Germany – Opportunities and Potentials

Maribor 3 December 2015

Germany at a GlanceKey Sectors

Why Germany?

Who we are?Slovene German Business Relations

Germany at a GlanceKey Sectors

Why Germany?

Who we are?Slovene German Business Relations

GermanyFrom “the sick man of Europe”

(The economist, 19.5.2005)

To “Europe´s engine!”(The economist, 11.3. 2010)

To “Germany´s Economic Model: what it offers to the world”

(The economist, 14. 4.2012)

Germany: One of the most productive economies in OECD

Vocational education More important still to Germany's industrial strength is the country's education system.

Lessons learned Mittelstand and family business: the backbone of the German industry

Successful model of export and investment support sheme

Germany: Strengths of the market

Market size Germany has the largest economy in Europe and is Europe´s largest domestic market

Easy access

English widely spoken andaccepted as business language

Situated at the heart of Europe with instand access to established markets and emerging markets in Europe

Doing business in Germany

Mario Ingo SoosDeutsche Botschaft Laibach

Why Germany?

How foreign investors view Germany’s future

• 54% expect Germany to become even more attractive to investors over the next three years

• Becoming increasingly attractive for innovation activities and highly skilled talent

• How surveyed investors see Germany in the year 2020:Global leadership in environmental technologyCentre for research and developmentModel for entrepreneurially minded society

Source: Ernst & Young

“Invented in Germany” High Tech and Innovation:

Innovation clusters: close cooperation between research institutes, the business sector and universities2008: more than 11,000 European patents (twice as many as France and the United Kingdom combined)EU leader in patents that are also registered in the EU, USA and Japan (“triad patents”)German business sectors – global leadersin terms of market size and growth potential:

information and communication technologychemicals and plasticstransport and logisticsphotovoltaicsmedical technology

Source: GTaI

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Germany at a GlanceKey Sectors in Germany

Why Germany?

Who we are?Slovene German Business Relations

Germany at a glance

• Economy boosted by construction and consumption

• Domestic economy intact spending instead of saving

• Manufacturing industry recovery based on exports …..

• …… also thanks to exchange rate

• Consumer industries remain reliable supports

Germany at a glance

• Construction: booming - now more than ever

• Consumption paving the way

• Consumer goods in demand everywhere

• Product innovation gaining in importance

• Concerns about demand increasing• Investment intentions almost stable• Companies want to continue recruiting……but shortage of skilled workers at record levels

Germany at a glance

Source: DIHK- Forecast, GTAI, Statistisches Bundesamt Deutschland

Indicators (Percentage change on preceding year) 2014 Forecast 2015

Forecast 2016

GDP (real) 1,6 1,7 1,3GDP by expenditure (real):Private consumption expenditure 0,9 2,0 1,5Machinery and equipment 3,5 4,0 2,0Construction 2,9 1,0 2,0Domestic Demand 1,9 2,1 2,2Export -Growth rate 4,0 5,0 3,5Import -Growth rate 3,7 6,0 4,5

GDP per Head (EUR) 35.237

36.500

Unemployment rate in % 6,7 6,4 6,6

Germany at a GlanceKey Sectors in Germany

Why Germany?

Who we are?Slovene German Business Relations

Key Sectors in Germany

• Automotive

• Machinery & Equipment

• Metal and Metal Processing Industry

• Food & Beverage, Organic Food

• ICT Industry

• Energy & Environmental Industry

• Construction Industry

Renewable Energies & Resources

- Photovoltaics

- Energy Efficiency

- Renewable Resources and Bioenergy

- Energy Storage and Fuel Cells

- Solar Thermal Energy

- Geothermal Energy

- Wind Energy

- Waste to Energy, Recycling and Sustainable Water Resource Management

Chemicals & Healthcare

- Chemical Industry and Polymers

- Chemicals-Related Process Industry

- New Materials/ Composite Materials

- Red Biotech

- Medical Devices Industry

- Pharmaceuticals Industry

Service Industries

- Consumer Goods/Retail

- Food and Beverages

- Information and Communications Technology

- Business Services

- Transportation and Logistics

- Tourism

Mechanical & Electronic Technologies

- Electronics and Microtechnology

- Machinery and Equipment

- Transportation and Technologies

- Applied Sciences and Technology Transfer

Growth Industries

Germany Trade & Invest

Emerging IndustriesEnergy Efficiency SectorCreating the Future for a Clean Environment

