Market overviewsThe Nordic countries’construction industryby GatewayBaltic                        www.gatewaybaltic.com
We are the leading company in theBaltic states providing Market and    Export Intelligence services
In shortWe add value with our local knowledge and expertise inmarkets combined with a professional and personal approachMa...
Our way              We are a Gateway for businesses entering the             Baltic states and an opening for Baltic comp...
Finnish market                                                                                                expertMarket...
Clients
Client: VOKE IIINorway, Sweden|Kitchen, bathroom furnitureTask: To attract potential partners in Norwegian market         ...
Client: BelmastNorway| MetalworkingTask: To identify and communicate with potential partners inNorwegian market to develop...
Client: WindexSweden| PVC windows and doorsTask: To assist company in finding partners in theSwedish marketDefining the pa...
Client: TenaporsNorway| Sandwich type panels /construction materialsand heat insulation materialsTask: Identify potential ...
Client: Eco House IndustriesSweden| Manufacturer of timber frame housesTask: To attract new cooperation partners to expand...
Client: AmberWoodSweden| WoodworkingTask: Identify and communicate with potential partners in Swedishmarket to develop exp...
Common characteristics   Amongh top countries in means of GDP per capita and income in Europe   Developed markets, but w...
Sweden   Population of 9.1 million, average salary of 3,900 EUR/month   Construction turnover in 2010 reached 1,000 bill...
Key legal features: Sweden   Foreign workers from the EU do not need a work permit, but, if staying for longer than 3    ...
Norway   Population of 4.9 million, second wealthiest in the EEA after Luxembourg   Construction together with mining ge...
Key legal features: Norway   Foreign workers from the EU do not need a work permit, but, if staying for longer than 3 mon...
Finland   Population of 5.36 million, average salary about 2,900 EUR/month   State subsidized housing construction helpe...
Key legal features: Finland   Workers (from the EU) need to register with the local police department if staying    for m...
Denmark   Population of 5.6 million, average salary about 3,200 EUR/month, but tax burden of up to 57%   Construction ge...
Key legal features: Denmark   Workers (from the EU) need to register with Statsforvaltningen, the Regional    State Admin...
The main Nordic general contractors      NASDAQ OMX Nordic stock exchanges and the companies’ annual reports are a good s...
The main Nordic general contractors    The overall Nordic construction market is still relatively fragmented, despite ver...
With pleasure we willdiscuss how we can add value toyour business!Martins TiknussExport and market IntelligenceMartins.tik...
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Martins Tiknuss, Export & Market Intelligence, GatewayBaltic (Latvija), „Teisiniai reikalavimai statybos paslaugų teikimui ir darbų vykdymui Skandinavijos šalyse“ (anglų k.)

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Martins Tiknuss, Export & Market Intelligence, GatewayBaltic (Latvija), „Teisiniai reikalavimai statybos paslaugų teikimui ir darbų vykdymui Skandinavijos šalyse“ (anglų k.)

  1. 1. Market overviewsThe Nordic countries’construction industryby GatewayBaltic www.gatewaybaltic.com
  2. 2. We are the leading company in theBaltic states providing Market and Export Intelligence services
  3. 3. In shortWe add value with our local knowledge and expertise inmarkets combined with a professional and personal approachMarkets: Baltic states: Latvia, Lithuania, Estonia Nordics: Sweden, Norway, Finland, Denmark EU: Germany, Austria, France, UK, Spain and other EU Eastern Europe: Poland, Czech Republic and other CEE CIS: Russia and BelarusWe have served over250 clients in their internationalmarket developemntPartners:
  4. 4. Our way We are a Gateway for businesses entering the Baltic states and an opening for Baltic companies to international markets Analyze Act Market Intelligence Export Intelligence Market Intelligence solutions for Export Intelligence services for companies interested in up-to- companies interested to enter date market information on international markets with clients, competitors, suppliers partner screening and attraction, and markets. sales channel creation and export management.
