stagnating between 2000 and 2011.
However, this competitive edge is eroding
slowly; from 2010 to 2014 hourly earnings in
manufacturing increased by 5pps faster in Germany than in the U.S. and Japan, the country’s
main competitors for high value-added goods,
and this trend is expected to continue in 2015.
The German chemical sector has to cope
with the rising cost of electricity
One concern for Germany’s chemical sector,
however, is rising energy costs, largely as a result
of the country’s decision in 2012 to phase out
nuclear power prematurely. This government
decision increased electricity costs for chemical
companies, which are now double those across
the Atlantic. It would be unfortunate for Europe’s
largest economy if this rising cost gap eventually
compels some German chemical plants to be
outsourced in the U.S. where almost EUR8 bn
have already been invested in new facilities in
the past three years.
2015 Export gains - Top 3 sectors
by destination
in EUR bn
Machinery
}
+USD19 bn
9.3
Chemical
68 % of export gains
Trade balance in chemicals remains positive
With a turnover of EUR143 bn last year, the German chemical industry ranked fourth in chemical production worldwide. Companies have
been coping with foreign competition, which is
benefiting from cheaper access to energy. While
lower production costs for chemicals in the U.S.
and in Asia may have affected Germany’s export
market share to some extent, its chemical sector
still recorded a trade surplus of EUR53 bn last
year. A key reason for this is its high-end positioning resulting from the quality of its R&D and
after-sales services. Moreover, the sector has
taken advantage of the very strong integration
of its production facilities that enables recycling
of by-products to be profitable instead of being
a source of additional costs. Euler Hermes expects the German chemical sector will gain
around +EUR8 bn in additional exports in 2015,
and +EUR11 bn in 2016.
7.8
Vehicles
7.4
0
5
10
Europe
North America
Latin America
Cumulative export gains of
German Chemicals sector
in 2015-2016
Africa & Middle East
Asia
Other
15
Sources: CHELEM, Euler Hermes forecasts
15
Economic Outlook no. 1215 | February-March 2015 | Special Report
Euler Hermes
Recipe#5: Decelerating
wages, accelerating exports
The case of Spain strengthening the
Automotive sector
2015 Export gains -Top 5 sectors by destination
in EUR bn
Vehicles
3.2
2.7
Agrifood
Europe
DANIELA ORDÓÑEZ, YANN LACROIX
Chemical
2.5
North America
Latin America
SIMILAR EXPORT
STRATEGIES
Machinery
2.0
Africa & Middle East
Asia
▶ MEXICO
Textile
1.0
Oceania
▶ PORTUGAL
Sources: CHELEM, Euler Hermes forecasts
A significant decline in labor costs has
increased Spain’s export competitiveness
Along with greater flexibility in the labor market,
unit labor costs have dropped by a full -8% below
pre-crisis levels, bringing the manufacturing industry’s hourly labor costs down to
EUR22.7/hour (Eurostat data), compared to
EUR36.8/h in France and EUR37.9/h in Germany.
The country’s exports reached 32% of GDP in
2014 (22% in 2007), accounting for 7% of the
Eurozone’s total exports, an improvement on
6% before the crisis. Further supported by the
EUR depreciation, Euler Hermes expects total
Spanish exports will continue this upward trend,
rising by +EUR10 bn in 2015 and +EUR17 bn in
2016, more than +EUR3 bn of which will originate from the car industry.
Thanks to sector-wide labor competitiveness agreements, the Spanish car industry
is recovering its dynamism
Since the sector is inherently deflationary (due
to price-constrained but ever-improving product), the attractiveness of production sites is a
decisive factor in the allocation of new models.
Such allocation to Spanish sites increased between 2013 and 2014, a trend we expect to
continue, as made evident by the actions of
French manufacturers, Ford, GM or VW. Spanish
car output, after reaching its lowest level at the
end of 2012 (1.5 mn private vehicles), has continuously increased, falling just short of 1.9 mn
units in 2014, resulting in more than +25%
growth and the creation of 31 700 jobs during
the year. At the same time, production decreased in several other European countries
(Belgium, Italy and France), resulting in a low
+2% growth overall European market.
Heading towards a +15% annual growth of
automobile exports in 2015 and 2016
In addition to a reallocation of models designed
for the European market (the Ford Mondéo and
Kuga were previously produced in Belgium or
Germany and the Opel Moka in South Korea),
Spain was chosen to assemble new models (including the Peugeot 301 and Citroën C Elysée)
more suited for extra-European markets. Spain’s
export routes are expanding internationally to
Maghreb countries, Turkey and even South
Africa in an effort to benefit from greater demand growth outside Europe and boost export
volumes further. As more than 80% of Spanish
car production is exported, this is an effective
strategy to reduce regional cyclical risks. Euler
Hermes expects cars will represent 12% of total
Spanish exports in 2016, compared with 8.8%
in 2012.
