The Netherlands
Prime Moves
A publication of the Netherlands Foreign Investment Agency | May 2011 | UK & Ireland Edition
Full speed ahead The indications are that the Dutch economy is emerging from recession in good shape and the latest news is that the Government has robust plans to make nine significant business sectors even stronger. Was George Osborne right when, in his recent budget speech, he named the Netherlands as one of Europe’s most competitive countries? Recent economic indicators seem to show that he was and that the economic situation in the Netherlands is improving at a steady pace, fostering a sense of confidence and optimism. According to the Bureau for Economic Policy Analysis (CPB) the Dutch economy grew by 1.8% in 2010 and it anticipates a further 1.75% growth in 2011. Much of this is due to an improved outlook for manufacturing – production was up 6% in 2010. Exports in the final quarter of 2010 also rose by 11% on the same period in 2009. These positive figures, coupled with a relatively low inflation rate of 2% and one of the lowest unemployment rates in Europe (4.3%), have helped business and consumer confidence to rise to their highest levels in three years. It is perhaps the budget deficit figures that are most significant. In the Netherlands these are expected to fall rapidly from 5.4% of GDP in 2010 to 3.7% in 2011 and 2.2% in 2012.
Strengthening key sectors of the economy In February the Dutch government announced plans to invest hundreds of millions of euro into nine key sectors of the economy from 2015 and to offer €500 million in tax breaks to small businesses. Economic Affairs Minister, Maxime Verhagen, said: “The cabinet has selected nine areas where the Netherlands is particularly strong because of its history and geography... Teams of experts, including a government representative, will be charged with advising the Minister on the exact distribution of funds.” The nine sectors are: water, agri-food, horticulture, high-tech, life sciences, chemicals, energy, logistics, and the creative industries. The money will be allocated to various projects designed to improve infrastructure, remove trade barriers and reduce red tape. Additionally, the top teams will focus on the knowledge centres and work on improvement in knowledge and skills in all sectors. An Innovation Fund will also be set up to attract more entrepreneurs and encourage R&D. Small, innovative companies will be able to borrow capital for certain business ventures and benefit from tax breaks.
Contents
2010: A good year for foreign investment
2
Focus on Logistics
NFIA News
5
Prime Moves
6
3-4
Activities: share headquarter activities doubled Nearly 40% of realized projects in 2010 is related to marketing & sales activities, largely more than the 2009 share (31%). The share of European distribution activities was substantially lower than in 2009 (21%). By contrast, the share of international headquarter activities in the total number of projects increased from 9% in 2009 to 17% in 2010.
Over two thirds of the 58 marketing & sales projects originated from Asia, with Korea as a front runner (14), followed by China (9) and Japan (7).
2010: A good year for foreign investments in the Netherlands “...an increasing share of FDI coming from emerging markets... a strong growth in the number of headquarter activities and many projects in the priority areas of the Dutch economy ... these are positive trends I wish to embrace and stimulate further during 2011.” Henk Bleker, Minister for Foreign Trade
Number of projects in 2010 by figure 15: activity (> 5 projects per activity) number of projects in 2010 by activity (> 5 projects per activity marketing & sales 9%
headquarter activities
6% 6%
38%
European distribution
8% R&D 16%
service center 17%
10 8 Foreign companies play a major role 5 1 in strengthening the Dutch econ1 0 omy Asia– a role is highly valued South Europe that North Middle America America East and well-supported by the Dutch government.
9
production
The global economic recovery that we all hoped for stalled in many countries in 2010. Despite this, Foreign Direct Investment (FDI) in the Netherlands remained strong. The NFIA actively supported 155 projects totalling €956 million and directly attracting or securing almost 4,000 jobs.
The NFIA’s portfolio is filled with a figure 16: variety active projects theoffirst number of of marketing & sales projects in 2010for by region origin Figuur 16 quarter of 2011. Many of these are 45 in the ICT sector but there are also 39 40 some capital intensive projects in 35 the energy and chemical industries 30 as well as medical technology, in25 dustrial engineering, food, transport 20 and logistics. 15
other
Based on the amount of money invested, the top five sectors were: ICT, electronics, food, chemicals, and energy. The ICT sector was the one in which most projects and the highest investment amount were A significant development was that scored. The high investments were more than half of the projects origiparticularly related to capital-innated from Asia. Ten years ago this tensive data centre projects. The Sectorsfigures also show that the creative share was less than 30%. In addition, international headquarter activities industries are an important sector, almost doubled from 9% of projects particularly in terms of job creation. in 2009 to 17% in 2010. Again, more Again, the ICT sector was the sector in which most projects The United Nations Conference on than half of these projects originatand the highest investment amount were scored. The high Trade and Development (UNCTAD) investments were particularly related to capital-intensive datais ed from Asia but the figure also inpredicting that increasing business center projects. The chemical sector provided most jobs, cludes the new International Baccamostly employment retentionwill in this particular The ICTin confidence lead to anyear. upturn laureate headquarters in The Hague sector on theglobal other hand, provided most new jobs. FDI for 2011. However, there and confirms the Netherlands posiare still risk factors, such as a fragile tion as a top location for internationrecovery and unrest in various parts al headquarters. of the world. Sales and marketing activities and Top 5 sectors in number of projects for 2010: European Distribution Centres account for a large share of foreign Sector investment. In the logistics sector, 1. ICT whilst there were some major in2. creative industry 3. electronics vestments in setting-up in-house 4. health warehouses, almost half of all dis5. industrial engineering tribution activities are outsourced.