Industry & Market Numbers• market leader in energy efficiency

technologies• turnover of about EUR 67 billion per year• double-digit growth rates expected in coming

years• 1/3 of companies active in the sector realize

profit margins of over 10%• average workforce growth of about 15% per

year

• The construction industry is one of the most important sectors of the German economy

• Germany’s Construction Industry: Strong Growth Followed by Stagnation

• Construction Work on Existing Buildings Dominates• Total market volume: 312,7 bill EUR• Residential construction: 179 bill EUR• Energy related modernization: 57,5%

Construction industry

ICT Industry Germany's ICT Industry: Shaping Europe’s Digital Future

• Europe’s largest ICT market in terms of revenue volume (20 percent of total EU market volume).

• With 5.5% global market share, German ICT industry is ranked fourth worldwide.

• Turnover of EUR 137 billion• Germany’s ICT industry employs a workforce of around

850,000

Industry & Market Numbers

ICT Industry Germany's ICT Industry: Shaping Europe’s Digital Future

Cloud Computing: There is significant international demand for secure and cost-effective cloud solutions and services

Growth Areas

Smart Grids: Increasing importance of sustainable energy supply offer great opportunities for smart grid adoption and ICT solutions for smart grid.

IT Security: The market for IT security is growing due to steadily increasing risk potential

Industrie 4.0

Germany’s continued role as one of the world’s most competitive and innovative manufacturing industry sectors.

Germany’s technological leadership in industrial production research and development.

SMART PRODUCTS

SMART INDUSTRY

SMART FACTORY

Automotive IndustryDriving Performance through Technology

• Europe's largest automobile market• Average manufacturer and supplier turnover of more than EUR

300 billion • 30 final assembly plants with a production capacity of over one

third of total automobile production in Europe• The German auto industry invest annually EUR 19.6 billion in

R&D• 3,650 patents per year (= 10 patents a day9

Industry & Market Numbers

Market Potential• Germany has a very competitive auto parts market with

many domestic and foreign manufacturers

• Suppliers are mostly specialized

• New Automotive Deal

• Consolidation process-oriented sectors

• Just in Time Just in Sequence <Industry 4.0

• After sales market is expected to grow in the coming years

Automotive Industry

Automotive IndustrySmart MobilityElectric mobility is the technology of the future but existing technologies must be optimized

Opportunities for Automotive SuppliersThe demand for new technology for this market is enormous

Vehicle manufacturers require core components such as batteries and electric motors for electric.

Machinery & Equipment IndustryMarket Leadership Powered by German Engineering

• Annual turnover 173 billion Euro • Growth rates between of 7 and 12 percent• Domestic market: 87 billion Euro • Highly innovative sector producing 28% of the worlds

mechanical engineering patents• Technical fields with high import rates: drive technology

(10.7%), air technology (9.3%), valves and fittings (6.7%), construction equipment (6.2%)

Industry & Market Numbers

Machinery & Equipment Industry

• Imports: EUR39.1 billion

• One of the fastest growing industry sectors in Germany • High domestic demand from industries like the automotive,

electronics, chemicals, food as well as the renewable energies sector

• very attractive to foreign companies seeking to sell their high-tech products and components abroad

.

Market Potential

Metal & Metal Processing Industry

• Metal and metal products imports totaled EUR 68.7 billion

• Sixty two percent of the imported metal products came from the European Union

• The non-ferrous metal industry registered sales of EUR 43.5 billion

Industry & Market Numbers

Plastics IndustryGermany is Europe's No.1 Plastics Location

• Leadership in plastics production and consumption, export and import, and in investment in fixed assets and expenditure in R&D

• Turnover EUR 88 billion, 7,200 companies, 440,000 employees• About 70 application-oriented university and non-university

research institutes in the field of polymer and materials research in close collaboration with the plastics industry

• Over 40 regional plastics clusters, innovative networks and competence centers

Industry & Market Numbers

Electronics & MicrotechnologyYour Market for Next-Generation Technology

• Turnover of 165 billion Euro• Market is estimated to grow to 180 billion Euro • Fourth largest industry segment in Germany by revenue • 12 billion Euro R&D expenses annually• Microelectronics is one of our fastest-growing industry sectors• market potential for automotive and industry electronics