More than
80%
of Spanish car production
is exported
16
Euler Hermes
Economic Outlook no. 1215 | February-March 2015 | Special Report
+EUR3.4 bn
Cumulative export gains
of Italian Textile sector
in 2015-2016
2015 Export gains - Top 5 sectors
in EUR bn
3.0
Machinery
Chemical
Recipe#6: Creating global
desire
The case of Italy and its fashion-focused
Textile genius
1.9
Textile
Agrifood
Vehicles
1.4
1.0
0.9
Sources: CHELEM, Euler Hermes forecasts
FARAH ALLOUCHE, ANA BOATA
SIMILAR EXPORT
STRATEGIES
▶ FRANCE
Italian exports, one of the main winners in
the region from a lower EUR
GDP growth is expected to finally turn positive
in 2015 (+0.3% after -0.4% in 2014) as a result
of slowly recovering private consumption and
positive net exports. This trend is expected to
strengthen, pushing expectations for GDP
growth to nearly triple in 2016 (to +0.8%), yet
remain very weak, below +1%. Despite Italian
exports continuing to lag behind peer group
performance on the back of slow competitiveness adjustments, Italy will be one of the main
winners from a lower EUR (expected to be 1.12
in Q4 2015) given its high exposure outside the
eurozone and an export structure that is highly
sensitive to price variations. Further, Italy will
continue to take advantage of its ‘Made-In-Italy’
brand created 35 years ago that allowed SMEs
to better position themselves internationally relative to peers. Overall, Italy’s total additional export gains are forecast to reach EUR10 bn in
2015 (compared with EUR7 bn in 2014) and
EUR15 bn in 2016. However, this remains more
than 30% below the 2006-07 average as significant downside pressures on price persist despite rising volumes.
Style: ‘Made-in-Italy’ worn everywhere
The textile industry illustrates the gold standard
of a nation’s branding. Italy ranks as the world’s
third largest textile exporter behind China and
India, with EUR48 bn of exports in 2014. The
success of the myriad of SMEs composing the
sector (circa 50,000) originates from applying
the national branding (and R&D) strategy. Historically organized in clusters, coexistence of
complementary activities deterred innovation
investments. The strong competition – from
both inside and out – forced them to go into
value-added activities, with great export potential. EH forecasts textile exports will increase by
EUR1.4 bn in 2015 and EUR2 bn in 2016.
Italy’s textile machinery engineering, on
the cutting-edge of fashion
The government is committed to this positioning upgrade. A tax-incentive program to promote R&D was launched last year and runs until
2016. It aims at promoting ‘Made-in-Italy’
awareness, especially in the U.S. The total potential value of textile exports in that market is
estimated at EUR10 bn. Similarly, textile machinery producers have bypassed gloomy domestic demand, instead seizing the dynamic
foreign market. Investments in the sector have
grown at an average annual growth rate of
+4.6% since 2009. Furthermore, 79% of production is exported, half to Asia, making Italy the
2nd largest European exporter behind Germany.
As for textiles, Italy already targets new growth
drivers, specifically the U.S. and Turkey, with
sales up +46% and +24%, respectively, as the
(historic) Asian market becomes saturated
(sales -3% in Q2 2014). Orders were up +6% q/q
in Q3 2014 suggesting bright prospects for the
sector. EH forecasts total exports of textile machinery to exceed EUR2.5 bn in 2015 and reach
EUR2.7 bn in 2016.
17
Economic Outlook no. 1215 | February-March 2015 | Special Report
Euler Hermes
Recipe#7: Becoming
the factory country
2015 Automotive Export gains - Top 5 destinations
in USD bn
The case of Poland supplying
Automotive components to
Western Europe
0.56
Germany
Italy
0.21
United Kingdom
YANN LACROIX, MANFRED STAMER
SIMILAR EXPORT
STRATEGIES
▶ MOROCCO
▶ ROMANIA
Outsourcing has turned automotive suppliers into an engine of growth for the Polish
car industry
The automotive industry is an important sector
of the Polish economy, accounting for around
10% of the country’s exports. Within this industry, the cluster of automotive suppliers has been
a particular success story, taking advantage of
Poland’s EU accession in 2004. This boosted exports, dramatically increased links with Germany
and allowed Poland to exploit its main competitive advantage compared with Western Europe,
i.e. wages. The hourly wage in the manufacturing industry, estimated at EUR7.50/hour in
Poland against an average of EUR32.50/hour in
the Eurozone, illustrates the cost advantage and
potential for outsourcing. Exports of the automotive supplier industry increased by an annual
average +13% during 2004-13, outpacing car
manufacturers’ exports (+6%) and total Polish
exports (+11%), a remarkable performance
against the background of a weakening European automobile market. Meanwhile, exports
of automotive suppliers account for 43 % of all
exports of the automotive sector, up from 33%
in 2004.
Strong FDI inflows point to continued out
performance of automotive suppliers...
The acceleration of FDI inflows (+USD2.2 bn in
2012 vs. +USD730mn on average in 20092011) indicates a continuation of buoyant output and export growth of the automotive sector
in the coming years. On the one hand, large in-
18
Czech Republic
41%
0.19
0.12
83 % of total automotive
export gains
France
0.10
Sources: CHELEM, Euler Hermes forecasts
of automobile suppliers
exports go towards
Germany
vestments of car manufacturers such as Volkswagen (a new factory for the assembly of commercial vehicles), FIAT (for the production of
the replacement of the FIAT Punto, currently
produced in Italy) and Opel (for the production
of new engines) will increase activity. On the
other hand, automotive suppliers and subcontractors associated with these developments
will also benefit. Numerous international suppliers such as Delphi, Eaton, Faurecia, Valéo, Lear
and Hutchinson operate in Poland. The strategy
of outsourcing goes beyond the metallurgical
specificity as the main global tire manufacturers
(Michelin, Goodyear, Dunlop and Bridgestone)
have also established branches in Poland, a sign
of sound industrial development.
