A Long Tradition

Written by HWF Hamburg on . Posted in FDI

As early as 1266, merchants of the Hanseatic League met at the Steelyard trading base in London to do business. By 1567, the "Right Worshipful Company of Merchant Adventurers of England" was trading cloth in Hamburg. In 1926, the British American Tobacco Co (BAT) set up a branch on the banks of the Elbe River. Today, about 10 percent of Hamburg’s exports go to Britain, with pharmaceutical goods and aircraft products topping the list. Imports from Britain mainly include crude oil and natural gas as well as petroleum products. Great Britain is a perfect market for German goods as it also provides German companies with access to other Commonwealth markets.

World meets business at the waterfront
Located between the North Sea and the Baltic Sea, with the Elbe River as its lifeline and the city-state of Hamburg as its heart, the Hamburg Metropolitan Region (HMR) is one of the most competitive regions in Germany and Europe. The region is highly attractive for international and national companies as it combines economic momentum with a high quality of life. Export-oriented businesses benefit from the broad range of services available in the port of Hamburg.

Ever since Hamburg’s port was established more than 1,000 years ago, cosmopolitanism, open-mindedness and hospitality have been continuously nourished in Hamburg. When this emerging commercial centre joined the Hanseatic League of merchants in the 14th century, Hamburg became the economic centre of the North Sea and Baltic Sea region. Hamburg swiftly turned into a true global player and cosmopolitan city. Since then, Hamburg, the “gateway to the world”, has made it a point to keep its gates open – in both directions. Today, Hamburg is one of the most dynamic cities within the European Union and continues to attract companies, institutions and professionals from around the world. Some 250,000 citizens from 185 nations have made Hamburg their new home and currently work on the banks of the Alster Lake and the Elbe River. More than 100 consular missions represent their interests in Hamburg.

Hamburg: Great Britain’s Gateway to Europe

Written by Henry Martin on . Posted in FDI

The UK’s decision to leave the European Union has led to insecurity and relocation considerations in the corporate world. It is widely anticipated that companies that generate their revenue mainly within the European Union will consider relocating their business operations. Established locations such as Amsterdam, Dublin, Frankfurt and Paris have come forward with offers to London’s financial players, and a number of countries in Central and Eastern Europe are hoping for service components e.g. in the commercial sector to be migrated. At the same time, there is one city that continues to emerge in this locational competition: a city that stands out for its long-established economic relations with the UK like no other city – Hamburg. It is often said that Hamburg is the most Anglophile city in Germany, and business relations between Hamburg and Britain boast a particularly long tradition.

Hamburg values its century-long friendship with the United Kingdom and regrets the UK’s decision to leave the European Union. In the eyes of Hamburg, it is vital to ensure the UK’s greatest possible integration into the European single market also in future.

CEO Insight spoke to Rolf Strittmatter, managing director of the HWF Hamburg Business Development Corporation, about the UK leaving the European Union and Hamburg’s position in this context.

CEO Insight: Hamburg and the UK are linked by a long tradition and Hamburg’s residents are known to be true Anglophiles. The UK’s decision to leave the European Union must have been particularly upsetting to Hamburg.

Rolf Strittmatter, managing director of the HWF Hamburg Business Development CorporationRolf Strittmatter: We deeply regret the decision, and yet we have to make the best out of it. Trade relations date back several centuries, i.e. long before the European Union was established. The UK only joined the EEC in 1973, which was highly disputed at the time. Today, hardly anyone seems to remember that an earlier attempt to join had failed due to the French veto in 1963. There have also been several referendums, with different outcomes. Which goes to show that trade relations between Hamburg and the United Kingdom are functional with or without the EU. But of course it would be better with the EU. CEO Insight: In what areas do you expect trade relations to become more difficult to maintain?

Rolf Strittmatter: At this stage the conditions of Brexit are of course unclear. That aside, take Airbus – a European flagship project various countries are involved in. Airbus has invested in the UK for more than 20 years. In the civil division, all wings come from either Broughton (Wales) or Filton in the north of Bristol, and are assembled in Hamburg and other locations. Future custom barriers might slow down and increase the price of production processes. However, as a Boeing competitor, Airbus has to keep an eye on cost. Airbus employs 15,000 people in Britain. Together with some 4,000 suppliers, there are nearly 100,000 Britons depending on Airbus as an employer. For all these individuals, Brexit is not making life easier.

