化工行业分析课件.ppt

,Noordwijk, October 4, 2004,Prof. Roland BergerChairman, Roland Berger Strategy Consultants,EU enlargement new opportunities for the chemical industry,Noordwijk, October 4, 2004Prof,The changing face of Europe Challenges and opportunities of enlargement for EU 15Opportunities for EU 15 chemical players in CEE and CISConclusion,Contents,The changing face of Europe,A.,The changing face of Europe,A.The changing face of Europe,% of EU 25,France, Germany, Italy and Benelux: Six wealthy core countries start economic integration process in 1957,1.1,EU 6 (1957)*,* 2003 data, Europes core countries had sluggish growth over the last ten years: Average growth 1.3% p.a. in Germany, 1.7% in France, 2.5% Netherlands,118.0%,75.5%,% of US,GDP USD bn,6,494,58.9%,59.0%,% of EU 25France, Germany, Ita,Denmark, Ireland and the United Kingdom: First acces-sion round after 16 years increases economic power,1.2,EU 9 (1973)*,* 2003 data, As a result of EU integration, Irelands economic growth has been out-standingly high over the past ten years: 7.6% p.a. (DK 2.1%, UK 2.8%),120.2%,76.9%,GDP USD bn,8,655,78.5%,78.8%,% of EU 25,% of US,Denmark, Ireland and the Unite,Greece: A poorer country joins the European Union in 1981 first discussions about dilution,1.3,EU 10 (1981)*,* 2003 data, Greece now has high average growth rates (3.8% p.a. from 1995-2004) partly due to European money from structural / regional funds,GDP USD bn,8,827,80.0%,80.3%,118.3%,75.6%,% of EU 25,% of US,Greece: A poorer country joins,Spain and Portugal: Accession of two less developed southern countries reduces EUs average wealth,1.4,EU 12 (1986)*,* 2003 data, Today, the southern countries contribute to EU growth: Spain (3.3% p.a. since 1995) and Portugal (2.4% p.a.) achieved high average growth rates,GDP USD bn,9,816,89.0%,89.3%,112.8%,72.2%,% of EU 25,% of US,Spain and Portugal: Accession,Sweden, Finland and Austria: Europes northern enlargement pushes up the average GDP per capita,1.5,EU 15 (1995)*,* 2003 data, Stimulus to EU growth over the past ten years: Finlands economy grew 3.5% p.a. on average, Swedens 2.7 % p.a., and Austrias 2.0% p.a.,GDP USD bn,10,534,95.5%,95.9%,114.1%,73.0%,% of EU 25,% of US,Sweden, Finland and Austria: E,Eastern Europe, Malta and Cyprus: The biggest round of enlargement ever changes the face of Europe,1.2,EU 25 (2004)*,* 2003 data, GDP growth rates of up to 6.5% p.a. in CEE (average 4.4% p.a. since 95)But: Enlargement is a big challenge for European Union to create wealth,64.0%,% of US,GDP USD bn11,028100.4%Popula,50 years of enlargement: Compared to the US, the EU has gained size at the expense of average wealth, Today, Europes GDP per capita is only about two-thirds that of the US in terms of total GDP, both economies are now comparable,EU vs. US*US=100%,59.0,77.5,80.3,89.3,95.9,100.4,78.0,102.0,106.2,123.8,130.5,156.0,75.5,76.9,75.6,72.2,73.0,64.0,1957EU 6,1973EU 9,1981EU 10,1986EU 12,1995EU 15,2004EU 25,GDP,Inhabitants,GDP per capita,US = 100,* based on 2003 data,1.3,50 years of enlargement: Compa,Wealth gap: Ten years ago, the north of the European Union was rich and the south was poor,2.1, South gained wealth in EU: From 34.4% of EU-9 (1986) to 59.8% today,1995: Gap between north and south*,1995,* 2003 data * EU 12 * Portugal, Spain, Greece,GDPUSD bn,Unemployment%,Populationm,SOUTH*,NORTH*,1,161,9,373,13.4,9.2,62,319,RATIO,9:1,GDP per capitaUSD,18,726,29,383,3:2,2:3,5:1,Wealth gap: Ten years ago, the,Today, the gap is between east and west GDP per capita in the EU 15 is four times higher than in EU 10,2.2,2004: Gap between east and west, EU support will help EU 10 economic development to reach EU 15 wealth,2003,EU 10,EU 15,493,10,534,10.5,8.5,74,381,RATIO,21:1,4:5,5:1,GDPUSD