... with +8% export growth annually forecast for 2015-2016
With the recovery in the European automobile
market, combined with the increase in FDI inflows and ongoing outsourcing to Poland, Euler
Hermes expects the exports of automotive suppliers will grow by about +8% in both 2015 and
2016. This performance will be driven by carmakers in Germany, but also in the Czech Republic, which is the main production site of
Skoda (a market share-gaining subsidiary of
the Volkswagen Group), and in Slovakia with
its factories of Volkswagen, Kia and PeugeotCitroen.
Euler Hermes
Economic Outlook no. 1215 | February-March 2015 | Special Report
Recipe#8: Paving the road
to frontier markets
The case of Turkey exporting Agrofood
products to high-risk countries
+USD1.3 bn
Cumulative export gains
of Turkish Food sector
in 2015-2016
FARAH ALLOUCHE, MANFRED STAMER
SIMILAR EXPORT
STRATEGIES
▶ CHINA
▶ JAPAN
Benefits from increased focus on frontier
markets
Turkish exports have grown at a faster pace than
global exports over the past 10 years (+10.5%
compared with +8.5% annual average between
2005-2014). Part of the success has been
Turkey’s increased focus on frontier markets, in
particular in the Middle East. While the Eurozone’s export share fell from 44% in 2000 to
27% in 2012, the Middle East increased its share
from 9% in 2000 to 28% in 2012. Turkey has
taken the role as regional hub between Europe
and MENA, with the benefits but also the costs.
Geopolitical risks caused a reversal in the changing trade structure in 2013-2014, reducing the
Middle East’s export share to 22%, while the Eurozone edged up to 30%. The share of Iraq,
Turkey’s second largest export market, fell from
8% in 2013 to 7% in 2014. In 2015-2016, Euler
Hermes expects Turkish exports will rise by
USD10 bn and the Middle East and Eurozone
will each account for around USD3.5 bn.
Aiming to become a major food exporter by
2023
Turkey was ranked the 25th largest food exporter in 2014, with USD17.5 bn, markedly behind the leading exporters, the U.S., Netherlands
(including re-exports, worth nearly half of total
Dutch exports) and Germany. Nonetheless, the
country has potential to become a major international player. The food industry accounted for
11.8% of GDP in 2014 and food exports grew by
an annual average +10.9% in 2009-2014. In
2015-2016, the food sector is expected to record
cumulative export gains of +USD1.3 bn. Turkey’s
Vision 2023 program (a set of economic targets
to be reached by the 100th anniversary of the
founding of the Republic of Turkey) includes
reaching USD40 bn in agricultural exports.
Long-run investment in uncertain markets
The recent surge in Turkish food exports was
fuelled by neighboring countries, despite regional instability. In particular, Turkish food exports to Iraq increased at an average annual
rate of +27% in 2009-2013, reaching USD3.5
bn in 2013. However, recent events in Iraq resulted in an estimated loss for Turkish companies of export trade of USD1 bn in 2014. In the
short term, Turkey has also potential to increase
its market share in Russia, against the background of Russian sanctions on some EU agrifood products. Since 2009, Turkish food exports
to Russia have increased by +10% per year. But
this trend is unlikely to have continued in 2014
as total Turkish exports to Russia fell by -15%.
Only certain products, such as meat and fish,
accounted for increased exports to Russia in H2
2014. Going forward, products such as meat,
citrus or dairy foods could benefit if Turkish
companies comply with the strict Russian food
regulations. Overall, investing in higher risk markets is a long-run strategy with an elevated riskreward pay-off.
Total exports
Nominal, 100 =2010
Germany Benchmark
Saudi Arabia
Russia
Iraq
250
200
150
100
50
09
10
11
12
13
14
Sources: National sources, IMF, Euler Hermes
19
Economic Outlook no. 1215 | February-March 2015 | Special Report
Euler Hermes
Recipe#9: Investing in
infrastructure, hard and soft
The case of United Arab Emirates
stretching its Plastics exports
Top 10 - World’s busiest airports 2013
Total cargo traffic
Loaded and unloaded (thousand of metric tonnes)
Hong Kong
4,162
Menphis
4,138
Shangai
Incheon
MAHAMOUD ISLAM, DIDIER MOIZO
Dubai
2,436
Anchorage
2,421
Louisville
SIMILAR EXPORT
STRATEGIES
▶ THE NETHERLANDS
▶ HONG KONG
2,929
2,464
2,216
Frankfurt
2,094
Paris
2,069
Tokyo
2,020
Source: Airports council international
Slowing, but not alarming
UAE GDP growth slowed in 2014 (+4% from
+5% in 2013). We expect a further small deceleration in 2015 (+3.5%) before a rebound in
2016 (+4.5%). Exports will be the main detractor
within this weak performance since oil prices
are falling, lowering exports (-USD15 bn) in 2015
before a gradual recovery starting in 2016
(+USD18 bn). In the short run, the country’s resilience will rely on the performance of investment due (i) to the preparations ahead of hosting the World Expo 2020 and (ii) a long-term
strategy to enhance the position of the UAE as a
global trade hub (Dubai is already the third
largest re-export center after Hong Kong and
Singapore).
Upgrading logistics is key
With a limited share of exports from the nonoil sector, the authorities elected to exploit the
UAE’s strategic location and its role as a gateway
both to advanced economies and fast-growing
emerging markets. Given that 90% of global
trade is carried by sea, the country has adopted
a significant infrastructure program but also reinforced its regulatory framework (including a
reduction in the procedures needed to export)
+USD1.2 bn
Cumulative export gains
of UAE Plastics products
in 2015-2016
20
to make the country more attractive for trade.
