foreign trade in central-eastern europe
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FOREIGN TRADE IN CENTRAL-EASTERN EUROPE. Agenda: UniCredit in CEE CEE’s Foreign Trade Romania’s Foreign Trade CEE Growth Drivers How UniCredit can support trade business in CEE. Speaker: Andrew England Head of Global Transaction Banking, CEE. Bucharest, April 5 th 2011. - PowerPoint PPT PresentationTRANSCRIPT
FOREIGN TRADE IN CENTRAL-EASTERN EUROPE
Speaker:
Andrew England
Head of Global Transaction Banking, CEE
Bucharest, April 5th 2011
Agenda:UniCredit in CEE
CEE’s Foreign Trade
Romania’s Foreign Trade
CEE Growth Drivers
How UniCredit can support trade business in CEE
2
No. 1 No. 1 No. 4 No. 5
No. 7
Estonia2
No. 9 No. 9
Latvia2 Russia
Bulgaria
Serbia
Romania
No. 10
Lithuania2
Croatia
No. 5
Slovakia
No. 5
No. 7
Hungary
No. 4
Czech. Rep.2
Bosnia1
Slovenia
Turkey
Mkt. position by Total Assets
Country
Ukraine
No. 1
No. 5
No 2
Poland
No. 5
Kazakhstan No. 5
CEE region*
~ € 124 bntotal assets1
~ 3,900branches1
~ 72,300employees1
~ 30mcustomers2
~ 128kcorporate clients2
~ 1.800dedicated corporate
relationship managers2
*) data as of 3Q 2010 Source: UniCredit CEE Strategic Analysis
(1) data as of 1H 2010(2) data as of YE 2009
UNICREDIT IN CENTRAL-EASTERN EUROPE
In Top 3
In Top 5
In Top 10
3
Forecast of close to 2 Trillion Euros in 2011 for CEE-17 merchandise foreign trade; after 20% drop in 2009, CEE foreign trade steadily recovering, roughly balanced between imports/exports
*CEE-17: BA, BG, CZ, BALTICS, KZ, HR, HU, PL, RO, RU,RS, SI, SK, UA, TR
SOURCE: UniCredit Group Research
CEE FOREIGN TRADE: MERCHANDISE TRADE VALUE 1999 - 2012
89
1011121314151617
CEE-17 Merchandise Foreign Trade 1999-2012F in BlnEUR
50%51%52%52%51%50%52%53%52%51%51%49%46%46%
50%49%
48%
48%49%
50%48%
47%48%
49%49%51%
54%54%
293394
523638 713
877
15721737
1432
17591968
2115
1080
1325
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Merchandise Imports, BlnEURMerchandise Exports, BlnEUR
As comparison, in 2011, for merchandise trade:
GERMANY 1.9 Trillion EUR TURKEY: 264 Bln Eur (13% of CEE-17)
ITALY: 762 BlnEUR RUSSIA: 517 BlnEUR (26% of CEE-17)
AUSTRIA: 243 BlnEURPOLAND: 276BlnEUR (14% of CEE-17)
4
38,6% 37,9% 37,9% 36,5% 36,4%
28,5% 28,9% 28,9% 29,5% 30,7%
18,5% 18,0% 16,9% 16,1% 16,1%
7,0% 7,5% 8,2% 8,9% 8,1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2005 2006 2007 2008 2009EU-15 Asia North America Middle East South America Africa CEE17
CEE between 7-8% of world trade, with Asia and EU-15 expected to grow significantly
SOURCE: WTO; UniCredit Group CEE/GTB Coordination
CEE17
ASIA
EU15
N.AMERICA
OTHERS
CEE FOREIGN TRADE: SHARE IN WORLD TRADE 2005 - 2009
5
Fairly stable industry structure, with manufacturing close to half, confirms CEE’s growing role as a manufacturing region
CEE FOREIGN TRADE: INDUSTRY STRUCTURE 2005 – 2015F
CEE-17*: Top 5 Industry Sectors 2005-2015E by share in Foreign Trade
46% 46% 46% 46% 47% 47% 47% 47% 47% 47% 47%
8% 8% 8% 8% 7% 7% 7% 8% 8% 8% 8%7% 6% 6% 7% 5% 6% 6% 7% 7% 7% 7%5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5%5% 5% 6% 6% 6% 6% 6% 6% 6% 6% 6%
29% 29% 29% 29% 29% 28% 28% 28% 27% 27% 27%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Other
Motor Vehicles
Chemicals
Mining
Basic Metals
Manufacturing
*CEE-17: BA, BG, CZ, BALTICS, KZ, HR, HU, PL, RO, RU,RS, SI, SK, UA, TR
SOURCE: UniCredit Group CEE/GTB Coordination
6
CEE-9*: TOP-10 TRADE PARTNERS 2010
*CEE-9: BG, CZ, HR, HU, PL, RO, RU, SK, TR
SOURCE: UniCredit Group CEE/GTB Coordination
Total “merchandise” trade of CEE-9 countries in 2010 was roughly 1.5 Trillion EUR, of which close to half (~47%) was made with the top-10 partners; Germany is by far the largest destination and source for both export/import.