bn,Unemployment%,Populationm,GDP per capitaUSD,7,42927,6204:1Today, the gap i,EU 25 vs. US vs. Asia: Enlarged EU is a still powerful, but the slowest growing economic region in the world,3., Opportunity: Ten new states give the EU momentum to increase growth,ECONOMIC POWERGDP, USD bn,Comparative indicators 2003,POPULATION m,WEALTH GDP per capita, USD,GROWTH avg. GDP growth 1999-2003, %,10,988,290,3.3,11,028,455,2.3,US,EU 25,ASIA*,* Aggregated data for Japan, China, ASEAN,8,458,1,947,4.8,37,890,24,237,12,058,EU 25 vs. US vs. Asia: Enlarge,B.,Challenges and opportunities of enlargement for EU 15,B.Challenges and opportunities,Eastward enlargement entails threats and opportunities for economies, companies, and governments,EconomiesUnit labor cost advantages in EU 10 challenge existing value creation structures in EU 15, but also offer momentum for structural change / innovation in EU 15CompaniesCompetition in EU 15 as well as in EU 10 is increasing, but also new sales, investment, growth and relocation opportunities for EU 15 companies in Eastern Europe Governments Existing institutional setups in EU 15 are challenged by lower taxes / contributions and higher flexibility in EU 10, but also momentum for political change, Effects of enlargement on macroeconomic and microeconomic levels,Eastward enlargement entails t,Macroeconomic threats: Pressure on EU 15 labor markets and competition for best institutional setup,Low wage-competition / unemployment threatsMigration (up to 3.8 m people from CEE will move to the EU 15)Offshoring (e.g. 830,000 people in CEE employed by German firms in 2004) Low tax / social contributions competitionAlso: Less regulation (e.g. IMD bureaucracy index: Estonia ranked 9th, UK ranked 33rd)Financial burden (EU budget) Cost of enlargement (2004-2006): 49 bn EUR, Differences: Countries with high degree of regulation, geographical proximity to CEE and net contributors to EU budget are more affected,1.1,39,0,19,0,15,0,0,0,17,4,15,0,8,5,12,5,GER,POL,LIT,EST,Taxes,Contributions,CORPORATE TAXES % / SOCIAL CONTRIBUTIONS 2004 % of GDP,Macroeconomic threats: Pressur,Macroeconomic opportunities: Higher growth momen-tum for structural / institutional change and innovation,Enhanced growth in east and westEU 15 benefits from backlog of demand in CEENew momentum in New Europe through increased trade / know-howMomentum for structural change / innovationLabor-intensive / low value creation industries/ products no longer competitive in EU 15Structural change towards high-tech goods and services the only choice for Old Europe (- growth / wealth)Momentum for institutional changeRegulations, taxes, subsidies, flexible markets, EU enlargement helps policymakers bring about necessary but often unpopular structural reforms in their respective countries,1.2,Source: EU Commission,IMPACT OF 2004 ENLARGEMENT ON GDP GROWTH %,Macroeconomic opportunities: H,Microeconomic threats: Increasing competition for EU 15 due to lower labor / unit costs in Eastern Europe, Differences: Mature industries more affected than innovative ones, border regions more than western, small companies more than large,2.1,2.82,1.19,0.56,-0.15,-1.03,-2.26,Chemi-cals,Medicaltechno-logy,IT equip-ment,Auto-motive,Steelindustry,Wood,Industries with comparative ADVANTAGE in GER,Industries with comparative DISADVANTAGE in GER,More attractive business conditions in CEELabor costs only between 10.4% (Slova-kia) and 17.8% (Hungary) of EU 15 levelTaxes lower and social contributions only between 10.0% (Poland) and 16.3% (Czech Republic) of German level Capital costs about 20% lower because of lower investment needs due to flexible labor marketsNeed forIndustry restructuringInnovation (creative destruction),REVEALED COMPARATIVE ADVANTAGEGERMANY