This has translated into good global rankings
from various institutions such as the World Economic Forum (ranked 16 out of 138 economies
in the Enabling Trade Index) and the World Bank
(ranked 22 out of 189 in the Doing Business
survey and 27 out of 160 in the Logistic Performance Index). Accordingly, Dubai has reinforced its position as a leading sea-air multimodal transport hub: according to the Airport
Council International ranking, Dubai is the 5th
busiest Aircargo hub in the world. This strategy
is reflected in the weight occupied by the construction sector in the UAE, which reached 9.4%
of GDP compared with a world average of 6.4%.
The value added in the construction industry is
estimated at USD39.4 bn in 2014 and is forecasted to increase to USD44 bn in 2015.
Exports: Focusing on downstream petrochemical products first
UAE intends to diversify its exports base as it is
too concentrated on raw energy products
(roughly 70% exports). In the short run the focus
is to move up the value chain and increase exports of oil-derived goods. Products such as plastics have seen exports increase by 20% per year
in nominal terms over the past ten years and
still continue to expand. We expect them to
slow down in 2015 (+10% y/y, equivalent to
+USD500 mn exports gains compared to 2014)
reflecting limited world demand in the world
and downward price pressures, before a small
acceleration in 2016 (+13% and +USD700 mn)
due to further improvement in external demand.
Euler Hermes
Economic Outlook no. 1215 | February-March 2015 | Special Report
Recipe#10: Getting support
from the highest level
The case of China ruling the Household
electronic arena
+USD15 bn
Export gains of China Consumer
electronics, and household
appliances in 2015
MAHAMOUD ISLAM, DIDIER MOIZO
SIMILAR EXPORT
STRATEGIES
▶ SOUTH KOREA
▶ JAPAN
Exports will remain supportive of growth in
2015, despite significant deflationary pressures
As we expected, GDP increased by +7.4% in
2014 (after +7.7% in 2013). The intended economic rebalancing remains on track, with private consumption being a key engine for
growth. However, the country still faces ongoing
financing pressures for companies and the
banking system coupled with the prevailing imbalances in the property market. GDP growth is
forecast to moderate to +7.1% in 2015. On the
domestic front, the economy is likely to be supported by targeted and conventional monetary
policy easing and by gradual improvement in
private consumption resulting from rising real
wages. Exports are likely to be resilient in 2015,
with a moderate increase in value (+USD120
bn after +USD131 bn in 2014) reflecting deflationary pressures.
2015 Export gains -Top 5 sectors
in USD bn
Electronic
38
21
Textile
15
Machinery
Chemical
13
Electric
13
Sources: CHELEM, Euler Hermes forecasts
Promoting exports: From “Made in China”
to “Created in China”
Government policies will remain supportive of
export volume growth. In particular, it is likely
that the PBoC will continue to maintain the currency at a comfortable level for exporters
(6.25RMB/USD on average in 2015) and fiscal
policy will remain favorable for fragile exporters
(in January, China cut tax for coking coal exports
from 10% to 3%). In parallel, policies will continue
to support companies that move up the valueadded chain. These policies include tax advantages for companies upgrading their production
processes (announced in 2014) and more tax
incentives and rewards for companies developing high value-added products. Speeding up the
transition from products “Made in China” to
products “Created in China” will help - through
an increase in quality - the economy’s exports
to be less sensitive to price pressures resulting
from rising labor costs. A good example of this
process is the electronic segment related to
household equipment, which has undergone
strong growth in the last 10 years.
Equipping world consumers will be key
Over a ten-year period, Chinese exports increased at a faster rate (+17% annual average
for nominal exports) than world exports (+9%),
benefiting from membership of the WTO and
emergence as a major manufacturing hub. This
trend was even more pronounced for consumer
electronic goods and household appliances
(+18.8% for China vs. +7.4% for the world).
While the share in world exports of these products remained stable (4%), Chinese global market share tripled over the decade, reaching 40%.
This “dominance” is particularly true for the telephony market but also specific products such
as electric water heaters (China accounts for
45% of exports of such products). All in all, we
expect the consumer electronics and household
appliances market will expand by +USD15 bn,
at least, in 2015.
21
Economic Outlook no. 1215 | February-March 2015 | Special Report
Euler Hermes
Recipe#11: Betting on
innovation
The case of Taiwan enhancing the
Semiconductors industry
+USD4 bn
Export gains of Taiwan
Electronic components
in 2015
MAHAMOUD ISLAM, DIDIER MOIZO
SIMILAR EXPORT
STRATEGIES
▶ SOUTH KOREA
▶ CHINA
An innovation hub
Taiwan’s GDP growth is expected to increase
gradually in 2015 (+3.8%) and 2016 (+3.9%) supported by both improving global demand and a
vibrant domestic market. Exports in particular
(75% of GDP) are set to rise by +USD15 bn and
+USD20 bn in 2015 and 2016, respectively, benefitting from rising new orders in the electronics
sector. Taiwan generates 13% of world electronic
components exports (including circuit boards,
photosensitive devices, and integrated circuits),
which generated about USD80 bn in 2014. This
success is the result of a deliberate strategy to
acquire technological skills through the creation
of science parks bringing together academia, industry, and research centers and strong investment growth for innovative projects. R&D expenditures are equivalent to 3.1 % of GDP, close
to Germany (2.9%). These ecosystems for inno-
Industrial Production, Electronic Products
10
8
6
4
2
0
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Source: Ministry of Economic Affairs, Taïwan
22
vation enabled the emergence of leaders like
TSMC, Media Tek & Mstar, and UMC. There are
about 60 R&D centers in the semiconductors industry in Taiwan.
