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Photo Cover: Detail of Spain’s Pavillion at Expo Shanghai 2010, photo courtesy of SEEI: Sociedad Estatal para Exposiciones Internacionales, www.expo-int.com, Architect: Benedetta Tagliabue (Miralles Tagliabue EMBT)

Spain will dazzle at Expo Shanghai 2010

Report produced by NastaONE, published in The Economic Observer on February 1st. 2010 This report can be read online at www.nasta-one.com and www.eeo.com.cn Project Director: Patricia Pal Art & Layout Director: Manuel Lariño – www.mlarino.com English Translation: James Richard Thomas Southeran

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BusinessONE: SPAIN

Index

ICEX Ángel Martín Acebes

MADRID GLOBAL FUNDACIÓN MADRID CIUDAD GLOBAL 2010 Ignacio Niño Pérez

VCI Antonio Lis

FERIA ZARAGOZA CÁMARA DE COMERCIO DE ZARAGOZA TAIM WESER Manuel Teruel

AJUNTAMENT DE BARCELONA Jordi William Carnes

GAMESA Jorge Calvet

DANOBATGROUP Rafael Barrenechea

USP HOSPITALES Gabriel Masfurroll

MAPFRE Alberto Manzano

MARQUÉS DE CÁCERES Cristina Forner

www.icex.es www.spainbusiness.com.cn

www.munimadrid.es www.madrid2010.org

www.vci.com.es

www.feriazaragoza.es www.camarazaragoza.com www.taimweser.com

www.bcn.cat

www.gamesacorp.com

www.danobatgroup.com

www.usphospitales.com www.fundacionalex.org www.gabrielmasfurroll.com

www.mapfre.com

www.marquesdecaceres.com

BusinessONE: SPAIN

Introduction

“While the world deals with the devastating global financial crisis, China has staged a spectacular recovery in record time and maintained growth of around 8.9%.”

“At Expo 2010 Shanghai, Madrid, Spain's capital, will be the only Spanish and Hispanic city with its own pavilion, and is eager to show the spectacular transformation it has undergone recently to China and the world.”

In the context of leading world cities, how would you define the competitive and differential advantages of Madrid?

Ángel Martín Acebes Executive Vice-President ICEX Spanish Institute for Foreign Trade www.icex.es Ángel Martín Acebes, Executive Vice-President of the Spanish Institute for Foreign Trade, discusses China's importance as a market for Spain and ICEX's activities in the Asian giant.

“This year may well see China continue its unstoppable rise in the global economic ranking to become the second-largest economy, only behind the United States and already ahead of Japan. China is one of the most important strategic markets worldwide and we have identified it as a priority to promote and support the presence of Spanish companies.

China is where we undertake the highest number of activities every year: we organise the participation of Spanish companies in almost one trade fair a week, meaning more than 50 fairs year-round across all sectors.

At present, there are almost 600 Spanish companies working in China, when, five years ago, there were not even 100. Today, close to 2,000 Spanish companies regularly export to China, which shows that, from an economic point of view, Spanish business is demonstrating a growing interest in the Asian giant.

We should also highlight that, from a political and institutional point of view, Spain and China have a magnificent bilateral relationship.Our relations greatly intensified with the celebration of the Year of Spain in China in 2007 and, since then, activities and bilateral forums have taken place one after another, with especially important high points recently like CISMEF last September, where Spain was the invited country, at which 200 Spanish companies were in attendance, as well as the recent opening of a new Spanish economic and trade office in Canton, joining those already present in Beijing, Shanghai, and Hong Kong, and the Tianjin Summit, one of the biggest events undertaken last year.

As a result, since the celebration of the Year of Spain in China in 2007, we have significantly increased the number of activities Spain is carrying out in the Asian giant.

It is true that the history of our respective countries has not converged until recently and, therefore, we have lots of ground to cover, but there are important similarities in both nations in the process of evolution we have undergone over the last 30 years.

In December 19th, 2008, China celebrated the 30th anniversary of its landmark reform and opening-up drive.

Our constitution is also 30 years old, dating from when our transition began, and the element we share is that, for Spain as well as for China, the opening up of our economies has clearly been a catalyst for economic progress and development.

Spain is a success story in terms of how 30 years have seen it transformed from a highly regulated, controlled and closed economy, with a large industrial public sector, into an economy in which the market has become the fundamental means to assign resources. This has been reflected in Spain's spectacular economic progress, especially since we joined the former European Economic Community, today's European Union, in 1986.

And I believe that China's incorporation into the WTO, the World Trade

Organization, represents a before and after that shows how economies which open up to overseas trade undergo progress and development.

We have a very interesting agreement with the Chinese Communist Party's Central Committee School, which we have been working on for the last three years and through which over 100 Chinese teachers have already come to Spain to see the reality of our nation, our strengths, and our achievements of reference on the international stage, such as the high-speed rail system and renewable energy.

Thanks to this agreement, we have discovered common areas of interest that we have begun to develop, the most recent being a workshop we organised in Beijing about the role of regulatory bodies in the workings of the economy at which the President of the National Competition Commission, the president of the National Communications Commission and the Vice-President of the National Energy Commission from Spain were all in attendance.

This demonstrates that China is interested in learning how economic sectors can be regulated. The previous workshop, which also provoked lots of interest among our Chinese colleagues the year before, was about what they call the circular economy in China and what we call the green or environmental economy here.

On the other hand, Spain is well known as the leading investor in Latin America, an area where Spanish companies are leaders in sectors such as power generation, the financial system or the insurance industry. This is also one of Spain's strengths that could become very useful to China, because, logically, there is huge potential for cooperation with Chinese global companies interested in that market.

Spanish companies are recognised leaders in sectors like infrastructure, renewable energy, water management, consumer goods, medical technology, and also the fashion industry. For example, three out of every five planes flying around the world use a Spanish air-traffic control system, six of the top ten leading infrastructure businesses worldwide are Spanish. We are the third most important country globally in installed wind power and second in solar energy, and are among the top four nations worldwide in water management, treatment and desalination.

We have a Spanish concessionary model that we would like to see tried in China. It's a public-private cooperation model applied to the infrastructure area, in which private companies design projects, get financing, build and manage, and, in exchange, are awarded with compensations by public authorities.

Thanks to this concessionary model in Spain, Spanish infrastructure companies are winning important contracts to develop projects in the United States.

China is a country with a huge demand for infrastructure development and, as a result, we can also see huge potential for cooperation in this sector.

That same potential could also apply in the renewable energy sector, where Spain could provide lots of added value in the development of new energy sources in China”.

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I.N.: In the last 10 years, Madrid has undergone a comprehensive process of modernisation, revitalisation, and regeneration which has transformed it into the European Union's third metropolis, with a very dynamic economy and above-average growth levels in the Euro-zone.

Madrid is a good urban reference for large emerging cities: its economic development has given rise to a solid business culture. For example, six companies here are among the leaders in the global ranking of infrastructure concession operators worldwide, and we have created first-class infrastructure, such as the Metro network, the local train and high-speed networks, Terminal 4 at Barajas airport, the Madrid Rio project, or the new M-30, the modernisation and upgrading of which has become an international case study.

Madrid enjoys a privileged geo-strategic location which has strengthened it as a natural gateway to the European, Latin American, and North African markets. It is the headquarters of research centres and leading companies worldwide in engineering, construction, and renewable energy. In fact, our city is the cradle of wind power and solar energy, and large turbines installed worldwide to reduce CO2 have Madrid in their DNA. But Madrid's current strengths are still not sufficiently known internationally, and the perception of the city overseas is much poorer than its reality: it is time to show the world all the city has to offer.

And that is precisely the aim of Madrid Global and the Madrid Global 2010 Foundation, one of the city council's most significant objectives.

I.N.: That's right. When Alberto Ruiz-Gallardón was re-elected Mayor in June 2007, he put promoting the image of Madrid internationally among his first priorities, to let the world know about the drive and competitiveness of a revitalised city, ready to compete among the 21st century's best cities.

To do so, he created the Strategy and International Action Office of Madrid Global, among other initiatives, whose mission is to promote Madrid's strengths internationally through the development of various strategic activities and relationships with other cities, bodies, and international opinion leaders.

And the strengths the city of Madrid has are also those of its companies: we are working hand-in-hand with bodies like the Asian Development Bank to ensure some of the best practices Madrid has introduced in recent years, like the Metro and other cutting-edge infrastructure, can be copied in other cities worldwide which are undergoing improvement.

The companies who made this great transformation possible in Madrid can also undertake those projects and new ones in cities elsewhere around the world, including, of course, Chinese cities, applying their knowledge, experience, technical abilities, and know-how, and that is what we want to convey at the Shanghai Expo. Furthermore, Madrid will be present at Expo Shanghai 2010, - which, for the first time in history, is enabling cities to participate -, thanks to awareness of the importance that urbanisation processes have in the global arena.

How did the opportunity for Madrid to have its own pavilion at the Expo come about?

I.N.: In the launch project for the Shanghai Expo, for the first time in history and under the slogan “Better city, better life”, the world was informed that the theme of the exhibition would be dedicated to cities, and that a select number of cities would be chosen to be present in the Expo with their own pavilions, aside from the pavilion of their respective nations.

The selection would be based on the proposals each city made in terms of urban development and sustainability, so we immediately realised we had a great opportunity to realise our strategic goals: achieving greater international recognition and, with that, new business opportunities and new

alliances to reinforce our competitiveness. If we could get Madrid selected, we would reach a huge audience in China, in the whole Asia-Pacific region, and, by extension, to the rest of the world. So we started to work with lots of enthusiasm and were able to get Madrid chosen as one of the 13 world cities, and the only Spanish one, to be at the Expo with its own pavilion.

This represents a unique opportunity to position Madrid's image in its rightful place, so Madrid-based companies begin to gain weight in the Chinese marketplace, so our business schools, which are recognised worldwide, are promoted in Shanghai, so our universities attract more Chinese students, and, in summary, so Madrid's message to the world multiplies through communication of unprecedented reach and effectiveness.

It's worth highlighting that, in the selection process, Madrid was up against 188 other cities from around the world, and being selected not only demonstrated acknowledgment of good urban practices in our city, but also showed what Madrid would be doing in Shanghai interested all of China, and the rest of the world, as Shanghai 2010 is a global showcase to give our city unprecedented visibility.

Madrid won its place with its own pavilion thanks to the truly interesting urban transformation process it has undergone in recent years, which has been called exemplary by bodies like the OECD, due to spectacular improvements in infrastructure, mobility, services, and the efficient operation of the city.

We summarised that transformation, in a phrase which echoes that the Expo itself uses: “A renewed city for a better life,” conveying values like equality, innovation, and sustainability which have significantly improved the quality of life of our citizens.