“International trade and foreign investments are important pillars underpinning Dutch prosperity. Some 6,000 foreign companies are currently active in the Netherlands, providing 782,000 jobs and accounting for 30% of R&D investment.” Henk Bleker, Minister for Foreign Trade
# projects 22 16 14 14 14
Top 5 sectors in € million for 2010: Sector 1. ICT 2. electronics 3. food 4. chemical sector 5. energy
2010: A good year for foreign investment | page 2
€ million 351.2 184.9 119.0 66.8 62.5
13
An ideal location for European and value-added logistics The Netherlands was ranked 4th in the world, in the World Bank’s 2010 Logistics Performance Index (LPI) and was highly rated in the latest Buck Consultants/Ernst & Young benchmarking study. The logistics sector is the backbone of international trade and comprises an array of activities from warehousing and transport to border clearance, payment systems and cargo security. In the Netherlands, in particular, there is a strong emphasis on the value-added elements of logistics such as innovative solutions to packaging, processing, pricing, management information, customer support and reverse logistics. According to Buck Consultants and Ernst & Young the Netherlands scores particularly well in a range of areas crucial to competitive logistics: • Transport and technology infrastructure “The Netherlands is the logis-
• Geography – half of Europe’s major markets are within 400 miles • A highly skilled, flexible and multi-lingual workforce • A business friendly environment • A logistics sector that is already well developed • Flexible and efficient customs • Supply chain sustainability – with the option to switch from road to lower footprint rail, short-sea and canal transport • Competitive costs – particularly total supply chain costs due to proximity to markets.
Adding value to fast fashion The logistics process is complex in the increasingly competitive market of fast fashion chains such as Zara and Abercrombie & Fitch. Different styles, colours and sizes need to be distributed rapidly and the ability to react quickly to changing consumer
tics gateway to the European market. Besides the central location in the heart of Europe’s main consumer markets, the excellent seaport and airport facilities and advanced and extensive infrastructure, the Dutch logistics industry is well-developed, making the Netherlands the ideal location to service European customers.”
Buck Consultants and Ernst & Young benchmarking study: High quality, competitive costs, November 2009 Source: Europe Container Terminal BV, Rotterdam
Focus on Logistics | page 3
demand and reduce supply chain costs is crucial. Distribution centres can provide an extensive range of logistics services including payments, Pan-European mail/online orders and reverse logistics. The Netherlands is grabbing an increasing share of the market for fast fashion European Distribution Centres including: M&S Mode: 468 stores in the Netherlands, Germany, Luxembourg, France, Italy, Belgium and Spain are serviced from the 110,000 square foot outsourced distribution centre in Amsterdam. Forever 21: Fulfils own store and web deliveries across Europe from its new outsourced distribution centre in Bergen op Zoom and European HQ in Breda. There is a strong emphasis on value-added activities such as repacking, sorting, labelling and pricing.
Farm-to-Fork efficiency The Netherlands is a leading location in the agricultural logistics industry. Major Greenports transport products such as bananas, palm oil and flowers to many locations via the excellent infrastructure. The Ports of Rotterdam and Amsterdam and Amsterdam Schiphol Airport are well connected mainports and there are Greenports, such as Venlo, further inland. The Netherlands also has a long tradition in food research and agrilogistics research. Institutes such as Food Valley research food preparation, processing and packaging services to improve output and reduce operating costs. Recently, agricultural entrepreneurs, logistics companies, research centres and universities in the Netherlands have joined forces to pro-
NNR Global Logistics sees the Netherlands as “the gateway to Europe.” In October 2010 NNR, a subsidiary of the Japanese Nishitetsu Group and one of the world’s top 25 logistics services providers, opened a new warehouse and offices in the Fokker Logistics Park run by the Schiphol Area Development Company (SADC). As Chris Coombe, NNR’s MD in the Netherlands, explains: “There is simply no other European country that possesses an infrastructure comparable
Focus on Logistics | page 4
Source: Unilever
vide innovative solutions to improve logistics efficiency. This Agrologistics Platform stimulates innovative projects initiated by the agricultural industry to improve the effective-
ness and the sustainability of the logistics of agro-products and animals.
to that of the Netherlands and, as such, can truly function as a gateway to Europe.”
even the Customs department was helpful – on their own initiative, they even translated documents into English for us! In 12 months’ time we will definitely start looking at further expansion in the Netherlands.”