Price pressures to stabilize in 2015
Prices for electronic components are set to stabilize, supported by improving global demand.
The electronic components market is driven by
new products of the Technologies of Information
and Communication, the development of connected objects (+ 6.7% in 2014), but also other
markets such as the automotive sector (+ 8%
market share in 2014) with the development of
hybrid vehicles and driver assistance systems.
The market for such goods is an intense competitive environment, with regional components
prices falling (-52%) between 2000 and 2012 and
since then stagnating. Production, which slumped
during the global financial crisis (-28%) between
February 2008 and August 2009, recovered rapidly rising +37% from September 2009 to April
2010 and slowing to a more sedate increase of
+4% in 2013. The observed stagnation in 2014
hides the dynamism of site installations outside
the territory, like the Taiwanese foundry, UMC
that implement a factory at Xiamen in China.
Electronic components exports will increase
by +USD4 bn in 2015
Exports of electronic components are expected
to grow by +5% in 2015 and will provide approximately +USD4 bn in export gains, benefitting from improving demand in the tech sector.
The mobile phone segment is usually a major
driver. For example, the launch of an iPhone
usually contributes +0.8pps to total exports
growth and +0.5pps to overall GDP growth, on
average. The main export markets are Mainland
China (25% of electronic exports) and Hong
Kong (28%). After doubling in the past ten years,
export shares of these two markets will probably
stabilize, with companies in Mainland China
emerging as key competitors. In the meantime,
other destinations represent growth markets,
particularly Singapore, which accounts for 16%
of electronic exports, compared with 12% ten
years earlier.
Euler Hermes
Economic Outlook no. 1215 | February-March 2015 | Special Report
Recipe#12: Multiplying
Free Trade Agreements
The case of Singapore bridging the
Electronic equipment divide
MAHAMOUD ISLAM, DIDIER MOIZO
SIMILAR EXPORT
STRATEGIES
+USD2 bn
Net export gains of Singapore
Electrical and Electronic equipment
sector to other ASEAN - 6 partners
in 2015
in USD bn, 2013
Singapore
+30
Philippines
-0.2
Malaysia
-1.7
Thailand
-4.5
Indonesia
-4.7
Viet Nam
▶ MEXICO
▶ EUROPEAN UNION
2015 outlook: towards a moderate recovery
Singapore’s GDP growth is likely to remain below
trend in 2015. Economic growth is set to improve
moderately to +3.4% (from +2.9% in 2014) benefitting from both domestic demand and external demand. Monetary policy easing is likely to
support investment and stabilize the exchange
rate at a favorable level for exporters. Exports
are likely to recover in 2015 but at slow pace
(+USD9 bn) due to falling energy prices (sub-
Trade balance of electrical and electronic
equipment products to ASEAN - 6 partners
-19
Sources : International Trade Center, Euler Hermes
tracting -USD10 bn from Singapore’s exports),
profiting from improving external demand especially from Asian partners. We expect exports
will accelerate further in 2016 (+USD25 bn).
Betting on Hub and Spoke Free Trade Agreements
In addition to its strategic location and excellent
infrastructure (First in “Doing Business 2015”,
second in the ranking of the Logistics Performance index), Singapore has built strong partnerships through 21 bilateral and regional Free Trade
Agreements (FTAs) with 32 trading partners.
This large network includes the world’s largest
economies (U.S., China and Japan) and, perhaps
more importantly, fast-growing countries in
South East Asia through the ASEAN Partnership.
With the latter representing one of the economic
bright spots in the coming years, strengthening
relationships within the region will be key. This
is why the ASEAN economic community projects
have been designed. The goal is to create a single
market and a production base by end 2015, with
a flow of goods, services, investment capital and
skilled labor. It is unlikely that a single market will
be achieved within the year as the development
gaps remain high, particularly between the core
markets and the CMLVs (Cambodia, Myanmar,
Laos, and Vietnam). However, we think that the
process will start and will present significant commercial opportunities, especially in core markets.
Keeping strong leadership in the electronic
equipment sector within the region (ASEAN)
Singapore will probably be one of the main winners in the short run as it is a gateway to the region with good links to the other major
economies and it has most of the qualities (including a skilled labor market, strong innovation
and appropriate business-friendly infrastructure) to benefit from trade development. For
example, in the electrical and electronic equipment sector, which is one of the key industries
of the region, Singapore is already the country
that takes most advantage of the existing FTAs
in the region. Indeed, intra-zone exports of electrical and electronic goods increased at an average annual rate of +6.7% over the past 10
years and the net balance has always been in
Singapore’s favor. In 2014, Singapore’s net exports of electrical and electronic equipment to
other ASEAN-6 countries were valued at around
USD30 bn and we expect an increase of +USD2
bn in 2015.
23
Economic Outlook no. 1215 | February-March 2015 | Special Report
Economic Research
Euler Hermes Group
Euler Hermes
Economic
Outlook
no.1210
Economic
Outlook
no. 1211-1212
August September 2014
no. 1214
January 2015
Special Report
www.eulerhermes.com
www.eulerhermes.com
www.eulerhermes.com
www.eulerhermes.com
Economic Outlook
and other
publications
Economic
Outlook
December 2014
October-November 2014
Special Report
Macroeconomic
and Country Risk Outlook
Economic
Outlook
no.1213
Business Insolvency Worldwide
Overview 2015
The global
automotive market
Not such a Grimm tale
but no fabled happy ending
International
debt collection
Back on four wheels
The Good, the Bad and the Ugly
A rotten apple
can spoil the barrel
Payment terms, past dues, non-payments
and insolvencies: What to expect in 2015?
