Perspectives of business development between Slovakia and Italia

www.sario.sk

Vicenza – Italia, 25. Novembre 2008

Slovacchia: opportunitá per le imprese del Triveneto grazie ai fondi strutturali europei

COUNTRY PROFILECOUNTRY PROFILE

MARKET OF 300 MILLION IN 1000KM

Strategic location with great export potential

Area (km2): 49,035

Population: 5.379.000

Capital: Bratislava

Member of: OECD, WTO, NATO, EU Shengen area

Eurozone (1.2009)

Source: National Bank of Slovakia

EURO implementation impact: No currency exchange risk Lower real interest rates

EURO ADOPTION IN 2009

€2009

EURO will be introduced as the official currency in 2009 with the exchange rate 1 EUR=30.126 Sk

MACROECONOMIC OVERVIEWMACROECONOMIC OVERVIEW

6,8

10,4

4,3

Growing 2007

real w

ages

pro

duct

ivit

y

GD

P

Highest economic growth in EU

Basic macroeconomic indicators 2007 (2008*)

Real GDP growth 10,4% (6%*)

Labour productivity growth 6,8% (n.a.)

Real wages growth 4,3% (4,5%*)

HICP Inflation 1,9% (4%*)

A1 positive outlook

A+ stable outlook

A positive outlook

SARIO KEY ACTIVITIES

Creation of a suitable investment and business-friendly environment in Slovakia.

Assisting with the completion of investment projects of foreign investors and ancillary services.

Consultation and solutions for individual State aid to investors; processing applications for State aid.

Mapping out and creating databases of available real estate and industrial parks.

Assisting small and medium businesses in their search for export and trade opportunities abroad.

Assisting municipalities and small and medium business applying for money from the EU structural funds and helping them complete their projects.

SARIOcore sections

Foreign TradeForeign Direct Investment

Structural funds

Ministry of Economy

Slovak Investment and Trade Development Agency SARIO

FDI SECTIONFDI SECTION

We offer a wide range of services to investors:

Provision of sector-specific information

Analyses of labor market, taxation, macroeconomics etc.

Advice on issues related to starting a business

Recommendation on ideal location and suitable real estate

Facilitation of communication with national and local authorities

Assistance with applications for investment incentives

SARIO - Real Estate DatabaseSARIO - Real Estate Database

SARIO regional representives monitor the availability of industrial ground / facilities and compile a real estate database

SARIO project managers prepare comprehensive real estate offers for potential investors according to their requirement

309 305 35 9

Greenfield Brownfield Office space Tourism

No. of real estates in database:

FOREIGN DIRECT INVESTMENTFOREIGN DIRECT INVESTMENT

Significant industrial FDI : Significant industrial FDI : Automotive Automotive Electronics Electronics

- highest per capita car production in the world

 Number of

projects

Investment Business area

(M. EUR)

Finished projects in

200764 1.277

car, electronics, machinery, textile,

plastics, metal processing

Finished projects in

1-2 Q 200822 240,3

plastics, car, electornics, machinery

Current 131

car, electronics, machinery, textile,

plastics, metal processing,

chemistry, food

SARIO Investment projects

SARIO INVESTMENT PROJECTS

Name of companyCountry of

originNumber of

new job

Investmentamount in mil. Eur

Location

SONY Japan 1500 76,3 Nitra

SAMSUNG South Korea 450 + 800 63 Galanta

SAMSUNG Electronics LCD

South Korea 1200-1400 320 Voderady

KIA Hyundai South Korea 3400 1100 Žilina

Peugeot-Citroen France 3500 750 Trnava

GFT Germany/USA 787 345 Kechnec

DELL USA 1000 + 850 8 Bratislava

Source: SARIO 2008

FDI completed projects by country 2002-2007

Source: SARIO 2008

FDI Completed projects by sector 2002-2007

10 reasons WHY SLOVAKIA ?