And Madrid's pavilion captures those concepts through the Bamboo House and the Air Tree I.N.: Exactly. Madrid's pavilion will represent a tour of the city, under the slogan “Madrid is your home”, and in each area there will be real ideas, views, and spaces from the capital: in the lobby there will be infrastructure like the local and high-speed train networks (Cercanías and AVE), and the M-30; in the corridor will be pedestrian streets; in the kitchen, Mercamadrid will be explained, as well as Spanish cuisine and products; the sitting room will be the cultural and leisure centre, with museums, our cultural heritage, nightlife, and theatres; and, in the bathroom, we will show the latest water and energysaving technologies.

The slogan for Madrid's pavilion is: “Madrid is your home,” inspired by the character of the city's people, their hospitality and vitality, which by extension is also the essence of Madrid: a vibrant and, above all, welcoming city, able to make any visitor feel at home.

Two structures will be highlighted in the pavilion, both models of urban ecology and respect for the environment: the Bamboo House and the Air Tree.

The Bamboo House is a good example of how Madrid uses innovation to cut

Ignacio Niño Pérez C.E.O. Office of International Strategy and Action MADRID GLOBAL & Executive Board Member of MADRID GLOBAL CITY 2010 FOUNDATION www.madrid2010.org www.munimadrid.es/madridglobal

energy costs. As its name indicates, it is covered in bamboo which, as well as adding an original element to the landscape, provides the building with thermal, acoustic, and visual protection from the rain and wind in winter, and from Madrid's high temperatures in summer.

The replica of the Bamboo House in Shanghai will also be covered in bamboo, although not completely to adapt to the climate and conditions of Shanghai. It will have a 600m2 footprint, be 18 metres high, and will have a total surface area of 2,400m2.

Its public spaces will illustrate the development of social housing in Madrid and major urban transformation projects citywide.

The Air Tree, based on the bio-climatic trees in the Vallecas Eco-Boulevard, will be sited in a patio as an open area and meeting point, and will harness energy from the wind to generate electricity, thanks to small turbines. It will change appearance depending on climatic conditions, to show the different options that cities have to save energy. Madrid's pavilion will also be located between Shanghai's – which will bring a huge flow of visitors, as it is the host city pavilion – and London's, which is also a clear representation of Madrid's objective to be on the same level with some of the best cities in the planet.

What kind of achievements do you foresee being reached as a result of Madrid's presence at the Expo, both globally and particularly in China?

I.N.: We want China to get to know Madrid better, so when China thinks of Europe, it thinks about Madrid, so when Chinese tourists visit Europe they come to Madrid, so China's business world and companies with global aims and operations consider Madrid as an ideal European base for operations and a platform from which to access not only European markets, but also Latin American and North Africa.

At present, when a world citizen thinks

of Europe and Madrid, they tend to think of clichés like living well, tourism, football, flamenco, bullfighting, good weather, and so on.

I don't think that that's a negative image, because it certainly attracts many countries and the tourist figures we register every year prove that, but the thing is that it's an incomplete image and what we want to do is bring it up to date, and add other aspects of our reality such as competitiveness, business credibility, and the global leadership our companies have in high-value-added sectors.

We want Madrid to show China and the world these two facets and not just one, as has been the case until now.

Madrid is also the capital of Spain and has important aspects as the economic capital, as well as in the R&D field, which will be present in the Expo proposal. In fact, Madrid has the highest concentration of universities and research centres in the country, a density much higher than it would be on population alone.

Our presence in China will not end with the closing ceremony of the Expo: we will work to maintain relationships established during the event so that Madrid continues to be visible after the Expo is over. The Bamboo House and Air Tree will remain in Shanghai as Madrid's legacy, and as a sign of our interest in establishing a long-lasting and fruitful relationship with China in the long term.

What will visitors pavilion discover?

to

Madrid's

I.N.: That Madrid wants to offer the world a message of welcome, that we want people to come and get to know what Madrid can offer them.

We hope that when people think of Madrid, they think about a competitive, technologically advanced place, where not only can people work in an efficient, rigorous and competitive environment, but they can also enjoy our very high quality of life.

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Smart Business Cities

The Valencia Region is constantly improving its competitive advantages in the global economy, as one of the most dynamic and productive regions in the Euro-Mediterranean area.

Its enviable geo-strategic location, with rapid land, sea, and air connections, connects it to the rest of the Spain and Europe in record time, benefiting its constantly growing economy and contributing to unbeatable living standards.

We are also in the middle of improving and developing other important projects in the infrastructure area, such as the AVE, which will link Valencia to Madrid by high-speed train in just over an hour and half, or the Mediterranean corridor project to connect the centre and north of Europe with the south and, even, with Africa.

The Valencia Region is ranked second in Spain in the number of high-capacity networks, with 1,000 kilometres of motorways and main roads, which is an important advantage for trade given the direct influence this type of connection has on a region's economic development.

The Region has three airports, at Valencia, Alicante, and Castellón, which not only cover cargo transportation needs, but also facilitate passenger traffic demanded by business.

As regards maritime transportation, which accounts for 85% of overseas traffic, we have five ports which, combined, provide a total surface area of almost 7.5 million m2: Valencia, Sagunto, Gandia, Castellón, and Alicante. Their proximity to major maritime routes has seen them gain influence and receive maritime transportation since day one. The Port of Valencia, in particular, has become one of Europe's and the Mediterranean's biggest commercial ports and one of the leading facilitators of foreign trade for the region, as it is the principal entry and exit point for produce going from and to overseas. Furthermore, Valencia's ports tend to have adjacent modern and well-developed logistical areas, with all of the facilities for logistics activities.

Antonio Lis Darder CEO VCI VALENCIA AGENCY FOR INVESTMENT ATTRACTION VALENCIAN COMMUNITY INVESTMENTS www.vci.com.es

L

et's begin with a description of the Valencia Region's competitive and differential advantages in terms of its economy and business environment

diversification, greater adaptive capacity, and the connection established between Valencia's economy and global markets, allowing more direct and deeper knowledge of its expectations and demands.

A.L.: The Valencia Region has traditionally had an economy with a high level of internationalisation, especially in its export capacity, but also, more modestly, with imports.

The make-up of the present economic structure of the Valencia Region is the result of a major process of evolution which has seen it become one of the most dynamic regions in Europe.

From 2000 onwards, the balance between the export of Valencian products, capital, and investment to other nations, and vice versa, began to level out and, the flow of investment capital became the focus in the global market and an important part of the Valencian economy, considering the wealth generated, jobs created, and resultant international promotion, as well as what it brought in terms of technology transfer and exchange,

The Valencia Region's Gross Domestic Product (GDP) in 2007 was over 104 billion Euros, representing around 10% of the nation's GDP and ranking it more or less third in industrial GDP among Spain's autonomous regions.

The region's exceptional geographic position has enabled it to tap into the main trade routes in the Mediterranean, building relationships strengthened by Spain's accession to the

European Union in 1986, and the subsequent end to trade restrictions among member states. As a consequence, the Valencia Region's growth has traditionally been linked to foreign trade, given its characteristically open economy and export base: Valencian exports represent 11.8% of the Spanish total.

We have a first-class network of land, air, and maritime communications in constant expansion making up the logistics heart that drives the industry and business operating here forward.

Our excellent, modern, efficient, and comprehensive network of motorways and major roads links us directly to the leading national capitals, Madrid and Barcelona, and forms the backbone of the Levante coast from Andalusia until it connects to the French southern Mediterranean and on to the Italian border.

On the other hand, we have a huge offer of industrial land at very competitive prices, both in public and private hands, and a wide range of industrial areas all over the region.

The Valencia Region provides significant strategic value for national and international logistics companies.

Every form of transport is available, which positions us as an excellent intermodal hub, and we now have around six million m2 of logistical areas, with the goal of reaching 15 million by 2015.

This dynamism has made us an optimum region for logistics investments and the ideal platform to develop any business that needs competitive, global logistics solutions.

What are the most important sectors of the Valencia economy?

A.L.: In recent years, some economic sectors have developed where we have clear competitive advantages compared to other European regions: Tourism, taking in culture, leisure activities, and holiday homes, is a very significant sector in our economy and maintains a privileged position, both on a European level and worldwide, as it responds effectively and profitably to the needs of an increasingly demanding market.

The attractiveness of our region is based, primarily, on our location, extraordinary climate, the welcoming and friendly Valencian character, first-class Mediterranean cuisine, and very professional services. We also have all the legal guarantees of a European region, something not every Mediterranean tourist destination can offer. In the last few years, Valencia's hospitality industry has undergone considerable development, complemented by two factors that have brought about a major qualitative transformation in our region: on one hand, the City of Arts and Sciences is a great centre of dynamism for cultural tourism and has attracted huge social and media attention, as well as being one of Calatrava's most important buildings and an extraordinary piece of architecture, and, on the other, the existence of big leisure parks, such as “Terra Mítica” , theme park, that, due to its privileged location and thanks to the constant influx of tourists it brings to Alicante province, has become a leading tourism reference in the south of Europe.

The region also has important coastal tourist centres and attractive mountain villages, well cared-for beaches on a 500-kilometre coastline, and 24 golf courses, designed by world-famous figures in the sport, throughout the provinces of Alicante, Castellón, and Valencia that hold globally prestigious tournaments around the year, making up a perfect combination of leisure, culture, and sports activities. This is also demonstrated by the Region's selection as host of worldwide sporting events like the 32nd edition of the America's Cup, the Volvo Ocean Race in Alicante, the motorbike world championships, the Indoor World Athletics championships, and the Formula 1 Grand Prix. And, of course, the celebration of Fallas, a tradition which brings thousands of visitors to the region every year.

The combination of all these factors complements our very interesting history and cultural heritage, and we have also witnessed significant development in the sector of business travel, with first-class infrastructure such as the Norman Foster-designed Conference Centre in Valencia or the one in Castellón.

Currently, we receive more than seven millions tourists every year, of whom two million come from outside Spain, meaning the Valencia Region in general, and especially the Costa Blanca, Benidorm, Valencia's coast and the Costa del Azahar, make up a unique, strategic stage where we are developing a solid, high-quality tourism investment.

As a result, the Valencian Government is focusing on the value that beach tourism represents for our region, putting in place integrated maintenance plans and improvements along the coast to guarantee our beaches are in perfect condition. This philosophy is focused on people's environment and welfare, and has been validated by the highest official certification awarded to the vast majority of Valencian beaches.

For those who prefer the interior, the Valencia Region has a natural, historical beauty which make it a real paradise for lovers of rural tourism.

More than 20 natural parks and dozens of tourist attractions can be enjoyed on endless routes through natural surroundings: mountains, plains, wetlands and even sites where ancient civilisations have left their artistic and cultural mark.

To sum up, we have a high-quality, diversified tourism offer, which generates per head spending well above the average for the sector. We also have a Mediterranean climate, with mild winters, very low rainfall, and a very high percentage of sunny days – up to 90%, with a total of 2,858 hours of annual sunshine – figures that very few places in Europe enjoy and which justify the Valencia Region's position as an exceptional international tourist destination.

Another important sector in our economy is the audiovisual industry.