Economic Research
Economic Research
Economic Research
Already issued:
no. 1195-1196
◽ Macroeconomic, Risk and Insolvency Outlook
The world at a crossroads
no. 1197
◽ Global Sector Outlook
Reconciling economic (dis)illusions and financial risks
no. 1198
◽ Special Report
The Mediterranean: Turning the tide
no. 1199
◽ Macroeconomic and Country Risk Outlook
Half-baked recovery
no. 1200-1201
◽ Business Insolvency Worldwide
Patching things up: Fewer insolvencies, except in Europe
no. 1202-1203
◽ Macroeconomic and Country Risk Outlook
Top Ten Game Changers in 2014: Getting back in the game
no. 1204
◽ Global Sector Outlook
All things come to those who wait: Green shoots for one
out of four sectors
no. 1205-1206
◽ Macroeconomic and Country Risk Outlook
Hot, bright and soft spots: Who could make or break
global growth?
no. 1207
◽ Business Insolvency Worldwide
Insolvency World Cup 2014: Who will score fewer insolvencies?
no. 1208-1209
◽ Macroeconomic, Country Risk and Global Sector Outlook
Growth: A giant with feet of clay
no. 1210
◽ Special Report
The global automotive market: Back on four wheels
no. 1211-1212
◽ Business Insolvency Worldwide
A rotten apple can spoil the barrel
Payment terms, past dues, non-payments and insolvencies:
What to expect in 2015?
no. 1213
◽ Special Report
International debt collection:The Good, the Bad and the Ugly
no. 1214
◽ Macroeconomic and Country Risk Outlook
Overview 2015: Not such a Grimm tale but no fabled happy
ending
no. 1215
◽ Special Report
Global trade: What’s cooking? Introducing twelve countries’
recipes for boosting exports
To come:
no. 1216
24
◽ Special Report
Economic Research
Euler Hermes
The
Economic
Talk
N
https://www.youtube.com/watch?v=GtFdT9A3BCI
Economic
Insight
◽Latin America: Fall in oil prices will cut growth by -0.4pp > 2015-02-26
◽Greece and Europe: The sequel Political will, Time and Value-at-Risk,
> 2015-01-28
◽AFAQ: #QEmania - What does it mean for European companies?
> 2015-01-22
◽An aditional USD88bn of U.S. exports in 2015 > 2014-12-02
◽Chinese growth - What could possibly go wrong? > 2014-12-02
◽U.S. businesses’payment behaviors point to slowed GDP and mixed
picture for key industries > 2014-11-18
◽Spain: Cautiously taking the bull by the horns > 2014-10-08
◽Chinese exports 2014-2015: Another US300bn > 2014-10-07
◽Russia and the West: Tough Love? > 2014-09-12
◽Non-payments in Italy: It’s not over… yet! > 2014-09-04
◽Don’t cry too much for Argentina > 2018-08-08
◽ Fertilizer: The seed growing secretly > 2014-08-05
◽ Road transport: Labor costs explain the large gap in profitability in
Europe > 2014-07-08
◽The European electricity market under strong pressure > 2014-07-05
◽Thailand: Another coup challenges the country’s economic
Industry
Report
Economic Outlook no. 1215 | February-March 2015 | Special Report
Weekly
Export Risk
Outlook
N
http://www.eulerhermes.com/economic-research/economic-publications/Pages/Weekly-Export-Risk-Outlook.aspx
Country
Report
◽Azerbaijan > 2014-12-17
◽Bangladesh > 2014-12-17
◽Cambodia > 2014-12-17
◽Denmark > 2014-12-17
◽El Salvador > 2014-12-17
◽Ethiopia > 2014-12-17
◽Gabon > 2014-12-17
◽Germany > 2014-12-17
◽Honduras > 2014-12-17
◽Iceland > 2014-12-17
◽Israel > 2014-12-17
◽Laos >2014-12-17
◽Latvia > 2014-12-17
◽Lithuania > 2014-12-17
◽Mali > 2014-12-17
◽Mozambique > 2014-12-17
◽Myanmar > 2014-12-17
◽Norway > 2014-12-17
◽Paraguay > 2014-12-17
◽Rwanda > 2014-12-17
◽Sri Lanka > 2014-12-17
◽Sweden > 2014-12-17
◽Switzerland > 2014-12-17
◽Taiwan > 2014-12-17
◽Trinidad & Tobago > 2014-12-17
◽Turkey > 2014-12-17
◽Uganda > 2014-12-17
◽Uruguay > 2014-12-17
◽The paper industry in Italy: Time to turn the page > 2014-12-16
◽Consumer electronics: Only a timid rebound in 2015 > 2014-12
◽Construction in Italy: Only a timid rebound in 2015 > 2014-12-02
◽Textile & Clothing in Germany: A two-geared reality > 2014-10-31
◽Textile & Clothing in Italy: Bronze medal on the international podium,
but facing obstacles > 2014-10-31
◽Italian car sector: Time to do an oil change > 2014-10-22
◽U.S Automotive > 2014-10-03
◽U.S. Construction > 2014-10-03
◽Italian steel at a crossroads > 2014-09-30
◽Der Automobilweltmarkt: Wieder auf allen vier Rädern > 2014-09-19
◽Agrifood in the Netherlands The bumpy road continues > 2014-09-18
25