The NFIA provided Chris with the initial information and data he needed and put him in touch with the Holland International Distribution Council (HIDC), an association that provides international shippers with advice, practical help and targeted matchmaking to set up or restructure their European distribution services. “The support we received from the NFIA and HIDC accelerated and simplified the entire establishment process”, says Chris. “I could always contact them with questions and if they couldn’t help they put me in touch with someone who could. Moreover, the information was always neutral and objective. In fact,
Together with the NFIA, HIDC (Holland International Distribution Council), which represents the logistics sector in the Netherlands, helps international companies make a smooth entry into the European market through the region’s leading gateway, the Netherlands. More information on www.hidc.nl.
NFIA News
Director’s Cut
NFIA on social media Quick and easy news on the Netherlands can now be found on Twitter and NFIAtube. With communication now happening at a different speed, the NFIA is keen to cater to news hungry executives. We provide upto-date opportunities for companies within the UK & Ireland by showcasing new government policies and interesting facts on the Netherlands. Additionally, we publish news on the Dutch economy and testimonials of recent investors. Follow us on www.twitter.com/NFIALondon.
Liesbeth Staps, Executive Director NFIA UK & Ireland, shares her views
UK-NL Strategic Business Dialogue When British Deputy Prime Minister, Nick Clegg and Dutch Deputy Prime Minister Maxime Verhagen met in November 2010, they recognised the synergy in the economic ambitions for the UK and the Netherlands and the value of acting collaboratively where possible. The UK-NL Strategic Business Dialogue (SBD) emerged from these discussion on how the
NFIA News | page 5
UK and the Netherlands can deliver tangible trade and investment results together. The SBD will build on the already strong trade and investment relationship by organising bilateral business meetings on energy, food and the creative industry. The first working conference was held on Tuesday 5 April.
The Dutch economy is making the most of the increased momentum in world trade since November. And, we feel that the economic prospects for 2011 are looking better than ever. The UKNL Strategic Business Dialogue has kicked-off successfully with the aim of building on one of the most important economic relationships for both our countries. From our side, we aim to show UK-based companies that the Netherlands can be an excellent base to succeed throughout the continent. The Dutch government has also committed to further strengthening the economy with a new business support policy, focusing on nine key industries and working together with business and knowledge institutes. NFIA UK & Ireland will facilitate all of these opportunities with activities on agri-food, energy and logistics throughout 2011. The NFIA will continue to provide information on any developments in the Dutch economy to companies with interest in and already operating in the Netherlands.
Prime Moves Japanese based Mitsubishi Aircraft Corporation announced the establishment of a whollyowned subsidiary in Amsterdam, to function as its sales base for Europe. Freedom Innovations California-based producer and distributor of advanced prosthetic solutions, opened its European headquarters in Enschede. Helly Hansen, Norwegian highend outdoor clothing company expands their European distribution operations in Limburg, the Netherlands. The move is a result of the company’s growth and also a consolidation of activities.
Meet the NFIA Online - Webinar, Thursday 19 May 2011 International Logistics from a European perspective Manchester - Seminar, Thursday 9 June Logistic Challenges in the Agrifood Supply Chain London - Roundtable, Tuesday 14 June Streamlining your pan European pensions challenge Throughout the UK - Logistics Roadshow, 4 -7 July Logistics Roadshow with the HIDC and the Brabant Development Agency Aberdeen - Reception, 6-8 September Offshore Europe on the Clipper Stad Amsterdam More information can be found at www.nfia.co.uk/events.html
US-based Helmer, manufacturer and worldwide distributor of cold-chain storage products, expands global operations in Europe with distribution in the Netherlands. The new facility will allow greater logistical efficiencies in expected growth in European product volumes. The social networking site Facebook has opened a marketing & sales office in Amsterdam to support its rapid business growth in the Netherlands. Joint venture CXS, with UK CPS, serves the Benelux countries from the Netherlands with Microsoft and SAP solutions. CXS: “Microsoft fully supports and endorses the new venture and we are very excited to be working with the highly-skilled CXS team.”
Source: Keukenhof
Netherlands Foreign Investment Agency The Netherlands Foreign Investment Agency (NFIA), an operational unit within the Dutch Ministry of Economic Affairs, Agriculture and Innovation provides assistance to companies interested in setting-up, expanding or restructuring their pan-European operations in the Netherlands. The NFIA is here to assist you at every stage of your strategic decision making by offering a combination of information, advice and practical help. Free of charge, without obligation and on a confidential basis. While information in this newsletter has been compiled from reliable sources, the Government of the Netherlands takes no legal responsibility for any of the statements made. Articles in this newsletter may only be reproduced with permission of the Netherlands Foreign Investment Agency.
Editorial: Wendy Sayer
NFIA UK & Ireland 38 Hyde Park Gate London SW7 5DP United Kingdom T: +44 20 7225 1074 F: +44 20 7584 3396 info@nfia.co.uk www.nfia.co.uk www.twitter.com/NFIALondon