The facilities of Europe's most modern film studios, the Ciudad de la Luz, are located in Alicante: an industrial complex with the most advanced audiovisual production services, large areas for cinema, television, and advertising filming, and with all of the means necessary to develop every stage of cinematographic and audiovisual productions.

Its installations have all of the tools required to film major productions, as well as smaller projects, whatever the audiovisual sector: film, television, or advertising. Its 6,000m2 of space for filming and technology, also housing a well-respected professional learning centre, is aimed at achieving two objectives: being able to undertake super-productions and preparing new professionals to work in the sector. The studio has six film sets, three production support buildings, a warehouse and workshop, two back lots, a film pit, water zones, and additional services for sound, editing, and mixing post-production, as well as a catering area and laboratory.

The Ciudad de la Luz has enabled us to create an important link with the American movie industry, which has a notable presence there, and provides an important and constant source of economic income for the region.

At the same time, the Valencian Government is increasingly concentrating on R&D&I, research, development, and innovation, through programmes that promote investment and the creation of technology-based businesses.

These sizeable investments are reflected in the number of professionals dedicated to R&D&I activities in the Region: in Valencia province alone, there are over 2,000 researchers working in more than 160 research centres. This is a major effort that places the Valencia Region at the forefront in qualifications like Biomedical Engineering, Medical Physics, or Information and Communications Technology, applied to the health sector.

The City of Arts and Sciences

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Smart Business Cities

In addition, the Valencia Region has a strong university sector with a total of seven institutions, five public and two private, which offer over 100 degrees, making Valencia the third city in Europe in the number of overseas student exchanges.

Other more traditional sectors listed on the stock exchange, and which easily attract lots of international investment capital, are those related to the production of non-metallic minerals, ceramics, and the chemicals industry.

services at their disposal aimed at making processes and project approval simpler: we find possible locations or local partners for their projects, provide information and ongoing advice services to help with management and consultancy, process applications, permits and licenses, offer information and aid to obtain grants, data and market research reports, and, in short, act as a one-stop shop to help overseas investors minimise the hassle to

maximise investments. At present, there are more than 400 multinationals operating in the Valencia Region, which shows that VCI has been a useful and pro-active tool when it comes to promoting and attracting investment to the Region.

At VCI, we also define the strategy to maintain or increase foreign investment in comparison with other competing regions and identify new sectors of our economy in which we

can expand our offer, making available a wide range of services to companies thinking of investing in the Valencia Region so that investors have all of the information they need about the region and can benefit from the support mechanisms that the regional government offers.

In the new global economy, exporting products is no longer enough to attract capital and development in a sustainable way, you have to also export your

region and its potential. In the last two years, investment by overseas companies in our region reached 4.68 billion Euros, a historic high.

And, if you add to that the institutional stability the Region has long had, and the existence of other bodies, aside from VCI, that also help and support foreign investment, all of this makes our offer very attractive and increasingly well known as the whole Valencia Region offers high living standards and

guarantees good results for certain types of investments. I would say to potential Chinese investors that we have a historical relationship, based on traditional products like rice and oranges which first came to Valencia from China and blossomed here, so that although there may be geographical and cultural differences between us, our relationship with the Chinese business community here has been a very agreeable one, based on mutual exchange.

The renewable energy sector is very active in our region, as well as providing a large number of jobs. The rise of this sector has positively affected the whole Valencian economy and our energy legislation is very demanding and respectful of the environment, clearly favouring renewables over traditional sources of energy. In fact, the Valencia Region will be energy self-sufficient in 2010, and today we are already above the European Union average in the use of renewable energy.

Energy infrastructure is a leading investment draw, accounting for 40% of investments in infrastructure, and we have the goal of building more energy plants with direct financing from the European Investment Bank, like the regasification plant at Sagunto, and developing transportation and supply networks.

The mix of ingredients has worked out wonderfully. In recent years, the Valencia Region has become a real magnet for foreign investment...

A.I.: That's right. Investment has been doing very well lately, The latest data available from the Ministry of Industry are for the last quarter of 2008, and the Valencia Region led the way nationally with 23% of total direct foreign investment in Spain, ahead of Catalunya and just 1% lower than the Madrid Region.

This figure, which not only consolidated but also continued to grow in 2009, was accompanied by the transformation of the city of Valencia, the region's capital, into a financial centre.

Equity holdings have established themselves here, meaning the Region has also gained serious financial muscle.

I would also like to point out that the leading importer to the Valencia Region is China. China's potential has been demonstrated so clearly in such a short time, that in our Region its presence is ahead of nations like the United States, France or Italy.

The presence of Chinese businesses in the Valencia Region is very significant. So much so that last year they created a federation, the first in Spain, to work together, coordinate, keep contact, share knowledge and management backing, and, above all, have a unified presence and voice, as it is a group with a very important presence in our Region.

Without a doubt, the creation of VCI has also had a lot to do with the rise of foreign investment in the Valencia Region.

A.L.: Yes, the Valencian Government created VCI, the Valencia Agency for Investment Attraction, in 2004, as a public company under the auspices of the Economic Coordination Vice-Presidency and the Secretary of Economy, Treasury, and Employment, with the primary strategic objective of promoting foreign investment because, although our Region was already well positioned internationally as a tourist destination, curiously it was not well known as a great place in which to invest.

The first phase of the work involved placing the Valencia Region in an international context, promoting its competitive advantages in international investment forums.

Another of our jobs is to develop sectorial and global studies to analyse the sectors where we are most competitive and in which others we could be better placed with some adjustments.

You have to take into account that when overseas investors arrive here, above all non-Europeans, they encounter a regulatory, legal, administrative, and institutional framework, as well as a series of customs, rules and traditions, that they do not know well, and all that can prove a difficulty and even a determining influence on an investment decision.

In this sense, VCI acts as a kind of partner or strategic ally for overseas investors, putting a wide range of

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瓦伦西亚自治区 一个投资的机会，一个生活的地方 一个开放的地区经济 瓦伦西亚外资引进中心：一个为投 资者服务的公共机构 瓦伦西亚自治区：一个投资创业的 机会，一个适合生活的地方

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BusinessONE: SPAIN

Smart Business Cities

H

ow would you describe Aragon competitive advantages from an economic and business point of view?

M.T.: Aragon occupies a privileged crossroads on the map of southern Europe, as there is a population of over 25 million consumers and a potential market of 25.24 billion Euros within a three-hour drive. Located in the economic centre of Spain, it is within a 300-km radius of Madrid, Barcelona, Bilbao and Valencia, and also serves as a connection point with Bordeaux and Toulouse, two French regions with significant economic activity.

Aragon's economy accounts for 60% of Spain's GDP and, thanks to its strategic location and excellent rail, air and land communications, is an ideal place for distribution, resulting in the economic centralisation of the logistics sector in the region.

The region's strategic location has attracted a large number of investments in recent years which, linked to overseas development of Aragonese companies, has strengthened the region's productive structure.

Important industries are being developed in the logistics and services sectors, above all in the fairs and conferences sector and by companies

M.T.: In the first place, Expo Zaragoza 2008 marked a before-and-after in the development of a series of first-class infrastructure which significantly drove the development of the whole territory forward, and the city of Saragossa received massive promotion overseas as an ideal place from which to operate.

Porcelanosa, DHL Express and Barclays Bank, among numerous others.

On the other hand, Aragon is a region where companies have a very high level of quality guarantees and excellence certifications for business management processes. In fact, Saragossa has the highest level in Spain, because 24 years ago there was a huge crisis in the Spanish industrial sector due to the opening up of borders, and many companies in the industrial sector disappeared as they were wiped out by large multinationals which set up here.

At the time, there was a major industrial reconversion and people were quickly re-employed in the automotive sector, above all by General Motors, who have the world's most modern factory here.

M.T.: All of Aragon's and Spain's businesspeople which are already present in China or have a commercial strategy for the Asian giant, are fully aware that China is a hugely important strategic market, both for sales and manufacturing.

Let's now talk about China's potential as a strategic market, something you have already clearly identified in your role as a businessman and CEO of Taim Weser.

China has tremendous potential as a consumer market and, at the same time, is a nation that can invest and establish itself in Spain as a platform to operate in other nations. As a result, I believe it is very important for Aragonese and Spanish companies to set up in China, and that they also become capable of bringing Chinese companies to invest here.

It's a model of reciprocity: China brings a vast market and a huge potential for technology and manufacturing, and Spain offers China the know-how gained in the European market and Latin America, an area where we could prove to be very useful for Chinese companies, given that we have important historic, cultural, and linguistic links to that market.

That led to the development of a large cluster of companies around General Motors to make components using their own technology. All these companies adopted the same management and certification models as the car company, which led to the creation of a major business hothouse which was very responsive to all kinds of quality

FIMA Agrícola y FIMA Ganadera, both of which are number one in Europe, as well as a very important fair for renewable energy: Wind Power Expo, where we are really interested in welcoming Chinese companies, as it is an event with an economic impact in excess of one billion Euros.

We are Spain's third largest fair today in economic impact, as well as sixth in the European top ten, and we also provide very flexible services to our exhibitors at very competitive prices.

Returning to your business interests as CEO of Taim Weser, Saragossa has not only established itself as a sustainable city, but also enhanced its image thanks to the development of wind power.

M.T.: That's right. Aragon was a pioneering region in coal power stations and is now one of the regions which has focused most on renewable energy. You only have to take a look at the wind turbines surrounding us to see that.

My company, Taim Weser, is a faithful reflection of that: we supplied the first wind farm constructed in China and export 91% of all our equipment, so China is a very important market for us.

The Chinese capacity to learn and organise is superior to everyone else's: put ten Europeans to work together and they will get in each other's way,

Manuel Teruel President SARAGOSSA’S FAIR SARAGOSSA’S CHAMBER OF COMMERCE TAIM WESER www.feriazaragoza.es www.camarazaragoza.com www.taimweser.com

that need strategic distribution points, for whom Saragossa is an exceptional spot, as it is a very well-connected city but smaller than Madrid and Barcelona, so costs are lower. Our unemployment figures are the lowest in Spain.

The region has undergone one of Spain's most spectacular transformations and seen huge economic growth in the last decade. What are, in your opinion, the key factors of this takeoff?

certification. This is very important as Aragon is more advanced than the rest of Europe in terms of commitments to quality, the environment, and training.

a massively important issue for me.

A number of years ago, Aragon's business world became aware of the importance of exports in company strategy. Today we talk about internationalisation instead of exports, and controlling purchasing and sales channels is vital, logically, to ensure that added value remains in our region.

Which are the most important markets for Aragonese companies on internationalisation drives?

There are lots of companies today with a global strategic model: they do their purchasing in China, a major exporter of products and components, and then export to other nations from Saragossa.

M.T.: As well as presiding over the Sargossa’s Chamber of Commerce and Saragossa's Fair, I also head up the Internationalisation Commission of the Upper Council of Spain Chambers of Commerce, so internationalisation is

Aragon's business fabric has undergone a very large degree of internationalisation: some Aragonese companies export more than 50% of their production. Technologies have changed, distances no longer exist in

the industrial sense, and to work out if a company is competitive you can no longer compare with its neighbours, but have to measure it against companies worldwide.