Economic Outlook no. 1215 | February-March 2015 | Special Report
Euler Hermes
> Argentina
Solunion
> Colombia
Solunion
Subsidiaries
Av. Corrientes 299
Calle 7 Sur No. 42-70
Suites 403-11, 4/F
C1043AAC CBA,
Edificio Fórum II Piso 8
Cityplaza 4
Registered office:
Euler Hermes Group
1, place des Saisons
92078 Paris La Défense - France
Phone: + 33 (0) 1 84 11 50 50
Buenos Aires
Medellin
12 Taikoo Wan Road
Phone: + 54 11 4320 9048
Phone : +57 4 444 01 45
Island East
> Australia
Euler Hermes Australia Pty Ltd
> Czech Republic
Euler Hermes Europe SA
organizacni slozka
Phone: + 852 3665 8901
www.eulerhermes.com
Hong Kong
Level 9, Forecourt Building
2 Market Street
Sydney, NSW 2000
Phone: + 61 2 8258 5108
> Austria
Acredia Versicherung AG
Himmelpfortgasse 29
1010 Vienna
Phone: + 43 5 01 02-1111
Euler Hermes Collections GmbH
Zweigniederlassung Österreich
Handelskai 388
1020 Vienna
Phone: + 43 1 90 227 14000
> Bahrain
Please contact United Arab Emirates
> Belgium
Euler Hermes Europe SA (NV)
Avenue des Arts — Kunstlaan, 56
1000 Brussels
Phone: + 32 2 289 3111
> Brazil
Euler Hermes Seguros de Crédito SA
Molákova 576/11
186 00 Prague 8
Phone: + 420 266 109 511
> Denmark
Euler Hermes Danmark,
filial of Euler Hermes Europe SA, Belgien
Amerika Plads 19
2100 Copenhagen O
Phone: + 45 88 33 33 88
> Estonia
Please contact Finland
> Finland
Euler Hermes Europe SA
Suomen sivuliike
Mannerheimintie 105
00280 Helsinki
Phone: + 358 10 850 8500
Jardim Paulista
São Paulo / SP 01311-300
Phone: + 55 11 3065 2260
> Hungary
Euler Hermes Europe SA
Magyarrorszagi Fioktelepe
Euler Hermes Magyar Követeléskezelõ Kft.
(trade debt collection)
Kiscelli u. 104
1037 Budapest
Phone: +36 1 453 9000
> India
Euler Hermes India Pvt.Ltd
5th Floor, Vaibhav Chambers
Opposite Income Tax Office
Bandra Kurla Complex
Bandra (East)
Mumbai 400 051
Phone: +91 22 6623 2525
> Indonesia
PT Asuransi Allianz Utama Indonesia
Summitmas II. Building, 9th Floor
> France
Euler Hermes France SA
Euler Hermes Collection
Euler Hermes World Agency
1, place des Saisons
F-92048 Paris-La-Défense Cedex
Phone: + 33 1 84 11 50 50
Avenida Paulista, 2.421 — 3° andar
Jl. Jenderal Sudirman Kav 61-62
Jakarta 12190
Phone: +62 21 252 2470 ext. 6100
> Ireland
Euler Hermes Ireland
Allianz House
Elm Park
Merrion Road
> Germany
Euler Hermes Deutschland AG
Dublin 4
Friedensallee 254
Phone: +353 (0)1 518 7900
22763 Hamburg
> Bulgaria
Euler Hermes Bulgaria
Phone: + 49 40 8834 0
2, Pozitano sq.
Euler Hermes Aktiengesellschaft
2, Shenkar Street
Gaastraße 27
68010 Tel Aviv
22761 Hamburg
Phone: +97 23 796 2444
“Perform Business Center”
Sofia, 100
Tél. : + +359 2 890 1414
> Canada
Euler Hermes North America Insurance
Company
1155, René-Lévesque Blvd West
Phone: + 49 40 8834 9000
Euler Hermes Collections GmbH
Zeppelinstr. 48
14471 Postdam
Phone: + 49 331 27890 000
Bureau 2810
Montréal Québec H3B 2L2
Phone: +1 514 876 9656 / +1 877 509 3224
> Chile
Solunion
Av. Isidora Goyenechea, 3520
Santiago
Phone: + 56 2 2410 5400
> China
Euler Hermes Consulting
(Shanghai) Co., Ltd.
Unit 2103, Taiping Finance Tower, No. 488
Middle Yincheng Road, Pudong New Area,
Shanghai, 200120
Phone: + 86 21 6030 5900
Euler Hermes Rating GmbH
Friedensallee 254
22763 Hambourg
Phone: + 49 40 8 34 640
Euler Hermes Liaison Office at AGCS
Allianz Global Coroporate & Specialty AG
Fritz-Schäffer-Straße 9
81737 München
Phone: + 49 89 38 00 12 159
> Greece
Euler Hermes Hellas
Credit Insurance SA
16 Laodikias Street & 1-3 Nymfeou Street
Athens Greece 11528
Phone: + 30 210 69 00 000
26
> Hong Kong
Euler Hermes Hong Kong Services Ltd
> Israel
ICIC
> Italy
Euler Hermes Europe SA
Rappresentanza generale per l’Italia
Via Raffaello Matarazzo, 19
00139 Rome
Phone: + 39 06 8700 1
> Japan
Euler Hermes Deutschland AG,
Japan Branch
Kyobashi Nisshoku Bldg. 7th floor
8-7, Kyobashi, 1-chome,
Chuo-Ku
Tokyo 104-0031
Phone: + 81 3 35 38 5403
Euler Hermes
Economic Outlook no. 1215 | February-March 2015 | Special Report
> Kuwait
Please contact United Arab Emirates
> Oman
Please contact United Arab Emirates
> South Korea
Euler Hermes Hong Kong Services
Korea Liaison Office
> Tunisia
Please contact Italy
> Latvia
Please contact Sweden
> Philippines
Please contact Singapore
> Poland
Towarzystwo Ubezpieczen
Euler Hermes SA
Rm 1411, 14/F, Sayong
> Turkey
Euler Hermes Sigorta A.S.