  5. 5. Finnish market expertMarket competences Scandinavian market BalticGatewayBaltic has expert teamdeveloped a network oflocal market consultantssupporting our clients UK and Northern Russian andwith market Ireland Market Belarusian market expertintelligence, market expertentry and market Dutch market expertexpansion services Eastern Europe market expert German and Ukrainian market Austrian market expert expert French market expert Spanish market Portuguese market expert expert
  6. 6. Clients
  7. 7. Client: VOKE IIINorway, Sweden|Kitchen, bathroom furnitureTask: To attract potential partners in Norwegian market Partner searchDefining the partners Result Overall 22 companies were-Housing developers selected in Norwegian and Trade missions to Norway and 26 in Swedish market. Sweden were organized to- Construction companies meet 16 potential After communication, 8 cooperation partners and- Loghouse and panel house builders companies from each discuss the possible country have expressed collaboration in the near willingness to meet with future. the representatives. As a result of the project Voke III has done the first delivery to Norwegian market. Feedback from client: ” We really appreciate our cooperation and in our opinion Your company is in much higher league than other consultant services. The business meeting in Norway was very useful; companies are willing to cooperate with us in the future.”
  8. 8. Client: BelmastNorway| MetalworkingTask: To identify and communicate with potential partners inNorwegian market to develop export for fabricated steel structuresDefining the partners Partner search Result- Construction Identified 20 potential Organised two day trade missioncompanies partners in Norway. to Norway to meet 5 companies with assistance of representative- Mashine building After communication with from GatewayBaltic.manufacturers in potential partners, fiveenergy sector express interest to meet After the business visit to Norway, with Belmast to discuss Belmast received first order from- Similar producers potential cooperation Norwegian partner for custom possibilities. made steel constructions.
  9. 9. Client: WindexSweden| PVC windows and doorsTask: To assist company in finding partners in theSwedish marketDefining the partners Partner search Result- Wholesalers of PVC windows Overall 24 companies have been Paulius Berezuckis, Business developer,- Construction companies identified and included in the potential Windex partner list. 20 companies have been- Manufacturers of PVC windows successfully contacted. Within a short period of time and reasonable cost Gatewaybaltic managed 5 companies have expressed to select potential target customers as willingness to meet with Windex well as arrange business meeting with representatives. them. GatewayBaltic most definitely highly professional team, providing its 7 companies were interested to services right on schedule and according consider a meeting in the future. to our expectations! Great job!
  10. 10. Client: TenaporsNorway| Sandwich type panels /construction materialsand heat insulation materialsTask: Identify potential partners in Norwegian market to findnew cooperation opportunities Defining the partners: PARTNER Identification RESULT - Wholesalers of building 20 enterprises working in Business trip to Sweden were materials construction sector were organized to meet four of the identified as potential potential partners and have a - Construction companies cooperation partners. discussion about possible After communication, 6 cooperation opportunities in companies showed interest the near future. regarding potential cooperation With one of the largest possibilities with Tenapors. construction companies in Norway, Tenapors has started cooperation.
  11. 11. Client: Eco House IndustriesSweden| Manufacturer of timber frame housesTask: To attract new cooperation partners to expand its operationsin Swedish market Defining the partners Partner search Result - Real estate companies We selected 31 potential Organised three day trade companies in Sweden. mission in January 2010 to - Building companies Sweden to meet 7 companies After the communication, 9 - House manufacturers companies expressed interest and discuss the further but 6 from them were willing to cooperation opportunities for meet with EHI to talk about sales of wooden frame houses possible plans in the future. to Sweden.
  12. 12. Client: AmberWoodSweden| WoodworkingTask: Identify and communicate with potential partners in Swedishmarket to develop export for fabricated solid wood flooring boardsDefining the partners Partner search Result- Importers of wood flooring Identified 20 potential partners Organised one day trade mission in Sweden. in February 2010 to Sweden to- Wholesalers of wood flooring meet 1 company. And organised After communication with- Similar producers potential partners, two one day visit of Swedish expressed interest to meet with company in Latvia.- Flooring installation servicecompanies Amber Wood to discuss First order from Swedish partner potential cooperation was received in February 2010 . possibilities.