In Aragon, there is an important niche of companies with very high levels of internationalisation. My company, Taim Weser, exports 91% of its production, for example.

Which sectors have the greatest potential for overseas expansion?

M.T.: The automotive sector is a heavyweight, because 75% of employment in the sector is generated by proprietary technology component factories.

23% of Spain's industry is in the automotive sector and not under a Spanish brand, but under all of the overseas brands.

Nevertheless, in Spain we have possibly the largest offer of automotive components in Europe. Increasingly, Spanish companies are harnessing their know-how in the design of components for new cars on the market, and that is very important.

The development of the region as a logistics platform has also been a powerful magnet for foreign investment. Our geographic location has had a very clear strategic value and, in addition, the Aragonese Government has made a major effort to develop logistics. Today, we have PLAZA – Logistics Platform of Zaragoza – Europe's largest logistics platform with 12,826,898 m2 of space.

PLAZA's primary characteristic is that it is based on an inter-modal transportation hub (rail, road, and air), a combination that has the capacity to make Saragossa into one of Europe's most important logistics cities, with connections to Europe's most relevant production and consumer centres.

This inter-modality strengthens the localisation and centralisation values of the facility, which is completely open to companies that undertake logistics activities and whom PLAZA assists with a series of common services and equipment which greatly multiples the benefits of its location.

Its size, location on the axis of south western Europe, and capacity for inter-modal services have made PLAZA the location of choice for leading companies in their respective sectors, such as Inditex, Imaginarium,

Last September, Spain was the guest nation at CISMEF – China International Small and Medium Enterprises Fair -, which I think is very important, as small and medium-sized companies, which make up the majority of Spain's business fabric, often cannot imagine selling to or setting up in many nations, as their modest size impedes this. As a result, what they have to do is to choose a market with lots of potential, both for sales and purchasing, and China is the ideal country in that sense.

put ten Chinese together and one becomes a leader and organises the others perfectly.

I believe that small- and medium-sized companies in Aragon and Spain can find important alliances in China and develop both there and here at the same time.

In the last few years, we have been concentrating on European markets and nations like Morocco, but now it's China's turn, as today it is a country open to buying and selling and has significant technological development of its own. Companies not in China today cannot consider themselves global companies.

Let's now talk about Saragossa's Fair, which is also growing of spectacular way.

M.T.: In recent years, Saragossa's Fair has undergone major growth, based principally on a good management model that has us benefiting from the central location Aragon has in Spain.

The grounds of Saragossa's Fair cover a total surface area of 360,000m2, with functional and multi-function areas distributed in 11 halls of varying size and spacious outdoor areas. Located just off the motorway, it has direct road access to Spain's leading capitals. It also has a first-class conference centre with different sized spaces, an auditorium with room for over 600 people, a lobby for product presentations, a press centre, café, and VIP area.

The Fair's philosophy is based on working in parallel with prestigious organisers to create a large number of new events, which has seen Saragossa's Fair move from hosting 18 events to 55, from 1,863 companies to 9,960, from organising 50 conferences to 215, and all in just seven years. At present, the Fair's calendar is made up of 55 events of all kinds.

Saragossa's Fair has formed relationships with the largest European fairs and is a world leader in machinery for public works, as the SMOPYC fair shows. In the food sector, we have

Taim Weser is present in Brazil and Germany and we have just established a much stronger presence in China.

Taim Weser grew by 80% last year and we understand China is one of the most important strategic markets in the world to manufacture intermediate equipment, which will enable us to reach a competitive final cost calculation.

What should Chinese businesspeople and investors know and remember when they think about Aragon?

M.T.: Firstly, that here they will encounter serious businesspeople with lots of experience in international markets, who are used to working with people from many countries, which helps understanding and collaboration.

Prudent people who, at the same time, are not averse to the risk of operating overseas and internationalising.

They will find a peaceable society, expanding geographic surroundings, with lower costs than in large cities, highly qualified human capital, competitive energy costs, and an excellent transport network.

Aragon's authorities, the Aragonese Government, Saragossa's City Council, and the Saragossa’s Chamber of Commerce and business associations will welcome all those Chinese companies interested in investing or setting up in our region with open arms, and, at the Chamber of Commerce, we offer the same support to any overseas company as we do to local ones. We are an open, modern, and competitive region, and we are receptive to integration.

BusinessONE: SPAIN

Smart Business Cities

B

arcelona's competitive advantages as one of Europe's cities with the highest international profile in the field of business

J.W.C: Barcelona is the economic, cultural, and administrative capital of Catalunya and one of the leading metropolis in Spain and the European Union.

Catalunya is the first-ranked region in terms of contribution to Spain's GDP, and second in population.

Located in the north east of Spain's territory, Barcelona enjoys a strategic geographic location as a logistics platform for the Mediterranean and has been recognised by independent bodies as one of the leading European cities for business, alongside economic motors of the continent like London, Paris, and Frankfurt.

In recent years, Barcelona has developed all the necessary elements to rank among the leading centres for international business: the airport expansion, the port and the Fira de Barcelona, the high-speed train, and the 22@ innovation district.

consultancy firm Cushman & Wakefield. It has remained in first place for the last eight years.

entrepreneurial spirit. Proof of this is the backing for new business creation conducted by the public company, Barcelona Activa, an instrument to design and implement employment and innovation policies, as well as the creation of new companies in the city, many of them in high value-added sectors such as ICT, engineering, etc.

In 2008, more than 30 million passengers came through Barcelona's airport and it handles an average of 900 flights a day to 130 domestic and international destinations. Barcelona’s airport is one of the leading European airports in terms of passenger growth. For this reason, work has just finished on the new South Terminal, which has expanded capacity to 55 million passengers. With this, Barcelona's airport is now in a competitive position to increase direct connections to Asia, both in terms of passenger and cargo services.

University and higher education are other important pillars upon which Barcelona is basing its continuous evolution. In the Barcelona area, there are eight highly reputable universities, five public and three private, offering diplomas and degrees in a wide range of subjects, and the city has also offices and centers of other Spanish and foreign universities, so it is chosen as the preferred destination for college students around the world. Furthermore Barcelona also hosts several prestigious international business schools that are among the top five in Europe with high attendance of foreign students, such as IESE Business School and ESADE Business School.

The Port of Barcelona is one of the busiest ports in the Mediterranean.

Through the Suez Canal in the Gulf of Suez in Egypt, cargo vessels can sail directly from Asia to the Mediterranean and, subsequently, to the rest of Europe. With this route, three days of travel are saved when compared to other connections via northern Europe.

The Port of Barcelona is currently undergoing an ambitious expansion process. The Chinese company Hutchinson Port Holdings won the tender to manage the new container terminal, and the Port of Barcelona

In this sector, Barcelona is a reputable brand in the international arena, as few cities worldwide have such a high concentration of business schools as the Catalan capital, and many overseas students travel to Barcelona

7

If we look at the mix of Barcelona's inhabitants closely, we realize that foreigners really are part of the diverse social fabric of the city with more than 150 nationalities accounting for 16% of the total metropolitan population.

According the National Statistics Institute (INE), in 2006 Chinese residents were the second largest group within the Asian community in Barcelona, making up around 30% of the total Asian population living in our city.

How is the Barcelona City Council committed to create a closer and lasting relationship with China?

J.W.C: Barcelona City Council is working actively to create stronger economic ties with Asia and, especially, with China.

Together with the Barcelona Chamber of Commerce, it organises high-level institutional events focused on trade, called “Barcelona Business Bridges”, for different Asian cities. The goal is to develop and promote business relations between companies in each city and to explore possible business opportunities.

Furthermore, there have been several agreements to boost and to create

Jordi William Carnes Deputy Mayor responsible for the Treasury and Economic Promotion BARCELONA CITY COUNCIL www.bcn.cat Hong Kong operated by Cargolux, and two weekly flights to Shenzhen operated by Jade Cargo.

22@ Barcelona has a first-class offer for business: we have a prestigious and recognised brand, a diversified economy with high value-added sectors (ICT, media, aeronautics, design, and the agro-food industry) and, all in the context of a high quality of life.

every year to attend business management classes.

According to a study undertaken by the consulting firm PriceWaterhouseCoopers, Barcelona's sustained economic growth over the last few years has placed the city in the ranking of the 36 cities with more economic power in the world, which aggregate 16% of world production.

On the other hand, the cosmopolitan character of the city, its pleasant Mediterranean climate, numerous green areas, urban beaches, and delicious gastronomy based on the healthy Mediterranean diet, attracts many foreigners who decide to stay here once they get to know the city.

Barcelona is an active, vital, and dynamic city that is reinventing itself and is immerse in the most important urban and economic transformation in its recent history. The city does not stop and continues to pose new future projects to consolidate and expand economic development in the new parameters of the knowledge society, the international position, social cohesion and living standards.

What do China and Asia as a whole represent for Barcelona?

On the other hand, the present and future of our city goes through a complete integration of technology into every process, from the most innovative to the most mundane.

Barcelona is a pioneer in promoting

As regards to workforce, Barcelona has well-trained human resources with almost 40% of the total population of Barcelona dedicated to knowledgeintensive services.

J.W.C: During the 21st century it has been proven that the Asia-Pacific area will experience the world's most rapid and significant economic growth, with China and India taking the lead. The interest of Chinese companies and those from other Asian countries in the European market will increase, and vice versa.

For example, in 2007 new intercontinental air routes began operating to Asia from Barcelona's airport.

Singapore Airlines has a daily passenger flight to Singapore, as well as two cargo flights, three flights a week to

Currently, China is a huge market but it is also highly fragmented and not homogenous, as economic development varies according to geographic areas and the level of progress.

Although most people consider China to be the world's factory, it is important to know that China has fabulous and very knowledgeable companies in the information technology sector.

These are precisely the Chinese companies we want to attract to settle here in Barcelona and become part of our business fabric. They might choose to work with local IT companies or use Barcelona as a starting point to grow and later enter the European market.

What can Barcelona offer to Asian companies in general, and Chinese in particular?

J.W.C: Barcelona is an ideal platform for doing business in Europe. The Barcelona area has long been an interesting destination for Foreign Direct Investment (FDI) in Europe and, because of this, is the largest base for foreign business in Spain. Choosing Barcelona for business means choosing a favourable entrepreneurial environment with comprehensive infrastructure, as well as other vital elements to guarantee business success.

Barcelona is strategically located in the centre of a European region that is well-connected by air, land, and sea,

with easy access to over 17 million consumers. Given that Barcelona has close diplomatic relations with Latin America and that Spanish companies have traditionally invested in that region, Barcelona is also a springboard for Chinese companies wishing to do business in Latin America. In this sense, foreign investment figures for 2008 showed that 23% of foreign investments from Catalunya were destined to Latin America.

