Global Attractions and Tensions

1
Global Attractions and Tensions

• Working to attract the investment dollars (Euros)

2
Preferred investment destination

• US 1
• China 2
• Brazil 3
• UK 4
• Mexico 5
• Singapore 13 (21)
• Source AT Kearney FDI Confidence Index 2001

3
Factors influencing investment location choice

• Proximity to market
• Right incentives
• Feedstock costs
• Skilled labour
• Labour costs
• Financial
• Logistics
• e-commerce

4
Preferred location for bulk chemical investment

• Middle East
• Qatar
• Iran
• Egypt
• Saudi Arabia

• Asia
• Singapore
• China
• India

5
What are the drivers that have led to the move
towards the Middle East and Asia?

• Mature market in Europe and US
• Increasing legislation
• Rising labour costs
• Rising investment costs
• Rising feedstock costs
• Improvement in investment climate

6
Europe still has its attractions
7
Number of Projects coming into Europe
8
Number of manufacturing /RD projects into Europe
1998-2000
9
What are industrialised European countries doing
to attract investment?

• Proliferation of investment sites
• co-siting
• clustering
• reduced costs
• synergy
• One stop shopping
• Financial incentives
• Ties with universities etc.

10
What does the future hold for Europe as an
investment region

• Increasingly tough competition
• Need to improve offering
• New marketing initiatives
• Benchmarking
• Investors are in a strong position
• Be careful not to exploit this situation

11
A quick look at the UK-The 2001 Capex scoreboard

• Capex in the UK 7.9 of sales
• Capex overseas 9.6 of sales.
• Despite a rise in UK Capex investment the level
  of capex remains below international levels. This
  gap must be closed if the UK is to compete. Lord
  Sainsbury, Parliamentary undersecretary of state
  for science and innovation

Source DTI December 2001
12
Chemicals sector needs to look at investing for
growth

• UK chemical sector has a lower rate of Capex
  investment compared to international levels
• Intensity of Capex as a percentage of sales is
  5.4 in the UK compared to 7.9 internationally
• At 7.3 the UK subsidiaries of overseas companies
  invest at a higher intensity than the UK average
  in the chemical sector

Source DTI December 2001