"The opening of the Elbphilharmonie Hamburg this January has created a pioneering spirit and generated incredible media coverage across the globe."

CEO Insight: In Britain it certainly doesn’t go unnoticed that many European locations on the continent are hoping to benefit from Brexit and are competing quite openly for businesses and jobs. Amsterdam, Berlin, Dublin, Frankfurt, Luxemburg and Paris are but a few examples here. Hamburg has remained fairly quiet in comparison.

Rolf Strittmatter: The fact that we are not shouting loud does not mean we are less active. Whenever we discuss additional European activities with Asian and North American companies we do in fact point out why they are better off not going to London following Brexit. We have already scheduled our next trip to Asia, and when talking to businesses with European headquarters in London we will discuss the reasons why they might want to opt for Hamburg. And we are also looking at the European Medicines Agency (EMA) based in London. That said, it is up to the Federal Government to decide which German city will enter the competition. We generally attach great importance to fair play, and we certainly don’t want to be perceived as “one of the vultures circling above the City of London”. The UK and Hamburg are connected in too many ways for that to happen.

CEO Insight: And what are your arguments in promoting Hamburg? What does Hamburg have that London doesn’t?

Rolf Strittmatter: Hamburg is experiencing very good times at the moment. The opening of the Elbphilharmonie Hamburg this January has created a pioneering spirit and generated incredible media coverage across the globe. The next large-scale event will be the launch of the European XFEL – a €1.5 billion science project eleven countries are involved in. As part of this project, numerous research institutes have been relocated here. These are attracting scientists from all over the world, whereas conditions for researchers in London are becoming more difficult these days. And of course Hamburg is a cost-effective location: the average rent for office spaces amounts to €14.50 per square metre per month, with peak rents at €25.50. This is something London cannot compete with. And the British lifestyle can be enjoyed for free in Hamburg too.

CEO Insight: In your view, who should shortlist Hamburg for any upcoming locational decisions?

Rolf Strittmatter: The people of Hamburg are known for their realistic worldview. We are not a financial hub like Frankfurt but in niche markets we do have the potential of serving as an alternative to the City of London. As a shipping location we certainly have more to offer than London. We can provide businesses from Asia and North America with direct access to the European single market. For research-intensive businesses we also have a lot to offer, and only recently we assisted a British pharmaceutical company in setting up a branch in Hamburg – there were pre-existing scientific collaborations in the region, and the company managed to secure investors here. And gaining approval for a drug within the EU obviously opens up a bigger market than gaining approval in Britain.

CEO Insight: Thank you for your time, Mr Strittmatter.

Tides of Change

Written by Henry Martin on . Posted in FDI

CEO Insight speaks with Pat Ward, Head of Corporate Services, Dublin Port Company

CEO Insight:  How is Dublin Port Company’s Masterplan set to transform the port’s offering?

Pat Ward: Dublin Port Company’s Masterplan 2012-2042 provides a strategic framework for the long-term, sustainable development of Dublin Port. The Masterplan identifies a series of projects for development to transform the port’s offering across cargo, ferry and cruise.

The first major project is the Alexandra Basin Redevelopment (ABR) Project, the largest single infrastructure project in the history of Dublin Port. Currently underway, the project will transform the port’s infrastructure, increasing its ability to handle large ships by deepening and lengthening three kilometres of the port’s seven kilometres of berths. It will also deepen the port to provide an entrance channel with a depth of at least 10m.

Global Gateways to Prosperity

Written by Chris Brown on . Posted in FDI

There are noteworthy developments across the global ports sector right now. CEO Insight profiles three ports which are leading the way on how to do it right, in the process acting as drivers of economic development for the regions they serve.

Dublin Port is fast becoming known as Europe's western gateway, capitalising upon, while at the same time helping to bolster further, Ireland’s status as a premium global destination for FDI. Moreover, it is looking to leverage its credentials to take advantage of uncertainty surrounding the UK post-Brexit, positioning itself as a viable alternative to UK ports.