In Spain, Barcelona has traditionally been the bridge to Asia. For this reason, Barcelona was chosen as the headquarters of an important public institution, Casa Asia, established in 2001 by the Spanish Ministry of Foreign Affairs, the Catalan Government, and Barcelona's City Council.

The goal of Casa Asia is to promote mutual understanding and closer ties between Spain and the Asia-Pacific region with economic, institutional, academic, and cultural exchanges.

The economic department of Casa Asia, called “Business Circle”, is a tool to promote commercial relations and investments between the Asia-Pacific region and Spain. It organises numerous seminars, summits, conferences, and training programmes related to business management, as well as strategic projects, throughout the year both for members of the business community and for the general public.

As well as the working conditions, it's also worth highlighting that Barcelona is the European city with the highest living standard for employees, according to the European Cities Monitor, published annually by the international

Torre Agbar reached total traffic of 2.6 million TEUs in 2008, of which almost a third came from China.

The Sant Martí area, where the Plaça de les Glòries is located, is where Barcelona's City Council is undertaking the transformation of 200 hectares of traditional industrial area into a new and innovative technological district called 22@. This area is being designed with an outstanding quality level of urban infrastructure with the goal of satisfying the needs of different emerging sectors belonging to a knowledge-based economy.

Without a doubt, these are factors that could make Chinese companies feel at home in Barcelona.

J.W.C: That's right and we also have an active and integrated Chinese community in our territory.

stronger economic ties, among them is the “Twin-City Agreement” established between Shanghai and Barcelona, enabling both cities to work together closely on development projects.

To ease the problems that doing business with China may cause due to language barriers, the Economic Promotion department of the Barcelona City Council has created its “China Desk”, an office which offers general consultancy services in Mandarin.

Finally, I would like to reiterate that I sincerely believe that if we continue to offer economic priorities to the Chinese market, the message that Barcelona is a “showcase for business opportunities” will spread among Chinese companies, and China will eventually become a long-term strategic economic partner for Barcelona.

And vice versa.

CREATE INVEST WORK LEARN RESEARCH SMILE

Most cities locate their business on the outskirts of town. For the space dedicated to the knowledge-based economy, we prefer the city centre. More than 1,500

companies working in media, ICT, energy, Med Tech and design already know this and have created more than 42,000 new jobs, in 22@ district. www.doitinbcn.com www.doitinbcn.com

8

BusinessONE: SPAIN

State of the Art Technology

A

n introduction to Gamesa Corporación Tecnológica as one of the world's leading manufacturers of wind generators, and the leader in Spain in the manufacture, marketing, and installation of wind turbines.

an installed capacity in excess of 3,700 MW, whereas in 2005 we only had 1,800.

J.C.: Gamesa is a company with more than 30 years of history, and was established in 1976. Its DNA is based on the development of new technology and, from the beginning, has always focused on the fields of microelectronics, aeronautics and so on, until, at a point in time in 1994, it took the decision to develop wind farms, with the installation of the first wind farm in Navarra.

J.C.: First of all is the quality of the product we deliver to clients. The reliability of our products is what ultimately guarantees return on investment over the course of their service life. As a result, quality and reliability are important characteristics of our company.

From that time on, the development of turbines or wind generators became increasingly important and, in 2006, the decision was made to separate out all activities not linked to energy technologies. We focused on these and began to consider them as our main motor of growth.

At present, Gamesa is one of the three leading companies worldwide in wind generator manufacturing, and is in a position to offer energy solutions that will enable us to grow sustainably and profitably.

The visibility the company has achieved since 2006 has been

What aspects would you highlight about Gamesa's competitive and differential advantages, the foundations of its success enabling it to compete on the world stage?

The second pillar of our success is technological innovation, which enables us to maximise the efficiency of our wind generators: making the cost of energy produced by Gamesa wind generators less and less over the course of time and extending the period that they are in operation, hence not only making wind power an environmental solution, but also an economic one.

We are developing excellent relationships with local clients which are leaders in the generation of wind power, as is the case with Longyuan, which is a leader in the wind power sector and also belongs to one of the largest energy companies in China, the Guodian Group.

Commercial activities for the sale of wind generators and wind farm promotion are consolidated in our Beijing office, and Gamesa also has a worldclass production centre in Tianjin, where many of the Corporation's and the industry's best practices are in operation.

We could also cite the case of Huadian New Energy, with whom we have reached agreements to deliver wind generators and to develop wind farms together. Our clients are the ones who have really placed their confidence in Gamesa's products and business model: they are our ambassadors.

To undertake the industrial project in China, Gamesa has made investments to the value of some 40 million Euros and created jobs for more than 900 people, without taking into account the important effect of indirect employment creation, as the construction of wind farms needs a significant workforce.

Our primary objective is to get to know the Chinese market's needs, import our model, establish relationships with leading strategic clients, and work closely with them as they grow.

Gamesa also received significant recognition in 2008 and 2009, in the form of two awards from the Tianjin authorities, the Tianjin Advanced Enterprises with Foreign Investment Award for a combination of sales, profits, and taxes, and the Haihe River Award, for our contribution to social, economic, technological, scientific, and cultural development.

Furthermore, we want to work together with our suppliers and transform what, in the beginning, is a local source into a platform for global supply, in such a way that we can manufacture in China for the rest of the world.

Currently we have four production centres in China, have directly invested around 40 million Euros, and have a workforce of more than 900 people.

Today, we know that the cost of energy produced by wind generators is on a par with other conventional power generation sources.

Gamesa has carried out very significant investments in R&D. In recent years, we have invested more than 200 million Euros, we hold more

Meaning you're not just working in China, but WITH China.

China is an essential strategic partner for us, and one of Gamesa's most important markets.

What is your opinion about the possibilities Spain can offer China, from a technological point of view, as a world leader in renewable energy? What should China know about Spain and, of course, about Gamesa?

Jorge Calvet Executive Chairman GAMESA CORPORACIÓN TECNOLÓGICA www.gamesacorp.com

service that enables them to optimise the return on their investment.

Let's talk about Gamesa's international presence.

Gamesa Tianjin spectacular, thanks to that specialisation.

J.C.: Gamesa Corporación Tecnológica has more than 16,000 MW of installed capacity in 22 countries with a share of over 13% of the global wind generator market. We also have a significant activity in the promotion of wind farms, in which we have a global portfolio of almost 23,000 MW. We have almost 30 production centres in Spain, the US, China, and India, with

than 200 patents, we are leading European projects for technological development that go well beyond 2010 and 2015, and are just about to show the world the latest technological feat that we have achieved recently: a 4.5MW wind generator.

The third pillar, which is also fundamental, is post-sales service; it is vital that our clients know they are going to have a reliable partner who will be there throughout the service life of the machinery, providing quality

JC.: From a geographical market point of view, one of our major achievements, as well as a technological one, was to define if Gamesa was a company with global ambitions and the capacity to undertake the internationalisation process.

We selected three geographic regions with lots to offer, basically Europe, North America, and China, and we did so following the lead of the largest wind power companies.

Once we had identified markets and the main clients, we put production centres into operation and began with technology developed in Europe and

applied in other geographical areas where, in addition to the production centres with local workforces, there was a sizeable range of local suppliers, thereby creating extraordinary levels of direct and indirect employment.

This means that certain administrations see Gamesa not only as a manufacturer or technology company, but as a business which is committed to generating wealth on a local level, and not just as a company specialised in wind generator manufacturing, but also a business model that has been successful and can be exported.

What are Gamesa's main objectives at present?

J.C: Our primary goal in the short term, from a technological point of view, is to overcome technological limitations in the solutions we already offer, to ensure that the cost of energy produced from wind power resources continues to decrease over time.

As regards our business model, to see new countries with energy demands opt for the economic energy model we offer and give Gamesa the opportunity to set up there and continue to be a company with global ambitions.

We also want to ensure everybody associated with this project manages biodiversity, the cultural project whereby we will maintain the exchange of principles and of values, which are obviously going to be Chinese in China, American in the United States, and European in Spain and France.

In this way, the sum of all our efforts will create Gamesa's own culture, which is all about incorporating the participation of new groups to become part of the project.

How important a market is China for Gamesa?

J.C.: In real terms, we have 700MW of capacity and ongoing sales in China, compared to a total capacity of around 3,700MW. In every economic sphere, and especially in wind power, China is both a massive opportunity and a major challenge. We have been present in the country since 2000 and are implementing our management model, which implies a series of values we think are 100% compatible with Chinese culture.

J.C.: Exactly. The world no longer has barriers and we have to be able to offer global solutions from a local perspective, to offer solutions to people wherever they live.

Gamesa has had a commercial presence in China since 2000, our wind farm promotion and sales activities began in 2005, and our first factories were opened in 2006.

In 2008, Gamesa's sales of wind generators in China reached 500MW, increasing their share of the Corporation's sales to 13% from 11% in 2006.

In wind power promotion, after studying nine provinces in China, we reached strategic agreements with provincial and local governments in the provinces of Jilin, Liaoning, Inner Mongolia and Shandong, all of which are close to Beijing.

In 2007, Gamesa was the first overseas company to receive the Chinese government's permission to undertake wind measurements and, in June 2008, the Provincial Development and Reform Commission (DRC) approved the wind farm project we promoted in Taipinshan (Shandong).

J.C.: One of the things that Spain is missing on the international stage is that it does not have a brand identity associated with technology, which is a shame because there are lots of Spanish companies that are world leaders in cutting-edge technology sectors and high value-added services, such as renewable energy, construction, transportation and so on.

From an industrial and technological point of view, and more specifically in the case of renewable energy, Spain is not only a production centre but a nation that has developed specific knowledge which should build a new brand identity on the international energy map. There are lots and lots of Spanish companies that are leaders in their fields, and the sum of all of those companies enables our businesses to be global references.

Spain has to create an international brand identity project to let the world know about the achievements of Spanish companies, from the largest names to the small businesses which also contribute to making those large names known worldwide.

BusinessONE: SPAIN

State of the Art Technology

R.B: Precisely. Instead of customers needing several suppliers, as has been the case to date, forcing them to combined different technologies, different after-sales services, different know-how, different ways of doing things and even different languages, we are now capable of providing them with comprehensive solutions designed to satisfy all their needs. As the sole supplier, we take care of the technical side and also supply spares and an after-sales service, all covered by the same contract.

We are marking this system worldwide and are already involved in interesting projects in Germany, Italy, Russia and China.

Rafael Barrenechea Managing Director DANOBATGROUP Vice-president MONDRAGON CORPORATION www.danobatgroup.com www.mondragon-corporation.com

D

ANOBATGROUP is the leading machine tool manufacturer in Spain and one of the top 20 manufacturers in Europe.

The Group’s most representative products are Soraluce milling centres and Danobat grinders, lathes and punchers, especially designed for sectors including railways, aeronautics and wind power.

power and the manufacture of capital goods.

DANOBATGROUP employs a total of 1328 people, 206 of whom work in its plants established abroad.