  13. 13. Common characteristics Amongh top countries in means of GDP per capita and income in Europe Developed markets, but with a strong focus on workers’ rights and socio-democratic principles, and high tax rates (up to 60% of income): the Nordic capitalism model Infrastructure construction more stable than residential, but trends still vary in each country Very strong trade unions that have a significant impact on the labour market and are closely following foreign workers’ inflow  Unions are organized into 3 levels: a pan-country union, sector unions, and profession-unions  Registration requirements for foreign workers in all 4 countries, and only Denmark does not have a construction workers ID cards system yet  No universal minimum wage: collective agreements with the relevant unions in the industry determine the minimum pay levels  The Laval case in 2007 established some protection for foreign subcontractors against unions’ industrial action (blockades), though Laval still went bankrupt  Foreign firms still typically work as subcontractors and their specialists as unskilled workers, as mostly just local professional qualifications are recognized Main pan-EU legislation: Posted Workers Directive 96/71/EC  Posted workers must have a clear, temporary posting period and stay in the country for less than 183 days/year in order not to be regarded as local tax residents  The number of illegal construction workers in Norway, Sweden and Denmark is estimated at 20,000 or more per country Social security laws, due to EU regulations, permit home country social insurance for posted workers, if they can display an E101 form by their home country’s social insurance authority  Retrieve such forms timely, so that contracts in the Nordics are not delayed; local work time, sick pay, holiday regulations and work safety requirements still must be observed
  14. 14. Sweden Population of 9.1 million, average salary of 3,900 EUR/month Construction turnover in 2010 reached 1,000 billion SEK, or 112.3 billion EUR, and forms 8% of GDP About 500,000 or 11 % of total workforce is employed in construction Investments into construction were at 29.9 billion EUR in 2010: one of the lowest levels in the EU: the market only dipped in 2009 and early 2010, but construction volumes will have to increase, especially around Stockholm and other big cities  Stockholm area expects population growth by up to ¼ from 2 million to 2.5 million by 2030: heavy need for scaling up new housing construction  Housing construction still makes up the most of new projects in means of total floor area Undeclared construction still frequent, but also targeted by the authorities  Current illegal employment estimated at about 20,000 foreign construction workers  Inspections at sites carried out both by authorities and by own monitoring activities of the relevant unions
  15. 15. Key legal features: Sweden Foreign workers from the EU do not need a work permit, but, if staying for longer than 3 months, must register with the Swedish Migration Board If staying in Sweden for 183 or more days per year, foreign workers are considered tax residents and must pay Swedish income tax If exceeding the 320,000 SEK/year sales threshold in Sweden, a company must register locally for VAT Workers with a valid E101 form from their home social security authority do not have to pay local social security contributions, unless they qualify as tax residents Collective agreements set the minimum pay rates in construction, which are not publicly available, but the average wage in construction is at about 150 SEK/hour; the average wage overall in Sweden in 2010 was 28,400 SEK/month Building defects insurance is required for at least 10 years as of the date of the final inspection of the building (but not for works that do not require a building permit, though it is also expected to have 2-5 years warranty) An ID06 card must be carried by all workers on construction sites
  16. 16. Norway Population of 4.9 million, second wealthiest in the EEA after Luxembourg Construction together with mining generates 15% of GDP and employs 193,000 Residential construction is booming currently: in some quarters of 2011, new projects were up by 40% compared to respective periods in 2010 Very high proportion (80%) of dwellings is owned by the inhabitants, and a relatively large number of households have their own holiday houses: clients may as well be private persons Hydropower facilities, northern roads, many islands and challenging nordic climate all require infrastructure maintenance and further development A non-EU, but an EEA country – the labour environment is generally similar to that in neighbouring Nordic countries The StartBANK supplier assessment system is widely used by large contractors