Global Energy Hotspots

Written by James Brown on . Posted in FDI

These are exciting times for the global energy sector. Until very recently, coal, oil and natural gas looked like they might be slowly heading into the history books, but with the resurgence of the political right, combined with OPEC’s recent restriction on production, investment in the old guard is likely to significantly pick up.

While renewable energy’s seemingly inexorable march to world domination may have temporarily faltered, it remains synonymous with innovation and entrepreneurialism, and with fossil fuels being, by definition, finite, combined with their mostly undoubted associations with global warming, it likely won’t stay down for long.

Renewable energy projects have in recent years been given a sufficiently helping hand through benevolent regulation, tax breaks and subsidies, that their place in the energy mix is now firmly established and assured. Moreover, the likes of hydro, wind, solar, biomass, wave and tidal energy have won the hearts and minds of a critical mass of voters across the globe, to the extent that any government attempting to turn back the clock too far, risks pressing the self-destruct button.

Scotland – “Offshore Pioneers, Developing New Energy Frontiers”

Written by Invest in Scotland on . Posted in FDI

On a windy day, Scotland’s onshore turbines already supply most of its electricity demand. Scotland has been a pioneer of energy and engineering, from the early days of steam, through Clyde ship building, to North Sea oil and gas. Now our people’s expertise and inventiveness are shaping the 21st century energy landscape, with 57% of our electricity already generated from Renewables.

Abundant Resources - the industry estimates there are another 20 billion barrels of oil and gas to recover from the UK Continental Shelf, over the next 30-40 years, worth about $1 trillion currently. Scotland also has 25% of Europe’s wind crossing its landmass and the world’s 2nd most powerful tidal resources surrounding its 12,000km of coastline. On a windy day, Scotland’s onshore turbines already supply most of its electricity demand. Projects like the Beatrice offshore wind farm, Meygen Atlantis Tidal array and Statoil Hywind floating offshore wind, will add to this capacity, creating £ billions of capital expenditure. Further ahead, if more of this huge potential renewable energy off Scotland’s coast can be harnessed, it will also offer energy companies massive export opportunities.

Glasgow: An Investor’s Dream

Written by James Brown on . Posted in FDI

Glasgow, formerly known as the “Second City of the Empire” thanks to its Victorian shipbuilding credentials, is reliving its heyday, but this time things are different, for the success it currently enjoys is built on much stronger foundations. Thanks to a dedicated strategy to make Glasgow the most productive UK major city economy, and initiatives such as the Clyde Waterfront programme which has seen massive regeneration all the way along the River Clyde, Glasgow has undergone a dramatic transformation in recent years, with the result that it now boasts a transport and IT infrastructure befitting the world class city that it is.

Eye’s on Glasgow

Written by Henry Martin on . Posted in FDI

Glasgow is Scotland’s largest city with a growing population of over 600,000 at the centre of a metropolitan area of 1.7 million. It generates in excess of £19 billion GVA per annum and is the fastest growing economy of all major cities in the UK. With a diverse sector base, the city is recognised for its resilience and ability to innovate and reinvent. Glasgow recently launched a new economic strategy with a key strategic objective of making Glasgow the most productive major city economy in the UK. It will look to sectors like life sciences to drive productivity, create high value employment and attract inward investment. Carol Clugston, Chief Operating Officer/College Secretary of Medical, Veterinary and Life Sciences gives her insights into how this might be achieved.

Venezuela and the Curse of Oil

Written by Henry Martin on . Posted in FDI

With Venezuela home to the world’s largest crude oil reserves you’d be forgiven for thinking the country’s people must enjoy a super high standard of living. Sadly, however, due to chronic mismanagement and corruption, the black gold has benefitted a select few only, with ordinary citizens currently wrestling with hyper-inflation, violent crime and food shortages. With the country firmly in the grip of an economic crisis, efforts have been made to boost oil production. Yet, the same shifty dynamics, seemingly hardwired into the Venezuelan political psyche, still stubbornly prevail. Halliburton,

This is perhaps best evidenced by the torrid tale of the state oil company, Petróleos de Venezuela, S.A (PDVSA), having issued a tender for a $4.5 billion dollar Orinoco Belt project. The contract was inexplicably won by an inexperienced and inadequately capitalized firm, Trenaco, despite interest from world industry leaders, such as Weatherford and Schlumberger. As it turned out, only Schlumberger ultimately submitted an offer in time, but this was disqualified by the tender committee on the spurious and nebulous grounds that it "did not accept the conditions and terms of the type of contract”.