The railway industry is currently one of our main business lines and we have created a company called Danobat Railway Systems with a view to specialising in the railway sector, with an exclusive team of technicians and marketing experts working in the field.

They will be focusing on rolling stocks for locomotives, carriages and high-speed trains.

On the one hand, this new activity has involved hiring an important number of qualified experts capable of designing and implanting production lines with a significant engineering component and, on the other, it has led to the construction of a 10,000 m2 facility in Spain.

Descriptive introduction to DANOBATGROUP R.B: DANOBATGROUP is part of the Mondragon Corporation the eighth largest business group in Spain and one of the most important industrial corporations in Europe. It is the industrial division, specialising in machine-tool manufacture.

DANOBATGROUP has been operative for 55 years. Its turnover totals 300 million euros, 85% of which represents foreign sales. Germany, Italy, China and Russia are its most important markets, with a turnover of 32 million euros in China alone.

We became established in China nearly 20 years ago, in 1992, with the long-term goal of becoming more familiar with the market and providing our customers with training and an excellent after-sales and spare supply service using fully qualified native technicians.

We opened our first branch office in Beijing 16 years ago, and last year we decided to open one in Shanghai, because China has been our third largest market since 2007 and it has always been a priority market for the company.

We operate in several sectors, including railways, aeronautics, wind

One of our present strategies consists of transforming a product-based policy also into a sector-based policy. Let me explain. We have so far merely been manufacturing and selling products.

Our new goal is to specialise in different sectors on a worldwide scale, developing complete solutions tailored to specific needs.

On 23rd October 2008 we signed a contract worth more than 50 million euros with T.V.S.Z, Russia’s leading railway goods wagon manufacturer.

This contract, which represented a record in the Spanish machine-tool sector, covers the design and supply of a technologically advanced machining line for the manufacture of assembled railway axles.

By creating Danobat Railway Systems, we aim to provide the best solution for manufacturers of items such as bogies, axles and wheels, and the reaction of our customers to this new policy has been excellent.

In other words, by creating Danobat Railway Systems you become the only supplier that satisfies all your customer’s requirements.

supplier specialising in wind power, railways, aeronautics and capital goods, DANOBATGROUP is a specialised provider capable of covering all their requirements.

Will the strategic model based on the creation of Danobat Railway Systems be exported to the other sectors in which DANOBATGROUP is involved?

This is our first specialisation, but we will shortly be exporting comprehensive solutions to other sectors which are currently under study.

What are the main challenges currently facing DANOBATGROUP?

What other competitive and differential advantages does DANOBATGROUP offer compared with other global competitors?

R.B: We are currently involved in developing new models with enhanced features for the rail and aeronautics sectors, at more competitive prices.

R.B: One of the most important keys to our success is based on specialisation, on comprehensive know-how related to each of the sectors involved and on constant innovation in our products.

Twenty-seven years ago, we were pioneers when we created the Ideko Technology Centre, our cutting-edge machine-tool research and development facility, with 102 highly qualified experts (23 of them already have or are in the process of completing their doctorates). This is something that our competitors do not have, and represents one of our most important competitive advantages: our excellent human resources.

Our advantage here is that we form part of Mondragón Corporación, a financially powerful organisation with important management mechanisms, so that we are able to reassure our customers concerning our future status.

We approach innovation from four different perspectives: market innovation, product innovation (new technologies applied to the manufacture of solutions and machinery to enhance our customers’ competitiveness), innovation in the supply and provisioning chain and, last but not least, organisational innovation, with new approaches to adapting to new challenges, countries, sectors and technologies. For example, 65% of the machines in our catalogue are less than 3 years old.

We are also highly competitive when it comes to providing comprehensive solutions with our machines, in the quality of our service and in a speedy supply of spares, which are delivered within 24 hours. We supply state-ofthe-art equipment and machines, engineering services for the design of customised solutions, the manufacture of turnkey production lines, process enhancement and technical support services.

The global marketplace is increasingly competitive, with highly dynamic Asian, European or American factories operating worldwide, so another crucial factor is the reliability of our machines. This reliability is evidently not obtained by chance, as it requires constant and significant investment, because we manufacture first-class machines with reliability rates of over 95%, capable of operating 24 hours a day, 7 days a week. This is particularly important if we consider that our machines are designed to last from 15 to 20 years.

There is clear evidence to support this, as 80% of our customers come back for more. In some cases, they have repeated with us up to 7 times, as is the case with Siemens or Alstom. Each machine costs from 1.5 to 2 million euros, so our reliability generates loyalty among our customers. This is true of the railway sector with Siemens, Alstom, Bombardier or the Chinese Ministry of Railways, in the aeronautics sector with Rolls Royce, American Airlines, Japan Airlines, Iberia or Lufthansa, in the wind power field with Gamesa, General Electric or Vestas, and in the oil and gas industry with Tenaris, Aker Solutions, Gazpromtrubinvest, Vallourrec or TPCO, among many others. All these customers also use our machines in their own projects in China or India.

In the aeronautics sector, we specialise in landing gear and turbine blades, and our machines are used by more than 90% of all leading airlines. This is something for The Economic Observer readers to bear in mind whenever they catch a plane…

Ultimately, for customers who need a

9

What aspects of DANOBATGROUP can be highlighted in China?

R.B: That we are capable of adapting and customising our machines, services and even our human resources to our customers’ requirements.

Not only do we sell machines, but we also provide an important added value service on a local scale, as we have our own resources in China, including highly qualified teams capable of understanding what our customers need and providing tailored solutions.

We are deeply committed to remaining in the country, providing training and guaranteeing the best possible product and service. This commitment has been in place since 1988, when our local presence began.

We would like to emphasise that we believe in China in every sense: not only do we see it as a market where we buy and sell our first-class products.

We have already installed around 500 machines in China. For us, the country is a long-term market, so we are constantly investing in it in every way,

reminding our customers that they can continue to depend on us and that we will never let them down. We continue to guarantee satisfaction to all our Chinese customers, such as CSR, CNR, Ministry Of Railways, FAW, Xian Aero Engine Corp., Shengyang Aero Engine, SEW Eurodrive, Yawei Group, Wuhan Heavy Industries, CATIC or Liaoyuan Aero Machinery Works, among many others.

10

BusinessONE: SPAIN

Leading Brands of Spain

U

USP Hospitales is Spain's leading private hospital chain. Around 7,000 professional assist over two million patients a year in 35 health centres located in Spain's leading cities, as well as in Portugal, Morocco, and Angola.

How would you present USP Hospitales to our readers?

G.M.: Since its establishment in 1998, USP Hospitales has been concieved as a private, integrated and global network of assistance services, including hospitals, surgery centres, diagnostic centres, and general hospitals. The group has consolidated itself as a market leader in the provision of health services by offering a high-quality and technologically advanced option, with rigorous professional ethics.

What have been the keys to your success and the competitive and differential advantages that made USP Hospitales a leader?

G.M.: I would say knowing how to take care of people has always been our main reason for being and we have also focused on innovation and medical excellence, thanks to ongoing investment in new technology and agreements with leading medical teams in the sector. We have also been able to successfully establish important alliances with well-known prestigious centres on a international level, and have known how to adapt to our environment quickly and efficiently, enabling us to grow until we consolidated our position as leaders thanks to the talent, efforts, ambition, and professionalism of all our employees and collaborators.

And, above all, I would highlight that ever since we founded the company, as well as operating hospitals, we have developed our own know-how. I'm talking about a range of software for hospital management technology, a central buying group, marketing and communications techniques, financial reporting, hospital construction and medical technology engineering, and so on, and this proprietary know-how is what we are exporting to other countries today.

Which means everything we have developed at the heart of USP are tools that, of course, enable us to manage the company, but, at the same time, form part of the portfolio we are exporting and which other nations or foreign clients are purchasing.

Simply put, we do two important things: the first is to import patients, as many patients from other countries come expressly to be treated in our hospitals in Spain. And, secondly, we export our own technology.

All of this places us as a company that has a great position and a business with an exceptional future.

The group has also begun the international expansion process.

What are the main markets the company is focusing on for now?

need to work closely with important and powerful strategic allies.

G.M.: Yes, we started our internationalisation process three years ago and have put into motion an expansion structure we already designed a while ago but which we had not implemented because it was not the right time. It is now.

In fact, the first alliance we signed was with General Electric, which naturally fills us with pride and, since then, we have signed many more. Working hand-in-hand with people who have talent and capacity we can go much farther.

At present, our sights are fixed on the countries closest to us geographically, the south of Europe and north Africa, and the first countries where we have decided to invest have been Portugal and Morocco.

USP Hospitales is also part of FMRE, Foro de Marcas Renombradas Españolas, which only welcomes Spanish brands that have a prestigious reputation worldwide.

In Morocco, to open up the market and business lines, we have created a company, USP Hospitales Maroc, as Morocco is a nation with notable possibilities for synergy in terms of the exchange of patients and bidirectional tourism. The objective of the new company is to establish links with the Moroccan government with the aim of offering our experience and know-how to develop a means of collaboration that will contribute to the improvement of the country's healthcare management. We are also participating in an international tender with a Moroccan partner to manage a chain of 13 hospitals in Morocco. This is an important project in which our respective governments, Spanish and Moroccan, are very interested, and so represents a major initiative for us, of significant responsibility and massive strategic interest.

In Portugal, we have signed an agreement to offer advisory services for the management of the HPP Saúde network and its six private hospitals, located in the cities of Lisbon, Porto, Sangalhos, Faro and Lagos. As well as transferring our know-how and advice for healthcare, business, and technological management to them, the reputation of the network of centres will have been strengthened by numerous social projects, fundamentally in the areas of disability and infants at risk, organised through the USP Fundación Alex.

At the start of 2009, we signed an advisory agreement to provide and manage medical services with the most modern hospital facility in the Angolan capital, the Clinica Girassol.

We continue to receive many requests to manage very interesting projects in Africa, the Middle East and Arab Emirates, and, above all, from countries in the Mediterranean.

For us, all those markets interested in our products would be interesting, where we can bring and develop our added value and could find suitable local partners.

Taking into account that this interview is for a Chinese newspaper, I want to say I have two good friends, very well-placed people, who are truly fascinated by China and who always suggest we should study our entry into the Asian giant. These two people are Juan Antonio Samaranch, the honorary president of the International Olympic Committee, and Dr Pedro Nueno, president of CEIBS. Today we are undertaking very important projects in countries distant

G.M.: Yes, we also became a part of FMRE just a few years after our foundation.

I would also like to point out that we have received the Common and IBM Power Systems Innovation Awards international award, which is a programme that recognises and represents the highest level of innovation and best practice in the information services area. It is held in London and also makes us enormously proud, as this award is given to the most outstanding hospital projects in the world.