VS. EASTERN EUROPE Index,Microeconomic threats: Increas,Microeconomic opportunities: CEE offers new markets and growth / investment / offshoring opportunities, Labor costs in CEE will remain attractive for at least 30 more years,2.2,2001,2010,2020,2030,39.4,66.3,POL,42.4,67.9,EST,61.4,78.5,CZR,71.5,84.1,SLO,100,EU 15,New markets for infrastructure, capital and consumer goods 75 m new consumers with increasing purchasing power for consumer goodsHigh demand for modernized infrastructure and capital goodsNew growth and investment opportunitiesPrivatization of state-owned companiesAcquisition / restructuring of EU 10 enterprisesLow unit costs through offshoringSetup of own production facilitiesOutsourcing of labor-intensive productionLower taxes and social contributions,CONVERGENCE IN PER CAPITA INCOME index, EU 15 = 100,Microeconomic opportunities: C,Result of 2004 enlargement: New European division of labor based on regional comparative advantages,RELATIVEABUNDANCEOF CAPITAL AND TECHNOLOGY,WESTERN EUROPE:Capital/knowledge-intensive economies,EASTERN EUROPE:Labor-intensiveeconomies,RELATIVEABUNDANCEOF LABOR AT LOW COSTS,3., Free exchange of goods and services, financial and human capital will allow EU to compete head to head with the United States and Asia,96.2,109.8,117.2,97.7,121.1,132.6,134.7,74.8,1999,2000,2001,2002,= Imports from CEE,= Exports to CEE,BRAIN,BRAIN,TRADE RELATIONS BETWEEN EU 15 AND CEE EUR bn,Result of 2004 enlargement: Ne,Major industrial sectors are already reaping the benefits of the new European division of labor through FDIs,4.,Leading sectors in terms of FDI in Eastern Europe,= % of all extra-EU 15 flows,1997,1998,1999,2000,2001,2002,6.0,9.8,12.1,19.9,16.3,5.5,4.5,3.9,4.9,12.4,16.1,6.3, Also chemical firms have moved eastwards in search of new markets .,AUTOMOTIVE,FINANCIALSERVICES,FOOD,TELECOMS,26.9% of all German FDI flows go to CEE,EU 15 FDI IN CEE1997-2002 EUR bn,Major industrial sectors are a,C.,Opportunities for EU 15 chemical players in CEE and CIS,C.Opportunities for EU 15 chem,Chemical industry in CEE / CIS: Still small in size but growing at 2.5 times the speed of Western Europe,Chemical output growth2004-2014 % p.a.,Chemical revenues of 34.3 bn USD in Eastern Europe (CEE 23.5 bn USD, CIS 10.8 bn USD) are comparable in size to Ireland or the Netherlands,8.5,7.5,5.3,4.9,4.2,2.2,1.9,1.2,IND,CHN,CEE,CIS,MiddleEast,EU 15,JPN,NAFTA,2.3,5.3,1.6,0.8,3.6,33.0,11.0,27.8,Global share %,1.,Chemical industry in CEE / CIS,1,2,3,4,5,CEE vs. CIS: Basic structural differences in chemicals despite of similarly good growth perspectives,2.,Very different (market entry) strategies necessary for CEE and CIS !,1) Poland, Czech Republic, Romania, Hungary, Slovakia, Bulgaria,2) Russia, Ukraine, Kazakhstan, Uzbekistan, Azerbaijan, Georgia, Moldova,CEE 1),CIS 2),PLAYERS / ACTIVITIES,Local / regional players producing value-added chemicals,Big private oil/gas companies producing mainly petrochemicals and commodities,COMPETI-TIVENESS,Domestically but not yet globally com-petitive production / asset footprint,Uncompetitive production / logistics, but competitive raw materials / feedstock,TRADE,High imports of high-/medium-value chemicals, low level of exports,High petrochemical exports, high consumer chemicals imports,DEGREE OF PRIVATIZATION,State-owned / -controlled companies still dominant,Privatization of Russian players largely completed (Renationalization?),ACTIVITIES OF WESTERN COMPANIES,Greenfield investments and JVs in consumer-driven segments,Demand-driven Greenfield and supply-driven Brownfield investments / JVs,12345CEE vs. CIS: Basic struct,Players / activities: Local players producing value-added chemicals in CEE CIS strong in raw materials,2.1,Local/regional players in