  17. 17. Key legal features: Norway Foreign workers from the EU do not need a work permit, but, if staying for longer than 3 months, must request a residence permit; after staying in Norway for 183 days/year or 270 days over any 36 month period, they are regarded as tax residents; even if residing in Norway for less than 6 months, workers should apply for a tax card All contractors performing construction works in Norway worth 10,000 NOK or more must report these projects to the tax authority via the RF-1199 form (along with information on their employees sent to Norway) If exceeding the 50,000 NOK/year sales threshold in Norway, a company must register locally for VAT or appoint a local representative who shares VAT liability Workers with a valid E101 form from their home social security authority do not have to pay local social security contributions, unless they qualify as tax residents By collective agreements, the lowest wage in construction, depending on 4 qualification classes, is 96 NOK/h (for assistants with no experience and under the age of 18, while skilled workers may have a minimum rate of 159 NOK/h) New housing must have a warranty of at least 5 years (this requirement may be increased in 2012); contractor insurance is not mandatory in Norway The green Byggekort must be carried by all workers on construction sites Norwegian legislation has its specifics, relying on fair dealing between the parties in a transaction, rather than on the written contracts; B2B offers are formally binding until their expiry date
  18. 18. Finland Population of 5.36 million, average salary about 2,900 EUR/month State subsidized housing construction helped smooth out the drop in private residential projects in 2009, but now private projects have fully recovered A relatively balanced construction projects portfolio by type: residential construction continues to have the largest floor area, but public, commercial and industrial, agricultural construction clients are also active Estonian firms are bidding even as general contractors for social housing projects in Helsinki area, though none have been awarded contracts thus far Workers may be posted for up to 6 months Minimum wages by the Rakennusliitto union are based on the employee’s skill level, and range from 9.49 to 13.26 EUR/h Statutory accident insurance is mandatory and if not taken, will be covered by the Federation of Accident Insurance Institutions, but expenses of up to 2,100 EUR will be collected from the employer Rakentamisen Laatu (RALA) is the Construction Quality Association, with an online register of technically qualified companies in each specialist area Rakennusliito is the construction industry union with 85,000 members
  19. 19. Key legal features: Finland Workers (from the EU) need to register with the local police department if staying for more than 3 months; workers from the “new” EU countries must inform the Employment Office of their work in Finland within 14 days of commencing it, indicating their employment terms For foreign workers Foreign workers are considered “posted” if working in Finland for up to 6 months; employed by non-Finnish afterwards, they are regarded as tax residents companies, the Aliens Act 301/2004 and the Posted Foreign construction firms may need to register a local affiliate if construction Workers Act (1146/1999) projects in Finland last for more than 6 months; local VAT-registration is required if are the main regulations: construction projects last for 9 months or longer the construction industry Foreign firms must report all construction contracts if exceeding 5,000 EUR union Rakennusliitto has a turnover per quarter, and must provide information on all their employees active guide in English to these regulations in Finland; all workers on construction sites must have a valid ID card Statutory accident insurance is mandatory for permanent employees and for foreign companies in construction works, if the work scope is 12 man-days or greater, however, posted workers with a valid E101 form from their home social Construction professionals security authority do not have to have statutory accident insurance are certified in line with the Construction works and materials must have a warranty of at least 2 years (this EN ISO 17024 standard requirement may be increased in 2012); contractor insurance is not mandatory in Finland
  20. 20. Denmark Population of 5.6 million, average salary about 3,200 EUR/month, but tax burden of up to 57% Construction generates about 11% of GDP and employs 143,800 Residential construction at about 1/3 of the total construction volume, but has decreased, which led to many construction firms competing for state and municipal construction tenders and dropped tender prices by up to 40%: quality concerns have been expressed Farm buildings and public institutions’ offices are recently actively constructed as well – the offices because of a new 2010’ law that requires public buildings to have the highest energy efficiency level by 2015 Denmark has its own particularly strong expertise in green energy (CHP, wind farms), water processing (purification and wastewater processing) and engineering consulting: many Danish firms in these areas have activities or separate projects in the Baltics In the 1960-1970s, experiences with many building defects in public housing have led to various quality control initiatives in construction, and mandatory building defects insurance for new housing The Danish tax authorities and trade unions are known for thorough inspections at construction sites and generally, and unions have taken foreign subcontractors to court for labour law breaches Sole labourers who operate as 1-man companies do not have to register for VAT in Denmark, hence many Polish workers are required to work under such an arrangement in Denmark