Gabriel Masfurroll President and Founder USP HOSPITALES www.usphospitales.com from Spain and, to do a project so far away, you have to have good travelling companions, do things properly, and act honourably in the country where you want to do business, providing as much added value as possible.

concentrate on international expansion, with a very open mind, always listening from the point of view of those you speak to, understanding what the demands of their market are, to be able to adapt your product to their needs.

My son has just returned from a trip to China and he told me: “Dad, we would need 1,000 lifetimes to really get to know China.”

And that approach is working very well for us. If there is already lots of diversity in our little Spain, where every one of the 17 regions has its own peculiarities and different traits, why would the same thing not happen overseas, and in every country worldwide? We have learnt a lot from adaptation.

China is a challenge, of course, but we are very realistic and in China, at present, building hospitals and operating would be very risky.

What we would be very open to, would be exporting our know-how, as well as advising and helping in the management of hospital projects in China hand-in-hand with a local partner. Why not?

So we're not discounting anything in China, but we do want to move forward calmly because we want to do things well.

Would USP Hospitales be a company that is receptive to purely economic investment that could come from Chinese investors today?

G.M.: Of course we would be open to that possibility. We are a company that has had various partners and groups who have invested in our company because they believed in the project, and this is fundamental, because we offer the same thing we are asking for, which is to say we expect the same kind of respect we offer: respect for the company's principles, its values, its philosophy, and, overall, our whole business project. Someone who trusts the company and believes in the project will always be welcomed by us, and if that is a Chinese investor, why not?

I never tire of repeating the advantages of strategic alliances. For example, we signed a strategic alliance last year with the Universidad Autónoma de Barcelona, which is considered one of the leading universities in healthcare sciences in Spain, to educate professionals on an international level and this is very important.

Well, I think the Chinese will learn English, and if they do learn English and do so well, China, without doubt, may become the most important country in the world in the second half of the 21st century.

It is vital to take language into account: English and, perhaps, also Spanish. I think Spanish is gaining growing importance as a language and that it has some very influential markets, even in the United States.

I think China as a nation is only comparable to India, with some differences. I travel internationally to smaller, emerging countries that are growing a lot in the West and what I am finding, and I think is very important to note, is that there are increasingly more very well-educated and well-trained people who, as well as their own language, also speak English, French, and Spanish correctly. This human capital is the real engine behind these countries and will also prove to be key to the definitive success of China.

I would like to make clear my deepest admiration for the Chinese government's management. I think the nation is doing a great job, it is undergoing a very smooth transition from a totalitarian regime to a democratic one, from a communist system to a pseudocapitalist one, and I also know that if I think leading a company with 7,000 employees is a challenge, I can imagine it is not easy to lead a country of more than 1.3 billion people.

At some point in China's development there will be a decisive point, and I think the way the country is opening up is simply exemplary. And you have to take into account that all of this growth needs to be based on its people's education. It would be very interesting to develop an education project in China and, as I mentioned before, the Universidad Autónoma de Barcelona has a very prestigious reputation internationally.

What should our readers, top-level businesspeople and investors, know and remember about Spain in general and USP in particular?

G.M: Above all, what the Chinese should take into account is that even though Spain may be better known internationally for tourism, for its beaches and wonderful climate, the Spanish also have very clear ideas on a business level.

One of the main advantages USP Hospitales has, and this is something we always wanted to define in our strategic plan, is that we always go into a new country with the maximum of respect and sensitivity: we try to understand their customs and traditions well, and strive to adapt all we can bring to their culture and way of life. We never try to impose our principles and values. Each country is different, with its own way of life and its own rules, and you have to respect and strengthen those for the end result to be a success.

INSTITUT UNIVERSITARI DEXEUS

I believe that is the correct way to So growing, then, but sustainably...

G.M.: That's right. And especially now, while the world is going through a time of economic uncertainty and nobody is risking a forecast on exactly what might happen.

We want to progress carefully and do things well, carry on working so our business in Spain keeps working well, as our results are getting better every year, and, from here on, develop new projects which are interesting to us beyond our own borders.

Growth through alliances and the export of your own know-how have been part of USP's DNA since its creation...

G.M.: We have always been a very active group and when we designed our model, we did so with a lot of passion and with very clear ideas.

www.usphospitales.com | international@usphospitales.com

Starting from our original size, we were always conscious that, to achieve our objectives and the magnitude of the project we wanted to build, we would

Through our flagship, which is the Instituto Universitario Dexeus and which is affiliated with the Universidad Autónoma de Barcelona, we decided, together with the rectorate, to expand our collaboration and work together in the education field, so why not do this in China also?

Emerging nations, and especially China which is one of the largest and most important, have to base their growth above all on education and we can do lots of good work in this field, both training professionals in China and bringing Chinese professionals to be trained in Spain in the healthcare sciences: medicine, nursing, biotechnology, and so on.

When we thought about whether China would become an important engine in the global economy, another important aspect has to be taken into account, which is language. You can wonder what will happen in the future, if the whole world will end up speaking Chinese or if the Chinese will need to learn English as the rest of the planet has done.

Our country's big secret is its impressive strategic situation in Europe, we are the perfect hub for global companies that wish to operate from our country into markets in the European Union, Latin America, North America, and Africa.

This is the great opportunity that the Chinese should see in Spain: investing in Spain is guaranteeing a distribution centre for all their products and services to the rest of the world, and Spain has also got excellent terrestrial, air, and maritime infrastructure.

As regards USP Hospitales, I would like to point out to potential Chinese partners and investors that we have developed a very high level of hospital technology which could be used in China, as is already being done in other countries.

In fact, I feel we are a fantastic option for a Chinese partner or investor who wants to invest in the healthcare sector, as our experience and knowhow can be transferred perfectly to their country.

BusinessONE: SPAIN

Leading Brands of Spain

L

et's begin with an introductory description for our readers about MAPFRE's size and structure at present.

A.M: MAPFRE is an independent Spanish business group that encompasses insurance, reinsurance, financial, property, and service activities.

The Group's mother company is a holding company called MAPFRE S.A. whose shares are listed on the Madrid and Barcelona stock exchanges, and are part of the IBEX 35, DOW JONES Stoxx Insurance, MSCI Spain, FTSE All-Word Developed Europe Index, FTSE4Good and FTSE4Good IBEX indexes.

Although MAPFRE is essentially an insurance group which covers all sectors of insurance and reinsurance, in Spain it also deals with investment fund management, pension plans, and other service activities.

MAPFRE is the leader in the Spanish insurance sector, with a significant international reach in direct insurance, reinsurance, and assistance.

We offer a specific competitive solution for each of our client's needs, for their property and possessions, but, basically, as I said, we offer insurance and reinsurance.

As a completely independent Spanish group, we don't depend on banks or other business groups. The ownership of most of MAPFRE's shares, around 64%, belongs to Fundación MAPFRE, which is active in general interest sectors such social action, insurance science, culture, road safety, accident prevention, health and the environment. This structure guarantees the Group's independence and its institutional stability. The rest of the

sity – in association or alliance with a Chinese company.

we are a group with a very strong business culture, which gives significant importance to values and a real focus on providing excellent service to our policyholders. Our employees are very committed to the company's identity and I think this dedication has been another key to MAPFRE's successful growth throughout history.

Is that an objective for MAPFRE in the medium or long term?

A.M: That will depend, above all, on the right opportunity presenting itself.

There are large insurance companies with global size and reach already in China. What are main strengths MAPFRE has to compete with other global giants?

Our workforce is made up of 34,603 people: 16,838 in Spain, 16,091 in America, and 1,674 in other nations.

A.M: The Spanish insurance sector, in general, and MAPFRE in particular is at the same level as any company worldwide today in terms of products, management, and customer service.

As a result, we believe we are fully capable of and accustomed to competing with other global companies. In Spain, for example, we are the leading insurance group, and compete with major insurers like AZA and Allianz.

In fiscal year 2008, we posted consolidated revenues of more than 18.27 billion Euros, of which more than 14.3 billion came from direct insurance and reinsurance policies. Our gross profits reached 1.38 billion Euros, and our total consolidated assets were in excess of 47.76 billion Euros.

What progress has been made with MAPFRE's international expansion?

We believe in our management model, which has demonstrated its effectiveness in Spain, in Latin America, and in other markets where we have a significant presence.

A.M: Our market is concentrated mainly in Spain, Europe, and Latin America, although, in 2008, the Group was present in a total of 45 countries, through 258 companies. Outside of Spain, our largest networks are in Latin America's leading nations, a region where we are the leaders in non-life insurance.

We've come through a period of significant financial turmoil worldwide. What are your forecasts for the future?

A.M: Spain has faced a serious

We are also present in the United States of America, Portugal, Turkey, China, and Philippines, and, in the assistance sector, we operate in 44 countries through 43 subsidiary companies and five representative offices.

In total, at the end of the 2008 fiscal year the Group had a total of 2,546 offices and 17,765 employees outside Spain.

The Group also has a professional

customer services. Our insurance companies have the highest level of management, products and customer service.

MAPFRE has demonstrated its stability and leadership, even in times of serious crises like the current one, and that stability comes essentially from rigorous management, professionalism, and the quality of our customer service.

What should China know remember about MAPFRE?

developed its highest levels of international expansion to date.

there is much to be done in the insurance sector in the Asian giant.

We began in the 80s, have been the leading non-life insurance company for a number of years, and have an important presence and roots there: we already have over 2,000 offices open to the public, using the same model as in Spain, where we have a very strong network of our own offices, as well as those we have through agreements with banks that sell our insurance.

We hope to have the opportunity to participate in the strong potential for growth in the Chinese market and are a company that can offer a lot to China in terms of values, business culture, technology, know-how and products.

What is MAPFRE's growth model for the next few years?

A.M: MAPFRE is a company that has always maintained a strong rate of growth. We grow in an organic way, by selling our products and also through mergers, as has been the case in Latin American and, more recently, in the United States and Turkey.

In Latin America, our growth objectives are to strengthen our presence in important economics like Brazil and Mexico.

A.M: That we have a lot to offer the Chinese market, perhaps working together with a Chinese company that identifies with our values: high ethical standards of management, and a commitment to responsible relationships with society, our clients, our shareholders, and our employees.

We also have lots to offer in the development of the insurance sector in China through technology and thanks to our experience with a wide range of products.

In line with the spectacular growth China has undergone, it is likely the nation will continue to improve living standards and, logically, that will result in a very strong demand for the insurance sector, just as has taken place in Spain over the last 40 years. In China, MAPFRE could apply all the

MAPFRE has accepted reinsurance in China since the start of the 1980s, but it was not until 2004 when we began to operate directly in the country through our Road China subsidiary, a company that offers roadside assistance services from its offices in Beijing and Shanghai.

The establishment of this subsidiary was the first step towards a more active presence in the Asian giant for MAPFRE, and in 2005 we also opened a representative office in Beijing, to have a base from which to get to know the Chinese market in depth and to study its potential.

Our next step will be to have a presence in the direct insurance business, probably – or out of neces-

MAPFRE BRASIL Sao Paulo situation, but the Spanish financial sector is one of the most developed technologically and in terms of

knowledge it has acquired in Spain and in Latin America.