CEE and strong resource-driven players in CIS,CEE,CIS,PLAYERS: Weak, big state-owned /-controlled players and some strong private local / regional chemical producersLargest players on various value-chain levels: CIECH, Zaklady Azotowe, Unipetrol, Duslo, Novacke Chemicke Zavody, etc.ACTIVITIES: Value-added chemical production sites in all parts of CEEEthylene: CZ, HU, PL, RO, BG, SLPolyethylene: HU, PL, CZ, HUAmmonium nitrate: PL, SK, BG, RO,PLAYERS: Strong oil / gas companies and weak SMEsLarge oil / gas companies: Yukos, Lukoil, SurgutneftegasSome agrochemical companies: Azot, Akron, PhosAgro, Eurockim, UralkaliiACTIVITIES: Production of low-cost commodities (gas, raw material and energy-based chemicals)Dispersed and dislocated production centers remain from Soviet eraProduction in CIS dropped 60% in early 1990s today more or less at 1990 level againUnfavorable logistics for world markets,Players / activities: Local pl,Competitiveness: CEE assets competitive domestically CIS assets not, but competitive raw materials,2.2,ASSETS: Production sites are competitive (technology, scale) but only on domestic marketsExample (Ammonium nitrate production in Pulawy, Poland):Capacity 700 ktMinimum domestic size550 ktMinimum global size 1,000 ktLABOR PRODUCTIVITY: Uncompetitive vs. EU 15 industry turnover per employee at 30% of EU 15 level in 2003 Significant increases: Up from 19% in 1995,ASSETS: Uncompetitive production sites, but competitive raw materialsExample: Methanol and derivatives (Natural gas at Middle Eastern costsof 60-75 cents / MBTU)Fully fledged combinates and dislocation of process chainsUncompetitive logistics costsLABOR PRODUCTIVITY: Uncompetitive vs. EU 15 industry turnover per employee only at 3% of EU 15 level in 2003 Stagnating or even decreasing: In 1995 CIS productivity level was 4% of EU 15, CEE slowly catches up with EU 15 efficiency unsolved problems in CIS,CEE,CIS,Competitiveness: CEE assets co,Trade: High level of imports in both CEE and CIS CIS with significant exports of mainly commodities,2.3,HIGH IMPORTS: 16.6 bn USDSpecialty / fine chemicals polymers Consumer chemicalsLOW EXPORTS: 5.0 bn USDPolymers PetrochemicalsDOMESTIC PRODUCTION covers 53% of domestic demand of 35.1 bn USD,HIGH IMPORTS: 8.1 bn USDConsumer chemicalsHIGH EXPORTS: 7.0 bn USDAgrochemicals / fertilizersRaw material-based chemicalsGas-based chemicalsDOMESTIC PRODUCTION covers 32% of domestic demand of 11.9 bn USD,Increasing high-value added imports in CEE / CIS in the coming years likely to be followed by import substitution international investments,CEE*,CIS*,*) 2002/2003 data,Trade: High level of imports i,Degree of privatization: Most players in CIS are in private hands today CEE still largely state-owned,2.4,EXTENT OF PRIVATIZATION: Only in Hungary / Slovakia privatization has been completed, in Poland / Czech Republic the state still holds major sharesRECENT DEVELOPMENTSPoland: CIECH group partially privatized in September 2004 (IPO)Czech Republic: Unipetrol sold 63% to PKN but significant restructuring and further ownership changes are expectedOUTLOOK: Privatized CEE players will enhance their impact via M&As in CEE,EXTENT OF PRIVATIZATION: In Russia, more than 96% of the top 400 chemical firms are privatized, in rest of CIS ongoing processRECENT DEVELOPMENTSRussia: Joint ventures with Western companies, e.g. Gazprom with Sibur and Nizhnekamskneftekhim with BASFOngoing activities also in rest of CIS: In the Ukraine a privatization program of large enterprises has just been approvedOUTLOOK: Technology- and know-how-based input of Western companies will increase,Privatization / restructuring is still an issue in Poland and the Czech Republic companies in CIS are more open for partnership / know-