  21. 21. Key legal features: Denmark Workers (from the EU) need to register with Statsforvaltningen, the Regional State Administration, if staying in Denmark for more than 3 months; construction workers can stay in Denmark for up to 12 months without paying taxes locally (in other industries, just up to 6 months) Detailed Building Regulations of 2010 in Foreign workers do not yet have to receive a special ID card, but must be English are available from entered into the RUT register as of May 2008 (otherwise a 700 EUR fine may be the Danish Ministry of charged) Economic and Business Affairs VAT registration not required only if working for a VAT-registered local company, which then must pay the VAT for the received service; otherwise, www.posting.dk is a portal foreign companies providing services in Denmark must register for VAT dedicated information on how workers should be Foreign firms must register activities in Denmark as of the first day via the form posted to Denmark 40112 to the Danish Commerce and Company Agency The Laval case also somewhat changed the Danish legislation and limited the The Danish Act on Posting is conditions under which Danish trade unions can take industrial action (typically the key document with construction site blockades) against foreign construction services regard to the working subcontractors wokring in Denmark environment requirements Building defects insurance is compulsory in Denmark, and the standard in Denmark building defects guarantee is 5 years
  22. 22. The main Nordic general contractors  NASDAQ OMX Nordic stock exchanges and the companies’ annual reports are a good source of information, including their latest developments and project portfolios: these all are listed companies  Sweden: Skanska, NCC and PEAB Denmark: MT Hojgaard  Norway: Veidekke and AF Gruppen Finland: YIT and Lemminkainen A Swedish-origin A Finnish-origin firm,international player with Swedish origin, core initially in civil One of the largest playersactivities in Europea and activities in the Nordics, engineering, but now also in Sandinavia, annual sales the Americas. Germany and in the Baltics. in residential at about 44 billion SEK and Roads construction developments and about 14,830 employees Has extended activities activities are centered in inudstrial projects. (2011). Focus on Sweden, in the U.K. and Norway Sweden and in the St. Focused on the Nordics, Norway and Finland. lately, but saw Petersburg area. An the Baltics, Russia, hasresidential projects drop upswing in housing sales residential units projects Construction yieldsin Sweden by a factor of and prices recorded in Q4 in Lithuania (2010-2011). roughly 60%, while civil 2 in 2011, though has 2011. About 17,46 0 Revenue of 4.5billion EUR engineering and industrial 10,500 workers in employees and net in 2011, employs nearly construction each roughly Sweden. earnings of about 52.5 26,000. 20% of turnover. Stable billion SEK. growth in 2009-2011. Skanska is known to Forecasts more growth in have had Lithuanian Three priorities for 2012- residential projects in A number of large subcontractors in the 2015 are growth in Norway, Norway and Sweden in shopping mall and office, U.K., though also a bad establishment in civil 2012 than in Finland and leisure facilities contracts PR case with underpaid engineering in Finland, and Denmark, and steady have been secured in the LT workers at one of its expanding residential growth in the Baltics and Nordics in late 2011. sites. developments in the main Russia. markets.
  23. 23. The main Nordic general contractors The overall Nordic construction market is still relatively fragmented, despite very strong large local players taking the bulk of the large projects Note that, while 2011’ Q4 results are positive for these firms, margins are pressed due to current projects being finished with the crisis-years’ pricesA Norwegian international The group, named after a player, whose 2011’ Finnish mythological figure, revenues increased by 2 focuses on the Balticbillion NOK to 17.7 billion, region. Net 2011’ salesafter a stagnation in 2010. grew 24% to 2.3 billion EUR in 2011, and the company Norway, Denmark and employs 8,400.Stockholm, Gothenburg and Skone areas are the key International operations focus: Norway generates generated 1/3 (previously 72% of turnover, Sweden roughly 25%) of turnover. The Nordic construction market shares in 2011 20%, Denmark 8% (in 2011). Industrial Source: NCC The group aims to expandconstruction is less than 1/5 residential construction in of total group turnover. Russia (mainly St. Petersburg) and forecasts a Forecasts growth in 2012, busy year for construction 2013 in Sweden, Norway, in Helsinki metropolitan then by 2015 a decline to area. slighlty above 2011’ level.
  24. 24. With pleasure we willdiscuss how we can add value toyour business!Martins TiknussExport and market IntelligenceMartins.tiknuss@gatewaybaltic.comGatewayBalticElizabetes 51, Riga, LatviaTel: +371 26677811www.gatewaybaltic.com

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