Dreams versus Reality

Written by Henry Martin on . Posted in FDI

 Cuba looks like a profitable investment destination, and the Caribbean country is in search of foreign funding to become the new nucleus for global trade.

Home to more than 11 million consumers, it is only 198 nautical miles from the Port of Havana to the Port of Miami, and European businesses have already set up home on the island. But is it still risky business? 

Cuba's communist government first opened to international firms in the 1990’s during the financial crisis instigated by the collapse of the Soviet Union. So far the results have been mixed, with approximately 60% of the foreign investment projects closing down. While the 2011 market-oriented reforms were meant to create a more productive economy, Cuba’s growth from 2011 - 2013 averaged at only approximately 2.3% per year, and dropped to a 1.3% expansion in 2014. Barack Obama’s visit to Cuba last month was the first time a US president visited since Calvin Coolidge in 1928, with many hoping that the island nation’s virtually non-existent foreign business investments would get a kick start. 

"Even if both sides were game, undoing half a century of opposition will be difficult at best."

The President is confident that the U.S. trade embargo on Cuba will come to an end - a move that would go a long way to normalising ties between the two nations, but a conflicting push and pull still exists between the need for capitalism and the preservation of socialism, as Cuba hopes to raise investment while retaining control over its centrally planned economy.  If Cuban leaders continue to drive foreign investment as a means to reactivate their weak economy while simultaneously ignoring some of the factors that hinder that very investment, global market integration will not get off the ground.  The Presidential visit, aimed at developing neighbourly relations, highlighted great business potential and promising economic benefits of trade with Cuba, but don't expect to see a huge U.S business presence there any time soon. Cuba’s willingness to attract external investment has increased, but even with new incentives, many investors still feel uneasy about the potential risks of doing business in Cuba.

Even if both sides were game, undoing half a century of opposition will be difficult at best. However, if the U.S. can lift restrictions and guarantee continued growth through trade and tourism it might encourage the Cubans to ease rules. Nevertheless, companies like JetBlue Airways Corp. and Carnival Corp. are the exception rather than the norm in an economy bruised by a 50 year old U.S. trade embargo, stifling Cuban labour laws and a dual currency system.  However, there is reason for cautious optimism, as some things are already changing.

"At least eight U.S. airlines have applied for approval to offer flights, opening the door for more than 100 flights per day between the U.S and Cuba."

Approximately 60 years after its hotel heyday, Cuban and U.S. hospitality companies are back in touch. Starwood Hotels and Resorts and Marriott International were amongst those allowed to run in Cuba by the U.S. Treasury Department. And on March 19th 2016, the day before President Obama’s significant visit to Cuba, Starwood was the first U.S.-based hospitality group to formally enter the market since the 1959 revolution. The Hotel Inglaterra in Havana will join the company’s luxury collection while the Hotel Quinta Avenida will become a Four Points by Sheraton. Starwood also plans to include Hotel Santa Isabel into its luxury collection.

Cuba, for better or worse, is becoming more accessible and mainstream, as relations between the U.S and the island nation continue to improve. At least eight U.S. airlines have applied for approval to offer flights, opening the door for more than 100 flights per day between the U.S and Cuba. With international interest on the up can the country cope with the commercial storm ahead? Market-oriented reforms and the easing of the U.S restrictions are already helping Cuba get ready for successful economic expansion. But with its multi-layered bureaucracy, an unpredictable legal system and a highly regimented labour market are international companies ready for Cuba? 

So much has changed with the thawing of US-Cuban relations. For investors however, only time will tell if things have stayed very much the same. 




CEO Insight,
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