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FDI attraction: the italian policy

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Invest in Lombardy Days 2015, presentate le politiche dell'Italian Trade Agency. A cura di Riccardo Monti- presidente ITA

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FDI attraction: the italian policy

  1. 1. 0 FDI ATTRACTION: THE ITALIAN POLICY RICCARDO MONTI President Italian Trade Agency MEETING INVEST IN LOMBARDY MILAN, OCTOBER 14th, 2015 Riproduzione vietata – all rights reserved ©
  2. 2. 1 AGENDA • KEY FACTS AND TRENDS • FDI ATTRACTION Riproduzione vietata – all rights reserved ©
  3. 3. 2 Export of goods (bln €) Italy % change y-o-y Germany France 1,093.2 1,134.8 428.5 442.6 437.4 CAGR 2011-14 +1.9% +0.8% +2.3% +3.3% = +3.8 +3.3% -1.2% +0.2% +3.8% = +2.0% 1,058.9 1,093.6 438.5 Estimation on 1st half +5.0% Source: elaborations by MiSE on Istat and Eurostat data TREND OF EXPORT 2011-2014 Estimation on 1st half 2013 20142011 2012 2015 390.2 398.0 375.9 390.2 206.7 417.7 1st half Riproduzione vietata – all rights reserved ©
  4. 4. 3 Machinery and Electronics Chemical and Pharmaceutical Fashion Design and Furniture Food and Beverage 1.5% ’13 ’14 2.8% 1.1% 2.3% 1.2% -0.1% -0.8% ’12 1.3% -2.8% CAGR '11-'14 1.7% 0.7% -0.2% Source: elaboration by MiSE on Eurostat data ’14 3.4% 6.0% 5.8% ’12 6.0% 5.9% ’13 0.3% -1.5% 2.7% 1.0% CAGR '11-'14 5.1% 1.5% 3.2% ’14 3.3% 5.4% ’13 3.8% 5.0% -1.3% 3.7% 2.9% 5.5% 1.9% ’12 CAGR '11-'14 4.6% 1.4% 4.0% 2.7% ’14 3.8% 1.3% -0.1% ’12 -1.6% 2.6% ’13 0.2% 2.9% 2.5% CAGR '11-'14 3.1% 1.7% -0.1% 1.4% ’14 5.4% 1.6% 4.7% ’12 4.9% ’13 -0.6% 3.1% 6.8% CAGR '11-'14 5.1% 4.3% 2.0% For Germany and France estimated values based on January-November 2014 data TREND OF EXPORT BY SECTOR 2011-2014 % change y-o-y % change y-o-y % change y-o-y % change y-o-y % change y-o-y Riproduzione vietata – all rights reserved ©
  5. 5. 4 Source: elaborations by MISE on Istat data Destination areas (1st half 2015) Export trends (1st half 2015) ITALIAN EXPORT: DESTINATION AREAS AND TRENDS Riproduzione vietata – all rights reserved ©
  6. 6. 5 Source: elaboration by MiSE on WTO data – 2015 forecast by Prometeia G-20 countries Balance in manufactured goods Italy Bln €698 294 164 112 96 37 31 -28 -30 -31 -59 -61 -82 -117 -474 China Germany SouthKorea Japan Italy India Russia Brazil Mexico France Turkey Canada Australia UK USA 5th Italy Forecast 2015 Surplus = 104 bln € Balance 2013 2014 4229Industry Bln € 8988Energy excluded 9694Manufactured goods Change ‘13-’14 + 44.2 % + 1.6 % + 1.4 % TRADE BALANCE IN MANUFACTURED GOODS 2014 Riproduzione vietata – all rights reserved ©
  7. 7. 6 Source: elaboration by MiSE on WTO data, converted according exchange rate $/€ = 1.3 2.8 1,093 8.4 2.9 3.1 2.4 549 % on total world export '13 390 7.7 1,213 416 437 352 3.8 Total export '13 (bln €) ITALY HAS MAINTAINED MOST OF ITS MARKET SHARE IN 2013 VS. 2000 Riproduzione vietata – all rights reserved ©
  8. 8. 7 • According to the PMI manufacturing sector index, in May Italy ranks higher than Germany and France, thanks to our “impressive export growth” • Italy is among the strongest performers and appears “to be staging strong recovery” Source: Markit Eurozone Manufacturing PMI, June 2015. 54,8 51,1 49,4 46 48 50 52 54 56 Italy Germany France 50 = no change • PMI is an advance indication of what is really happening in the private sector economy. • Based on monthly surveys of a representative panel of around 3,000 Eurozone manufacturing firms. • Tracked variables: - Output - New orders - Stock - Employment - Prices EUROZONE PURCHASING MANAGERS’ INDEX (PMI) Riproduzione vietata – all rights reserved ©
  9. 9. 8 HUGE POTENTIAL TO INCREASE INTERNATIONALIZATION OF ITALIAN SMES Riproduzione vietata – all rights reserved ©
  10. 10. 9 6x SIMEST Total resources to support Italian export + 50 bln € additional exported goods in 2016 in key countries + 20 bln $ of FDIs inflows towards Italy 3 targets + 22k additional exporting enterprises Supporting SMEs to access global markets Expanding market shares in countries where the Italian potential is higher Attracting capitals, buyers and FDIs to foster economic growth Source: ICE IN 2015 THE LARGEST PLAN TO SUPPORT ‘MADE IN ITALY’ GOODS ICESACE Million €, 2014 vs. Exim Bank EquityInterest rate support to exporting firms Riproduzione vietata – all rights reserved ©