In the United States, we want to expand the reach of the company we have acquired, the Commerce Insurance Group, and make it larger and, in India and China, which are two big markets for the future, we will be studying potential opportunities.

shares are in the hands of investors through the stock exchanges.

Since 2000, MAPFRE has a second partner through a major strategic alliance with Caja Madrid, the mother company of the fourth largest financial group in Spain. Thanks to our alliance, we have incorporated Caja Madrid's insurance business and, at the same time, our network collaborates with them to make the most out of both groups' commercial networks for the distribution of insurance and financial products.

I think it is also worth highlighting that

reinsurer, MAPFRE RE, which is active around the world, with three subsidiary companies and 15 representative offices. At the end of fiscal year 2008, MAPFRE RE was 15th in the worldwide reinsurance ranking.

MAPFRE is a perfect example of how Spain could be an excellent platform for global companies who wish to enter the European and Latin American markets from here.

A.M: That's true, without a doubt, as we are present in all of the biggest countries in Latin America and it has been the region where MAPFRE has

and

Alberto Manzano Executive First Vice-Chairman MAPFRE www.mapfre.com

So we are definitely a good entry point to the Latin American market.

MAPFRE MAJADAHONDA, MADRID

11

In Europe, it is not easy to grow via mergers, but we are not giving up on the idea of them in order to gain a greater presence in direct insurance.

Which means that acquisitions will remain on the agenda...

A.M: Well, we are in an uncertain time, in which we have to be especially prudent with acquisitions, but we will definitely take a very close look at any emerging opportunities.

Let's talk about China, the nation that has changed the world's economy centre of gravity.

A.M: The potential China has right now as a market is unrivalled by any other country or market in the world, and

AN INSURANCE, REINSURANCE AND SERVICES COMP

ANY

BREAKING BARRIERS A multinational company specialising in Assistance and Specialt y Risks , home, health and travel sectors W Back ed by 20 years' e xperience W e are present in over 40 countries in Europe, America, Asia, Mi ddle East and Africa

12

BusinessONE: SPAIN

Leading Brands of Spain

M

Marqués de Cáceres, the most in-demand Spanish wine brand among the US' most prestigious restaurants, has been selected five times as the favourite brand of Spanish wines by prestigious American magazine Wine & Spirits.

We have a wide range of wines covering various price segments, with their consumption specifically suited to different occasions.

The brand is present in more than 120 countries, consigning around 50% of its production for export and its leading markets are the US, Great Britain, Norway, Switzerland, Mexico, Belgium, Germany, and France.

Marqués de Cáceres is one of the leading references among Spanish wines and has a lot of French culture, as my family as been in the wine world for four generations and we have acquired long and profound experience in various French wine-growing areas, especially in Bordeaux where we previously owned a Gran Cru Classé, Chateau Camensac, and Chateau Larose Trintaudon, a Cru Bourgeois Supérieur.

Let's begin by highlighting the competitive and differential advantages of Marqués de Cáceres for our readers, those identifying characteristics which have made it the most prestigious Spanish wine brand worldwide: C.F.: Indeed, one of our main characteristics is the image and prestige our wines have internationally.

Since its foundation in 1970, Marqués de Cáceres has undergone significant expansion around the world, to become a leading brand which enjoys high recognition both among consumers and the specialised press.

had the bad luck that the crisis hit just as I did.

As I had previously been part of the company for so many years, I already had my own ideas, but I also understood that I had to respect my father's management philosophy and, because of my character, I felt it was better to get to the finish line slowly instead of not at all, so I began to define new lines of management and control of the business at the start of 2008. Halfway through that year, we were able to see that the crisis was deepening and that many economic and moral values were in balance around the world, so that, above all, we needed to maintain that long-term policy which had accompanied us from day one, but now it was necessary to rethink it every two months.

As well as our legendary red wines, we also produce a young, fruity and elegant rose wine, and three white wines: dry, semi-dry, and matured in oak.

It has been an intense, and at the same time stimulating, process as difficulties, if they are dealt with well, can provide a positive impetus. The risk for any company – and not just family businesses – of believing that everything is fine as it is and that everything is naturally going to follow its course without the need to do anything is the beginning of the end: we always have to keep moving forward and be well aware of market needs and trends.

This important baggage has helped us not only in wine-growing experience, but also in making sure our wines are in harmony with market trends, as the goal, in the end, is to successfully meet consumer expectations.

The first few years were not easy, but the vineyard became known little by little, taking our brand to the highest levels of recognition among Spanish fine wines.

Cristina Forner Vives President Marqués de Cáceres www.marquesdecaceres.com Investment in human capital has always been very important to us, we have been very rigorous when it came to selecting our management, and they have had to integrate completely into our business culture.

We grow and produce Rioja qualified denomination of origin wines in a privileged environment which enables us to obtain wines with great personality, rich in extracts, and with good concentration and colour.

Our range of wines has burgundy, red, and gold labels which could well receive a warm reception among potential Chinese consumers, as they facilitate an immediate cultural connection at first sight.

Since I took over the company, we have focused specifically on developing our export activity and on organising coherent distribution in the long term, rather than what many companies in Spain used to do which was to sell a truckload and invoice it, and the job was done. When we sold a truckload that was when our work began, as we had to help and train the personnel that were starting out, and show them how to communicate the quality of our product so that they would know how we wanted to position it.

We are in competition with many wine-growing companies. lots of whom are from the new world and operate with very strong budgets and financial investment. Obviously that helps them, but in the end the essence of craftsmanship cannot be bought, but comes from the efforts and enthusiasm of a team of people, and the commitment of a family and shareholders.

There are many important values tied up behind a prestigious brand.

A visionary…

C.F.: He created that new school of wine-making to produce red wines where the oak influence was subtle, with the goal of letting the fruit express itself. We have also produced white

and rose wines which are full of fruit, fresh, lively, and are not on the edge of turning rotten.

All of this is the base which allowed us to take off: being committed to our product, acting on long-term policies, emphasising quality through the selection of grapes, using a high proportion of French oak, taking painstaking steps with refining in the bottle... and, of course, after all this, we had to conquer markets.

In 1975, my father began to export through some contacts in Bordeaux, as, at that time, our credibility was backed up by our family's lengthy experience in France. It was all about leaning on doors that were not easy to open and, in that sense, our history and visibility in France helped a lot.

Subsequently, we focused on establishing ourselves in European countries and the United States, and when I joined the company, at the end of 1983, I spent 14 years developing sales in the United States and opening up new markets in Europe, Asia, and Central and South America.

In this sense, the period of economic difficulties which has been felt around the world has been an exercise in humility for us and has allowed us to refine our ability to observe, collect information, and learn all about what is going on around us. In the end, the essential thing is coming to a series of conclusions that enable you to guarantee the company's longevity.

The challenges your father had to face when the company started are different to those posed by the world today.

C.F.: Yes, today the environment is much more sophisticated, more competitive, cycles of change are much quicker, and you constantly have to question yourself.

I believe that this crisis has been a shake-up, a painful one for some and less so for others. Fortunately, I have had the good fortune to take the reins of a serious, healthy, and consistent company, and obviously that had allowed us to look to the future with more ease.

To the traditional essence of Marqués de Cáceres you also have to add a significant technical investment...

C.F.: Yes, we have very advanced installations and technical facilities which enable us to reach the highest

Gaudium, and MC. This is a selection of grapes from old vines where, rather than collecting 45 litres a hectare, we collect 12 or 18.

In our company, we have a deep respect for the prestige and quality of high-level wines, which means that we only produce them in the best years and from grape selections that come from the oldest vineyards. We go through a painstakingly careful selection process from the best vineyards in the area, checking the quality of the grapes periodically, and do the harvest manually. This requires very careful organisation: we have invested in a selection table with a team of people who make the selection grape by grape and offload the grapes in 15 kilo boxes.

In short, we make many investments year after year in barrels for wine-making, in equipment to improve labelling and to improve palletisation.

We are trying to qualify all of the artisan and mechanical work in order to remain competitive, but traditional processes and tasks like grape harvesting, racking barrels, and the wine-making itself are all still intact.

You could say that we are the perfect blend of tradition and modernity.

Let's talk about China, now a market that cannot be avoided for any company with global ambitions.

What does China mean for Marqués de Cáceres today and what place does the Asian giant occupy in the company's plans for the future?

C.F.: For Marqués de Cáceres, China represents a challenge and, at the same time, what I would call a pending question, which is a very motivating attraction for us.

We know that China represents a huge area for the development of our sales, which are very limited for the moment.

As it is such a large and dynamic country, we are thinking about focusing first on the bigger areas and, because we are prudent people, we try to make every step we take count, so we are willing to progress little by little, but we know China could become a very important market for us in the next ten years.

We don't believe in miracles in this company, any success we achieve is always based on taking things step by step, cementing every stone in place, and giving our all to the task of making our wines known, associating them with the art of living, and achieving a certain cultural refinement.

Today, the growth in consumption in China is mostly in cheaper wines, so we are more ready for what comes next, the time that will come in the next few years, when wine in China is

Later, we created an export team which handles various areas and which has gone further than ever with the development of our marketing, as today we export 50% of our production to 120 countries worldwide.

I believe that Marqués de Cáceres has been the exception in the Riojan wine-making panorama, given that, at the outset, the company took off thanks to the export market. The Spanish market was something we started to organise later, in 1980, when we had already been exporting for five years.

Even though you started selling in the 80s, it seems as if Marqués de Cáceres has been around forever: it has a very rooted brand position in consumer's minds.

C.F.: That's true. Marqués de Cáceres has become part of the market as a reference and representative of what La Rioja is, associated with a high level of quality and prestige, and all that has been achieved in just 29 years, although, as I say, with lots of effort and dedication.

When my father retired in November 2008, I had been working in the company for 24 years, specifically in the commercial and export areas and also in the assembly of our wines and in the internal organisation of the company. Morally, I felt perfectly ready to take over from my father and assume control of the company, but I

quality, always respecting our production traditions.

We have some 38 million litres of wine in permanent stock, a collection of more than 40,000 French and American oak barrels, and bottlers who hold around 10 million bottles.

From the vineyard itself, we directly control supplies on almost 2,000 hectares and are constantly following the progress of each plot. We have all of this data completely computerised so that we have perfect historical records of the vineyard. This enables us to reach exactly the quality desired and so adapt our wine-making techniques to the plots and to our Crianza and Reserva wines, as well for the prestigious Gran Reserva,

associated and identified with sophistication and with the culture of fine cuisine. In the meanwhile, we are preparing to work with the goal of winning over the first lovers of good wines in China.

But, in the end, China is on Marqués de Cáceres map. It represents a challenge for us, and a market in which we are totally decided to working hard and in the long term.

I would like to take the opportunity to invite China's most important wine merchants to consider Marqués de Cáceres as a name of reference among Spanish wines, with the guarantee of prestige, quality, history, and seriousness that our company represents.