Industry & Market Numbers

Energy & Environmental Technologies

Bioenergy Industry

Solar Industry

Wind Industry

Environmental TechnologiesClosed Loop Recycling and Sustainable Water Technologies

Environmental technologies is one of the most important economic sectors in GermanyTurnover: 85 billion Euro in German World Market Share for Recycling Technology: 24% (Material Separation devices have 64% of the world market)More than 320,000 Employees

Industry & Market Numbers

Consumer Goods & RetailLarge Markets Create Major Opportunities

• Europe's leading consumer market with 82 million affluent consumers

• Private spending remained increasing• Private spending in the leisure and apparel segments is

permentently growing due to higher private income• Germany's consumer electronics market fasted growing

segment

Industry & Market Numbers

Food & Beverage IndustrySupplying the Full Spectrum of Consumer Needs

• Germany is Europe's second largest food producer with sales of 149.5 billion Euro

• Germany is a net importer of food & beverage products• Largest sector sub-segments: meat (22.7%), dairy (15.4%),

confectionery food (9.4%), and baked goods (8.7%)• Major national and international players, including Dr. Oetker

Group, Südzucker AG, Vion Food Group, Kraft Foods Deutschland GmbH, Nestlé, etc

Industry & Market Numbers

Food & Beverage IndustrySupplying the Full Spectrum of Consumer Needs

• High demand for health and wellness as well as functional food products to prevent or overcome conditions including diabetes, high blood pressure and cholesterol

• Movement for organic food and “free of” foods e.g. lactose and gluten-free products

• Driving demand for highly convenient foodstuffs including ready-to-eat meals, frozen foods, desserts, and baked goods

• Ethnic foods, beauty foods and fair trade products

Market trends

Germany at a GlanceSlovene German Business Relations

Why Germany?

Fit for Business

How to find a partner?

Slovenian-German Economic RelationsGerman-Slovenian foreign trade balance (in 1000 EUR)

Source: Statistical Office of the Republic Slovenia

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

-1,000,000

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

Export to Germany

Import from Germany

Saldo (Exports-Imports)

Source: Statistical Office of the Republic Slovenia

1000 EUR2014

1000 EUR2014

CountryImport share

(%) Import Country Export Export share (%)

Total 22.580.164 Total 22.935.649

Germany 18 4.139.367 Germany 20 4.602.449

Italy 16 3.679.738 Italy 12 2.736.650

Austria 12 2.623.178 Austria 9 2.075.800

Croatia 5 1.084.053 Croatia 8 1.774.997

Hungary 4 1.030.928 France 5 1.170.476

France 4 834.315 Russia 4 996.698

Market share of German federal states in Slovenian exports to Germany

Market share of German federal states in Slovenian imports from Germany

Slovenian-German Economic Relations

18%

16%17%

5%

5% 8%

Baden-WürttembergBayernNordrhein-WestfalenHessenNiedersachsenNeue Bundesländer

31%

22%20%

5%7% 8%

Baden-WürttembergBayernNordrhein-WestfalenHessenNiedersachsenNeue Bundesländer

Source: Statistical Office of the Republic Slovenia

Germany at a Glance

Slovene German Business Relations

Why Germany?

Who we are?

Key Sectors

The German Chamber NetworkGlobal network in 80 countries with 120 offices

•98% of the German foreign trade

•50,000 member firms

•1,700 coworkers

AHKs as official representation of German industry and commerce

AHKs as member organizations

AHKs as service providers to companies

“AHK – worldwide competent on-site”

Our Chamber: Membership Growth

Founded: 2006

First bilateral Chamber of Commerce

12 Employees (German-Slovenian)

2006 2007 2008 2009 2010 2011 2012 2013 20140

50

100

150

200

250

0

20,000

40,000

60,000

80,000

100,000

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160,000

180,000

55

114

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227236

Anzahl/število

Erträge/prihodki

WCM

ACTIVITIES

Round tables with politicians

Trade missions

Company Visits

Industry 4.0.

Deutschlandforum

Best Practice Meetings

TOP

International Business Drink

Trade Fairs

ConferencesSymposia

Summer picnic

Der Deutsche Ball

.

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Fact-Finding Missions to Germany

Workshops Market Entry Germany

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How to become a member?

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ahk@ahkslo.si

Gertrud Rantzen Predsednica

Telefon: +386 1 252 88 63 E-Mail: gf@ahkslo.si http://slowenien.ahk.de