Location – Central European hub Political and Economic stability High Economic Growth

High Labour Productivity Highly skilled workforce

Strong engineering tradition Flexible Labour Market

19% flat tax rate Business friendly environment

UNIVERSITY EDUCATION

Universities across Slovakia & major fields of studies

Žilina12 269

Košice27 031

Banská Bystrica16 930

Bratislava70 413

Nitra23 410

Trnava18 400

Komárno

Zvolen4000

Trenčín10 204

Prešov14 178Martin

Ružomberok

Source: Institute of Education Information and Prognosis of Slovakia, 2008

Total Number of Students in 2007/2008

212 273

Graduates in 2007/2008 – 42 030

ROAD INFRASTRUCTURE

Považská Bystrica

ŽilinaDolný Kubín

Martin

Trenčín

Bratislava

Piešťany

TrnavaNitra

Nové Zámky

Nové Mestonad Váhom

Veľký Krtíš

Prievidza

Banská Bystrica

Zvolen

Lučenec

RimavskáSobota

Poprad

Spišská Nová Ves

Prešov Humenné

Michalovce

Košice

R1

R7

D1

D2

D2

D3

D1

D1

D1

D1D1

R1

R1

R3

R3

R3

R2

R2

R2

R7

R4

R4

R5

R6

D4

D4

Highway in operation

Speedway in operation

Under construction

Motorway in operation

20082010FUTURE

Existing network & construction projection

Note: Flight destinations as of January 2008

AIRPORT INFRASTRUCTURE

Bratislava

Poprad

Košice

Vienna (A)

London

ViennaPragueBratislavaDublinLondonPoprad

All major European cities

All major European & World cities

ŽilinaPrague

Flight Destinations

Industrial Zones & Clusters of suppliers

Humenne Košice

Poprad

Sladkovicovo

MalackyVrable

Roznava

D.N. VesBratislava

VW -Lozorno

Trnava

ZilinaKys. Nové Mesto

TrenčínDubnica n.Vahom

Martin

NitraHlohovec

Nove M. n. Vahom

Galanta

Presov

BanskáBystricaZvolen

Cluster for VW Slovakia

Cluster for Peugeot Citroen

Cluster for Kia Motors

Electrotechnical cluster

Wood processing zone

Steel processing industry, heavy industry zone

Chemical orientated zone

Flexible Labour Market

3 months probation period Weekly working time 40 hrs net (excluding 30 min. break) + 8 hrs overtime per week Annual leave of 20 days (25 days after 15 years of

employment) 150 hrs of overtime per year can be ordered by the employer (a further 250 hrs of overtime annually can be agreed with

employees) No obligation to pay bonuses for 150 hrs of overtime per

year Bonuses for overtime (25%) and for working on bank

holidays (50%)

Minimum monthly wage Slovakia242 EUR / month

Average monthly salary Slovakia593 EUR / month

Wages and Obligatory Contributions

710 EUR

737 EUR354 EUR

295 EUR

Slovakia

593 EUR

Czech rep. 783 EUR

Poland

Romania

Bulgaria

Hungary

Central & Eastern European Countries Comparison

* Excl. social security contributions covered by employer

Source: CE Research LLP

Salary

Slovakia - INVESTMENT AIDSlovakia - INVESTMENT AID

Slovakia - INVESTMENT AIDSlovakia - INVESTMENT AIDChance to reduce investment costs

Aid can be granted to following projects ...

Minimum required of investment

• Industrial projects mil. € 26.6 / 13.3 /

6.7

• Technological centers mil. € 1.32

• Centers of strategic services mil. € 1.16

• Tourism centers mil. € 16.6 / 8.3 /

3.3 Further requirements are set separately for each type of projects.....

INDUSTRIAL PROJECTS INDUSTRIAL PROJECTS basic requirements

6.7 mil. EUR

I

TTVTV

VVTVT

KSKSSRARA

RSRS

PPTPT

LCLC

VKVK

SSOSO

KKKKK SBSBB

POPO

GGLGL

LELE

BJBJSKSK

SPSPMLML

HEHE SVSVPPPP

SNSN

BRBR

LMLM

TSTS

NONOCACA

DKDK

RKRKMTMT

ZAZA

KMKMBYBY

PBPBPUPU

ILIL

TNTNTRTR

BBBB

ZVZV DTDTZCZC

BSBS

KAKA

LVLV

NRNRZMZM

TOTO PEPE

BNBNNMNM

PNPN

TTTT

GAGA

DSDS

MAMA

SSEE

SASA

PPKPK

SCSCBABA

HCHC

SLSL

KEKE

SSAA MM

YY

KKNN

NZNZ

PDPD

ZHZH RRVV

MIMI

26.6 mil. EUR

13.3 mil. EUR

Investment must be implemented in max. 36 months

new factory or expansion long- term assets in min. amount of 26.6 / 13.3 / 6.7 mil. EUR new machinery min. 60% of the total costs

Technological centersTechnological centers

Procurement of tangible and intangible assets in the amount of at least 40 mil. SKK (1.2M EUR)

At least 50 % of procured assets have to be covered by own equity

At least 60 % out of the total amount of new employees have to achieve university education

Procurement of new production and technology equipment.