Platinum Bldg.
156, Cheokseon-dong,
Büyükdere Cad. No:100-102
Chongro-ku,
Maya Akar Center Kat: 7 Esentepe
Seoul 110-052
34394 Şișli/ Istanbul
Phone: + 82 2 733 8813
Phone: +90 212 2907610
Phone: + 48 22 363 6363
> Spain
Solunion
> United Arab Emirates
Euler Hermes
c/o Alliance Insurance (PSC)
Avda. General Perón, 40
Warba Center 4th Floor
50470 Kuala Lumpur
> Portugal
COSEC Companhia de Seguro de
Créditos, S.A.
Phone: +603 2264 8556 (or 8599)
Avenida da República, nº 58
28020 Madrid
Dubai
1069-057 Lisbon
Phone: +34 91 581 34 00
Phone: + 971 4 211 6005
> Sri Lanka
Please contact Singapore
> United Kingdom
Euler Hermes UK
> Sweden
Euler Hermes Sverige filial
London E14 5DX
> Lithuania
Please contact Denmark
ul. Domaniewska 50 B
> Malaysia
Euler Hermes Singapore Services Pte Ltd.,
Malaysia Branch
Suite 3B-13-7, Level 13, Block 3B
Plaza Sentral, Jalan Stesen Sentral 5
02-672 Varsaw
> Mexico
Solunion
Phone: + 351 21 791 3700
Torre Polanco
> Qatar
Please contact United Arab Emirates
Mariano Escobedo 476, Piso 15
Colonia Nueva Anzures
11590 Mexico D.F.
Phone: +52 55 52 01 79 00
> Romania
Euler Hermes Europe SA Bruxelles
Sucursala Bucuresti
Edificio Moda Shopping
Office 405
Portal C, 3a planta
PO Box 183957
1 Canada Square
P.O. Box 729
> Morocco
Euler Hermes Acmar
Str. Petru Maior Nr.6
101 64 Stockholm
Sector 1
Phone: + 46 8 5551 36 00
37, bd Abdelatiff Ben Kaddour
011264 Bucarest
20 050 Casablanca
Phone: + 40 21 302 0300
> Russia
Euler Hermes Credit Management OOO
Office C08, 4-th Dobryninskiy per., 8,
Richtiplatz 1
Pettelaarpark 20
Moscow, 119049
Postfach
P.O. Box 70751
Phone: + 7 495 9812 8 33 ext. 4000
8304 Wallisellen
> Saudi Arabia
Please contact United Arab Emirates
Phone: + 41 44 283 65 85 (Reinsurance)
> The Netherlands
Euler Hermes Nederland
5201CZ’s-Hertogenbosch
Phone: + 31 (0) 73 688 99 99 / 0800 385 37 65
Euler Hermes Bonding
1100 AL Amsterdam
12 Marina View
Phone: +31 (0) 20 696 39 41
#14-01 Asia Square Tower 2
Singapore 018961
323 United Center Building
> New Zealand
Euler Hermes New Zeland Ltd
Phone: + 65 6297 8802
30th Floor
Auckland 1010
Phone: + 64 9 354 2995
> Slovakia
Euler Hermes Europe SA, poboka
poist’ovne z ineho clenskeho statu
Phone: + 1 877 883 3224
> Vietnam
Please contact Singapore
> Taiwan
Please contact Hong Kong
P.O. Box 12473
Level 1, 152 Fanshawe Street
Owings Mills, MD 21117
Phone: + 41 44 283 65 65
> Singapore
Euler Hermes Singapore Services Pte Ltd
De Entree 67 (Alpha Tower)
> United States
Euler Hermes North America
Insurance Company
800 Red Brook Boulevard
> Switzerland
Euler Hermes Deutschland AG,
Zweigniederlassung Zürich
Euler Hermes Reinsurance AG
Phone: + 212 5 22 79 03 30
Phone: + 44 20 7 512 9333
Klarabergsviadukten 90
> Thailand
Allianz C.P. General Insurance Co., Ltd
Silom Road
Bangrak, Bangkok 10500
Phone: + 66 2638 9000
2012: Plynárenská 7/A
> Norway
Euler Hermes Norge
Holbergsgate 21
P.O. Box 6 875
St. Olavs Plass
82109 Bratislava
Phone: + 421 2 582 80 911
> South Africa
Please contact Italy
0130 Oslo
Phone: + 47 2 325 60 00
27
Euler Hermes Economic Outlook
is published monthly by the Economic Research Department
of Euler Hermes Group
1, place des Saisons, F-92048 Paris La Défense Cedex
e-mail: [email protected] - Tel. : +33 (0) 1 84 11 50 50
This document reflects the opinion of the Economic Research Department of Euler Hermes Group.
The information, analyses and forecasts contained herein are based on the Department's current
hypotheses and viewpoints and are of a prospective nature. In this regard, the Economic Research
Department of Euler Hermes Group has no responsibility for the consequences hereof and no
liability. Moreover, these analyses are subject to modification at any time.
www.eulerhermes.com
Economic
Outlook