  11. 11. 10 Italian specialties Food AutomotiveFurniture Ships, Railcars, Planes Fashion 0% 5% 10% 15% 20% 25% 0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 Export in 2014 (Million €) WHERE TO INVEST? Source: Deloitte elaboration on Istat data Please note: this chart doesn’t show sectors with negative export growth Totalexportgrowthbetween2012and2014 Pharmaceutical Products Pharmaceuticals industry is growing at stunning rates, machinery and industrial automation is a long-time Italian leadership. Machinery and Industrial Automation Mature Italian Export Leaders Great M&A opportunities … Consumer Business Industrial Deloitte main industries: Up & Coming Exporters Construction Materials Riproduzione vietata – all rights reserved ©
  12. 12. 11 Some key figures IT’S TIME TO INVEST IN THE ITALIAN REAL ESTATE Seeing the potential• The long awaited recovery in the Italian real estate market started in 2013 and continued in 2014 with a total of € 5.3 billion of direct investment in the sector. • A strong boost came from the second half of the year due to a series of domestic and external factors that improved the confidence of investors that started to look at the Italian market with strong interest . • In 2014 the volume of foreign investments, both European and non- European, reached the 80% of the total size, returning to pre- crisis level. After years of global crisis, Italy is back in the sight of foreign investors. • In 2014 the most active investors were opportunistic American funds while sovereign funds in the Middle East continued their acquisition of trophy assets • Foreign investors have regained confidence in the Italian market faster than their local counterparts • Investment Volume 2014/2013 (€ bln) Riproduzione vietata – all rights reserved ©
  13. 13. 12 Residential property price index (31/12/2000 = 100) Source: OECD Residential property price index in Italy reflects fundamentals and there is no risk of bubble A STABLE REAL ESTATE SECTOR 70 90 110 130 150 170 190 210 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Germany Ireland Greece Spain France Italy UK Euro Area Riproduzione vietata – all rights reserved ©
  14. 14. 13 AGENDA • KEY FACTS AND TRENDS • FDI ATTRACTION Riproduzione vietata – all rights reserved ©
  15. 15. 14 A new law will: • improve the business regulations measured by the World Bank Doing Business indicators, in order to move up in the WB ranking • simplify the regulatory system for the real estate sector: - establish a common glossary - new rules to file a legal appeal The new «Doing Business» Act 50 measures to enhance competitiveness and attract resources «DESTINAZIONE ITALIA» AND «DOING BUSINESS» REFORMS PLAN Approved 65% Not yet approved 35% Riproduzione vietata – all rights reserved ©
  16. 16. 15 • ITA Agency: the only reference to foreign investors that supports throughout the life cycle of the investment carrying out three tasks: • Systematic collection of the demands, through the implementation of targeted meetings of promotion / investment generation and the provision of an integrated CRM • Preparation of the tender, through sectoral insights from expert • Investment tutoring, through practical support for the establishment and systematic management of after care activity (with the support of Invitalia) One Stop Shop Execution • Check every six months of the achievement of prefixed results • Overseeing of strategic investments that are in critical situations (high-level tutoring) MISE Committee Analysis • Define a clear strategy for the attraction of FDI identifying type of investors, countries and priority areas: MISE Committee Direction THE PROCESS FOR THE ATTRACTION OF FDI Riproduzione vietata – all rights reserved ©