Centers of Strategic ServicesCenters of Strategic Services

Procurement of tangible an intangible assets in the amount of at least 35 mil. SKK (1M EUR);

At least 50 % of procured assets have to be covered by own equity;

At least 30 % out of the total amount of new employees have to achieve university education;

Procurement of new production and technology equipment.

ELIGIBLE COSTSELIGIBLE COSTS

include costs of:

Land + Buildings + New machinery

Licenses + Patent rights + Know how

50%

40%

50%

How much of eligible cost can be covered by aid?

FORMS OF FORMS OF INVESTMENT AIDINVESTMENT AID Cash grant Corporate income tax relief Contributions on newly created jobs Transfer of real estate for a discounted price

DDECISION ECISION ON GRANTING OF AIDON GRANTING OF AIDDecisive factors:Region of investment Number of new jobs, Amount of investmentAdded value of investmentOverall importance for economy

In period 2002-2007 aid for 84 Projects (over 1 bn.EUR)

Foreign Trade SectionDepartments

Regional offices

International Communication

SARIO Information Centre

SARIO

Slovak Investment & Trade Development Agency

Main activities on TRADE

Participation on Expositions and Trade Fairs Organization of business missions abroad and

foreign missions in Slovakia Assistance to SME related to their promotion

abroad On-line databases (S.I.C.) Matchmaking services Subcontracting activities Joint ventures opportunities Presentation of investment activities abroad Special market and sector analysis

DEMAND

First contact: Territory Manager:

- Russian Federation + CIS- ASEAN countries- Central and Middle East- Central and West Europe- Balcan countries

Contact to Regional offices to find a suitable partner in Slovakia

SUPPLY

First contact: Regional managers

Contact to Territory Manager to find a suitable foreign partner

How to cooperate with Foreign Trade

S.I.C. - SARIO Information CentreAt SIC you can find following: Good suppliers Investment partners Information about international tenders Partners for joint ventures New subcontractors

Slovak subcontracting companies operate in the following industries: Mechanics Electro mechanics Electronics Plastic and rubber Wood and furniture Textile and clothing

http://www.sic.sario.sk

Slovak Matchmaking Fair

Unique & the most important subcontracting business event in Slovakia

Mission – find for you a suitable cooperation partner from various sectors of industry in Slovakia

Number of companies participated: 240 Embassies attended: 16 Combined Chambers of Commerce +

organizations: 8 Number of visitors/persons: 564 Sector represented: machine engineering,

electrotechnics, electronics, metallurgy, plastics, IT, power engineering

Partner country: Czech Republic

III. Slovak Matchmaking Fair 2009

Place: Kosice-Prešov cities (Slovakia) Date: November 2009

Represented sectors: machinery and automotive electro technical industry metallurgy plastic and chemistry agriculture and food industry IT (soft- and hardware) wood-processing

Bonus: Matchmaking meetings Many kinds of presentations Cultural and culinary adventure

Get the best of east Slovakia high potential

Subcontracting

Volkswagen SlovakiaJohnson ControlsSommer Allibert SystemtechnikHeilandBAZ-Inalfa Metal, BAZ-NaskomKablo PirelliPresskamTechnické skloBrose SlovakiaSAI Automotive, SAS Automot.Slovakia Door CompanyGrupo Antolin Plastic OmniumLear CorporationInergy Automotive Systems

Leoni AutokabelDMD Holding

SACHS Lisovňa TrnavaZlieváreň TrnavaTZK BOGE Slovakia

VW Elektrické systémySlužba vdiSEC Plastika NitraVúsapl

. Považská Bystrica

Chemni UsipPSLPS VojusFLAMM AdtoolSULE IKS

ZVL ŽilinaVURALKrasplast Krasňany

VSŽ KošiceVSS

ZVL AutoVAPGBIFragokov

. Poprad

TATRAMATTATRAMAT QuasarSchüle Slovakia

Michalovce . SiemensMEZ InžinieringMireal

Snina .

VihorlatMOPS Press

Prievidza .

YAZAKI Debnár Slovakia

. Žiar nad Hronom

ZSNP ZlieváreňZSNP Rautenbach ZSNP Foundry

. Kysucké Nové Mesto

KLF-ZVLINA

Čadca .

