fdi attraction: the italian policy
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FDI ATTRACTION: THE ITALIAN
POLICYRICCARDO MONTI
President Italian Trade Agency
MEETING INVEST IN LOMBARDY
MILAN, OCTOBER 14th, 2015
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2
Exportof goods(bln €)
Italy
% change y-o-y
Germany
France
1,093.2 1,134.8
428.5 442.6 437.4
CAGR2011-14
+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
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Machinery and ElectronicsChemical and
PharmaceuticalFashion
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
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4Source: elaborations by MISE on Istat data
Destination areas
(1st half 2015)
Export trends
(1st half 2015)
ITALIAN EXPORT: DESTINATION AREAS AND TRENDS
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5Source: elaboration by MiSE on WTO data – 2015 forecast by Prometeia
G-20 countries
Balance
in manufactured
goods
Italy
Bln €698
294
164
112 9637 31
-28 -30 -31-59 -61 -82
-117-474
Ch
ina
Ge
rma
ny
So
uth
Ko
rea
Ja
pa
n
Italy
India
Ru
ssia
Bra
zil
Me
xic
o
Fra
nce
Tu
rke
y
Canada
Au
str
alia
UK
US
A
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
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6Source: 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
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• 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)
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HUGE POTENTIAL TO INCREASE INTERNATIONALIZATION
OF ITALIAN SMES
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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
Equity Interest rate
support to
exporting firms
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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
To
tal
ex
po
rt g
row
th b
etw
ee
n 2
01
2 a
nd
20
14
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
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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)
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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
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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%
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• 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
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Inventory of public assets
Ministry of Economy and Finance
Department of the Treasury
Survey of public realestate 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
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Total Not interesting forforeign investors
Italian companiesnot open to new
investors
Eligible for directinvestment
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
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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
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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
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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
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• 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 EstateInvestment 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
-IN
VE
ST
ME
NT
SD
IRE
CT
IN
VE
ST
ME
NT
S
OUR SUPPORT TO FDI
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