  17. 17. 16 Inventory of public assets Ministry of Economy and Finance Department of the Treasury Survey of public real estate assets Web display Government Administrations, Regions, Provinces, Municipalities, Chambers of Commerce, State Property Agency, Customs, etc. • A user friendly simplified interface; • Navigable pages on three successive levels, drilling down to the information required for due diligence Data source More than 1.000 identified assets • Two categories, according with the different categories of potential investors • Located in the most interesting italian areas (Milan, Rome, Florence, Bologna, Turin, Genoa, Venice, Naples, Bari, Catania, etc.) • Minimun size 1,000 smq (up to 3,000 sqm for assets with office destination) • Range value: € 10-15 Mln • Properties available for sale BUILDING THE PORTFOLIO: PUBLIC REAL ESTATE Riproduzione vietata – all rights reserved ©
  18. 18. 17 Total Not interesting for foreign investors Italian companies not open to new investors Eligible for direct investment There are 160 companies which are defining the best options to relaunch production and investments, with the support of the Ministry of Economic Development and Local Authorities Activities carried out Experts of the Ministry and consulting firms have identified the companies with the highest potential to attract FDI depending on: • Size of the enterprise • Ownership structure • Internal assets • Finance • Positioning and competitive advantages • Investments required ~ 160 ~ 60 BUILDING THE PORTFOLIO: RELAUNCH COMPANIES Riproduzione vietata – all rights reserved ©
  19. 19. 18 Profile of about 60 companies that that are well-positioned to build partnership with, or be acquired by, international investors. COMPANY DESCRIPTION AND ACTIVITIES Background information on location, ownership, commercial activities, and supply structure context KEY FINANCIAL AND OPERATIONAL INDICATORS Overview of commercial and financial performance over the last three years REASON WHY Overview of the sector and macro-sector performance over the last three years, including export trends (where relevant) REFERENCE SCENARIO Analysis of target investors/partners, preferred operation, strength points and commercial challenges for the company and the sector, future potential markets, and public incentives (where available) BUILDING THE PORTFOLIO: CORPORATE RESTRUCTURING Riproduzione vietata – all rights reserved ©
  20. 20. 19 Company Investment Industry Region Issues Our activity Next steps Value New Petrol Joint venture Oil field n. 17 Oil & gas Pidmont Authorization denied for... Delays in procedure n. 75. First assessement Contact with President of Region Proposal of a new Decree Meeting with Local Authority Start new process at Ministry of Economic Development 1.3 billion euro 5,000 workforce Energy Solution Solar power Green energy Lazio New emission limits values New environmental assessment required Contact with Ministry of Environment Meeting with Directorate General Follow up with Directorate in charge. 170 million euro 220 workforce over 2 year Luxury Motor Company Electric engine Automotive Sicily Incentives are not available before 2016 Need to reschedule activities Assessment of existing grant scheme at Regional level Meeting with FDI competence center Analyzing EU programs for R&D 750 million € for new R&D facilities 55 additional jobs New Vegetable Oil Palm oil plant Food Veneto Need of new port infrastructure Contact with the Port Authority Built task force with the Ministry of Transport New Port Plan delivery 125 million € for new processing plant 35 additional jobs and new workforce at port ____ ________ ________ __ _______ ______ _____ _________ ______ ______ ______________ ___ ____ _____ _____________ ______ ______________ ___ ____ _____ _____________ ______ ______________ ___ ____ _____ _____________ ______ ______________ ___ ____ _____ _____________ ________ ___ _____________ ____ ________ __________ ____ ________ ________ __ _______ ______ _____ _________ ______ ______ ______________ ___ ____ _____ _____________ ______ ______________ ___ ____ _____ _____________ ______ ______________ ___ ____ _____ _____________ ______ ______________ ___ ____ _____ _____________ ________ ___ _____________ ____ ________ __________ ____ ________ ________ __ _______ ______ _____ _________ ______ ______ ______________ ___ ____ _____ _____________ ______ ______________ ___ ____ _____ _____________ ______ ______________ ___ ____ _____ _____________ ______ ______________ ___ ____ _____ _____________ ________ ___ _____________ ____ ________ __________ ____ ________ 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______________ ___ ____ _____ _____________ ______ ______________ ___ ____ _____ _____________ ______ ______________ ___ ____ _____ _____________ ________ ___ _____________ ____ ________ __________ ____ ________ ________ __ _______ ______ _____ _________ ______ ______ ______________ ___ ____ _____ _____________ ______ ______________ ___ ____ _____ _____________ ______ ______________ ___ ____ _____ _____________ ______ ______________ ___ ____ _____ _____________ ________ ___ _____________ ____ ________ __________ Caring of foreign investors in Italy • Delays in administrative procedures • Optimal use of incentives (both National and Regional) • Contact with Italian Institutional investors Frequent issues • An office dedicated to assist foreign investors along the entire project cycle (pre and post investment) • Customer care for about 20 investments throughout Italy • 6 billion euro additional FDI involved • 100% issues addressed since Sept. 2014 • 65% issues closed since Sept. 2014 Current actitvities and results • Strengthen the office with new resources • Promote the activity of the office among foreign Ambassadors in Italy • Build an effective CRM system to integrate pre and post investment assistance together with Regional offices Next steps CUSTOMER CARE Riproduzione vietata – all rights reserved ©
  21. 21. 20 A new dedicated website Online contents • Italian excellence, opportunities for foreign investors, Government policies to attract FDI Communication campaigns • WSJ, FT, The Economist, Google e YouTube • Starting a business • Hiring and managing staff • Taxation • Financial and tax incentives A new Investment Guide COMMUNICATE AND PROMOTE OPPORTUNITIES Riproduzione vietata – all rights reserved ©
  22. 22. 21 • Infrastructures, transportation; • Defense and national security; • Telecommunications, energy; • Finance and insurances; • Public services; • Research & development; • At least turn over above 300 Mln € and over 250 employees. • Transportation infrastructure; • Electricity, gas, water, telecommunication networks; • Power plants; • Health care and local services; • Diversification, no more than 20 % of the fund can be invested in a single company. • Participation in companies of “relevant national interest” in target sectors • Medium – long term investment approach in highly valued ROI companies • Minimum investment = 50 Mil. €. • F2i has a portfolio of equity stakes in companies active in all infrastructure sectors, primarily in Italy. • Two vehicles, F1 (fully invested, 1, 85 Bln Euro.), F2 (610 Mln € invested, up to 1,2 Bln €) • 15 years investment policy. 1 2 Description Target For Investors.. Co-investments: • Joint Venture and agreements of FSI with Institutional Investors such as Sovereign Wealth Funds, e.g. agreement with Russian RDIF (1bn €) and IQ Made in Italy Investment Company JV with Qatar Holding LLC (QH) (2 bn €) • Equity and bonds. Co-investments: • Participate in the Closed –end Investment Fund F2i, aimed at playing a significant role in the companies’ governance. • E.g. Alerion spa, Enel rete Gas; Geasc, HFV, Interporto Rivalta Scrivia; SEA Milan, etc. Will support investors with: • a tutor who will act as their unique contact point, and by providing a “certainty package”, including regulatory, timescale and fiscal certainty. • specific dossier on potential investments in green field, brown field, real estate… • ITA is part of a National policy to attract foreign investment and improve the competitiveness of Italian firms, assisting the foreign investor during the whole life of the investment cycle. 4 • Mostly private investors, looking at exported oriented companies with high growth potential, Multinational Firms, venture capital, distressed companies…… Real Estate Investment Funds • IVF Plus invest in real estate existing private assets (office, commercial, hotel, residential) to enhance their value by change of use, income generation, … • Invimit owned by the Ministry of Economy and IVF Plus by CDPI Sgr invest and support the disposal of real estate owned by public bodies 3 • Mostly private investors looking for high yield investment. CO-INVESTMENTSDIRECTINVESTMENTS OUR SUPPORT TO FDI Riproduzione vietata – all rights reserved ©
  23. 23. 22 Riproduzione vietata – all rights reserved ©

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