AVC Čadca

Bytča .

Rubena SlovakiaKinex

Púchov .

EyblMatadorMakyta

Dubnica nad Váhom .ZŤS Metalurgia .

Liptovský Hrádok

TESLA L. Hrádok

Dolný Kubín .

DANAMetalsintMIBA Slovakia

. Nové Mesto n. V.

Magna SlovtecaSlovBus . Myjava

SAM HoldingMOTOSAM

. Brezová pod Bradlom

Subtil SlovakiaPFS

Humenné . Chemes

Smrečina Holding

Krompachy .

SEZ

. Dunajská StredaSCHÜTT

Banská Štiavnica .

AkuTradeRotobalance

. Detva

PPS Detva Holding. Hodruša-Hámre

Kto

. Vráble

Pal-InalfaTesmechŠvec a spol.

Topoľčany .

Martinmetal-KováčňaVW Martin

. KolárovoKromberg-Schubert

Bánovce n.B. .

TATRA Sipox

SAO

. HnúšťaTechnická Guma

. Podbrezová

Železiarne Podbrezová

. Hriňová

Hriňovské strojárne

Dol. Vestenice .

Contitech VegumContitech Vib.Cont

Vlkanová .

KüsterWitzenmann

April 20th,2003

.Senica

Delphi

.Veľký Meder

Motokom

Edscha

. Nové Zámky

Osram

. Stropkov

Tesla Stropkov

SEWS

SARIO „made in slovakia“ project for 3 years

Promotion and support of Slovak traditional, original and top class goods

Activities: • new internet portal• professional personnel • “exporter of the year” and “product of the year” • global promotion “Made in Slovakia”• workshops & seminars in Slovakia and abroad

Partners: • Ministry of Economy• National Agency for Development of SME• Chamber of Commerce and Industry• municipalities• entrepreneurs from Slovakia• foreign partners (organizations and companies)

NEW: on-line „Automotive database“

Complete information database of sub-suppliers network in automotive industry, suppliers for production of various vehicles (bus, microbus, omnibus, motorbike, truck, trailer, semi-trailer)

Circa 400 companies registered

New portal database with opportunity to seek producers online, limited edition of presentation CD

Partners: Ministry of Economy, Automotive Industry Association

Public accessibility 2nd quarter of 2009

EXPORT - Main Foreign Trade Partners for 2007

Germany25%

Others19%

Italy7% Austria

7%

Spain2%

Poland7%

Hungary6%France

5%

USA4%

Russia2%

CR15%

IMPORT - Main Foreign Trade Partners for 2007

Others50%

China3%

Hungary3%

Austria2%

Poland3%

Italy3%

CR8%

France2%

Germany14%

Korea3%

Russia8%

Spain1%

Foreign trade Slovakia - Italy

thous. EUR2002 2003 2004 2005 2006 2007

Export 1 614 767 1 403 665 1 373 478 1 642 559 2 080 321 2 438 366

Import 1 190 050 1 191 120 1 268 982 1 272 510 1 553 150 1 553 088

Turnover 2 804 817 2 594 786 2 642 460 2 915 069 3 633 471 3 991 454

Balance 424 717 212 545 104 496 370 049 527 170 885 277

Foreign trade Slovakia – ITALY

 Export from Slovakia to Italy 1-5 2008 (thous. EUR)Vehicles other than railway or tramway rolling-stock, and parts and accessories

282 457

Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders

273 938

Nuclear reactors, boilers, machinery and mechanical appliances 135 511Plastics and articles thereof 52 829Aluminium and articles thereof 52 615Articles of iron 38 086Paper and paperboard; articles of paper pulp, of paper or of paperboard 37 845Iron and steel 34 832

Import from Italy to Slovakia 1-5 2008 (thous. EUR)Nuclear reactors, boilers, machinery and mechanical appliances 149 774Vehicles other than railway or tramway rolling-stock, and parts and accessories

89 054

Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers

76 792

Articles of iron 60 461Plastics and articles 44 810Iron and steel 37 848

Thank you for your attention!

Juraj ŠumichrastDirector of Foreign Trade Section

SARIOSlovak Investment & Trade Development AgencyTel.: +421-2-58 260 310Cell.: +421-910 828 223Fax: +421-2-58 260 509Email: sumichrast@sario.sk

www.sario.sk