Enterprise Ireland
Annual Report and Accounts 2007
Annual Report and Accounts 2007
Export sales by client companies to Northern Europe were valued at €7.634 billion in 2007, a rise of 6.3 per cent on the previous year. Almost 50 new market presences were established by Enterprise Ireland clients in Northern Europe.
Major investments in large scale infrastructure projects in the United Kingdom, such as the Olympic Games complex and the approval of the Cross London Rail Links tunnel, have presented major opportunities for Irish construction companies and internationally-traded construction services companies and will continue to do so over the next three-year period.
In the Telecoms sector, France continues to lead the way in Europe, largely due to the government’s commitment to roll out ‘broadband for everyone’ by 2010. Consequently, the French market is a high priority for Irish companies with offerings in this space.
The market for software to support Financial Services is continuing its growth trajectory in Northern Europe and has seen some significant wins for Irish companies. This trend is set to continue as banks strive to comply with increasing regulatory demands and make efficiency gains in back-office operations.
Governments and major corporations across the region are making substantial commitments to reduce their impact on the environment and move towards carbon footprint reduction and sustainability targets. Irish companies are well positioned to secure new export sales in this sector in Northern Europe.
With investment-fuelled growth in all markets in the region, export sales by client companies were valued at €995 million in 2007, an increase of 13.2 per cent. Strategic work with well connected market experts across the Financial Services and Telecoms sectors yielded over 90 per cent of the significant sales contracts reported by clients during the year.
The German economy, the world’s largest exporter, saw a dramatic turnaround in 2007. Machinery and Equipment Production, Pharma and Medical Technologies, IT and Business Services all experienced more than 10 per cent growth. This trend is set to continue into 2008, creating opportunities for clients to develop strong and defensible market positions in one of the world’s most developed economies.
In Russia, an appreciating currency, high world energy prices, and strong economic growth of 8.1 per cent coupled with a consumer market expansion will further fuel growth as, starting in 2008 and running to 2020, Russia plans to invest $1 trillion of public money in infrastructure, alongside further investment in the Aerospace, Automotive, Nano and Biotech industries.
In Central and Eastern Europe, high foreign direct investment (FDI) levels, gross domestic product (GDP) growth of 5–6 per cent and increased consumer spending will continue to provide opportunities for Irish companies. Poland is an attractive market for many clients due to significant FDI and strengthening social and economic ties. The Czech Republic, Slovakia, Hungary and Romania again showed strong export growth in 2007.
Client company export sales to Southern Europe, the Middle East and Africa were valued at €1.292 billion in 2007, up 1.4 per cent on 2006, and Enterprise Ireland clients established 37 new market presences, predominantly in Spain, Italy and the United Arab Emirates.
Spanish GDP growth rates averaged 3.5 per cent over the last three years and there is increased appetite to invest in technology, particularly in sectors such as Telecoms, Financial Services and Manufacturing. As a result, client companies have been winning significant contracts.
Enterprise Ireland has embarked on a focused strategy for the introduction of leading engineering companies into a receptive market in Iberia, particularly in the area of farm machinery. In addition, the use of renewable energies and efficient waste and water management techniques are presenting opportunities for our clients in the environmental products and services sector.
Italy has experienced slow economic growth, with GDP increasing by an average of 1.4 per cent over the last three years. In spite of a more difficult economic environment, client companies have enjoyed robust sales in the Italian market. The Italian Lifesciences market is Europe’s third largest and home to a cluster of medical devices companies. Enterprise Ireland medical devices clients have been successful in building up strong sales in Italy.
Double digit economic growth is expected to continue in the Gulf, while Egypt, South Africa and Pakistan are proving increasingly attractive to Enterprise Ireland clients. All these target markets are liberalising their economies and becoming increasingly welcoming to international business. Sectors of particular opportunity include Construction Supply and Services, Education Services, eLearning, eGovernance, Healthcare and Aviation
Clients exporting to the Americas region performed well in 2007 despite challenging market dynamics, particularly in the United States where the dollar weakened and the economy suffered from a slumping house market, an escalating credit crunch and inflationary pressures. Export sales by client companies to the Americas were valued at €1.481 billion in 2007, an increase of 11 per cent over 2006.
The United States is both a challenging and hugely rewarding market for Irish companies. Those committed to building their presence and investing in the market are reaping returns. There are now over 200 Enterprise Ireland client companies with operations in 1,300 locations across the United States. Eight Irish companies acquired more than 20 United States businesses in 2007. The number of clients with offices in the United States has also increased more than tenfold since 1998.
During 2007 there was a strong interest by our clients in Latin America (Brazil and Mexico) and in Canada. Brazil entered a period of political and economic stability resulting in strong economic growth of over 5 per cent. Mexico is the eleventh largest economy in the world and this market presents opportunities for Irish firms in growth sectors such as Education Services, Financial Software and Telecoms. Canada also showed good growth during the year. The Canadian government is committed to investment in research, science, and education. Canadian companies, recognising their over-dependence on the United States market, are open to diversification to European suppliers.
Export sales by Enterprise Ireland clients to the Asia-Pacific region were €671 million in 2007, which was 1.6 per cent lower than in 2006. While many countries in the region experienced rapid growth, the markets continued to be highly competitive. The 2007 outcome was impacted by a number of one-off large contracts in 2006 and, in particular, by the trend in some sectors to switch supply to alternative locations, geographically closer to the market. Against this trend, clients achieved exceptional successes with export growth in excess of 20 per cent in both Australia and Korea.
China had record economic growth of over 11 per cent and a trade surplus approaching €180 billion, a 47 per cent increase on 2006. In a significant move to assist potential investors, a unified corporate tax of 25 per cent was introduced and, in line with World Trade Organisation recommendations, China progressed the development of its systems for the protection of intellectual property rights. In China and Hong Kong, Enterprise Ireland is proactively targeting a number of sectors where significant opportunities have been identified for clients, including Information Technology and Telecoms, Education Services, Environmental and Engineering Services and the Healthcare and Lifesciences sectors.
In India prospects for new business bear a direct relationship with the levels of deregulation, with the most open sectors being Telecoms, IT, Private Healthcare and Offshore Education.
In Japan, the deregulation process, most specifically in the Healthcare and Financial sectors, is creating new opportunities for Irish companies. Japan’s manufacturing industry, particularly the Electronics and Automotive sectors, offers further opportunities to Irish software companies and Japan is also an ideal market for well-positioned, high-quality consumer goods.
Australia has completed its fifteenth year of continuous economic expansion and is now home to one of the most dynamic and sophisticated financial markets in the world. Exports of Irish software solutions now account for more than 30 per cent of client exports to this market. The Agribusiness sector has also proven very successful for Irish client companies in the Engineering and Materials Handling sectors.
Irish companies in the ICT and Electronics sectors continue to make progress in Korea and the ASEAN markets, particularly in Malaysia and Singapore while Ireland’s recent membership of the Asian Development Bank (ADB) holds out prospects for increased business in the Asia-Pacific Infrastructure, Energy and Consultancy Services sectors.