CEE-9: TOP 10 EXPORT DESTINATIONS (BlnEUR, %, EOY 2010)
17 16 14183538
23 18
126
14
23.5%
7.0% 6.5%4.3% 3.4% 3.4% 3.1% 3.1% 2.6% 2.5%
0
20
40
60
80
100
120
140
DE IT FR UK CN PL SK RU AT CZ
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
CEE-9: TOP 10 IMPORT SOURCES (BlnEUR,%, EOY 2010)
16 14
117
414861 54
23 1420
18%
10%8% 8%
6%
4% 3% 3% 2% 2%
0
20
40
60
80
100
120
140
DE CN RU IT NL PL US FR KR TR
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
7
Bosnia
Russia
UkraineTurkey
SloveniaSlovakia
Romania
Poland
LT
LVKazakhstan
Hungary
EE
Czech Republic
CroatiaBulgaria
0%
5%
10%
15%
20%
25%
30%
35%
0% 5% 10% 15% 20%
Italian export shares (%)
Ge
rma
n e
xp
ort
sh
are
s (
%)
South Eastern Europe
Central Europe
Germany and Italy remain the main trading partners of CEE
CEE FOREIGN TRADE: GERMANY AND ITALY AS DRIVERS
SOURCE: WTO; UniCredit Group Research
TO
GE
RM
AN
Y
to ITALY
8
ROMANIA: FOREIGN TRADE VALUE 1999 – 2012FROMANIA’s merchandise foreign trade followed the same trend as the rest of CEE; largest growing markets are Turkey for exports (+69% yoy 2010) and Russia for imports (+40% yoy 2010)
SOURCE: UniCredit Group CEE/GTB Coordination
ROMANIA Merchandise Foreign Trade 1999-2012F in BlnEUR
46%46%46%45%39%38%41%43%44%44%46%44%46%47%
54%54%
54%
55%
61%62%
59%57%
56%56%54%56%54%
53%
1724
29 32 3543
7785
65
79
91
105
52
63
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Merchandise Imports, BlnEURMerchandise Exports, BlnEUR
9
ROMANIA: TOP-10 TRADE PARTNERS 2010
SOURCE: INSSE, UniCredit Group CEE/GTB Coordination
ROMANIA: TOP 10 EXPORT DESTINATIONS ( BlnEUR, %, EOY 2010)
1.0 0.8 0.7 0.7
4.9
1.31.8
3.7
2.3
1.0
18%
14%
8%7%
5% 4% 4% 3% 3% 3%
0
1
2
3
4
5
6
DE IT FR TR HU UK BG ES PL NL
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
ROMANIA: TOP 10 IMPORT SOURCES ( BlnEUR, %, EOY 2010)
1.31.41.21.5
2.9
3.9
2.0 1.9
5.7
1.2
17%
12%
8%
6% 6% 5% 4% 4% 4% 3%
0
1
2
3
4
5
6
DE IT HU FR CN RU AT PL TR NL
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Total “merchandise” trade of ROMANIA in 2010 was roughly 80 BlnEUR, of which ~68% was made with the top-10 partners; Germany is here too the largest destination and source for both export/import
10
ROMANIA: FOREIGN TRADE STRUCTURE 2010Machinery continued to drive ROMANIA’s foreign trade; transport and textiles lead the export, while chemicals registered the highest %-age deficit.
27%
15%12% 12%
10% 10% 8%5%
29%
7%9%
11%8%
17%
8%11%
0%
5%
10%
15%
20%
25%
30%
Machinery Transport Textiles Metallurgical Other Chemicals Agro-food Mineral prod.
EXPORTS FOB 2010 IMPORTS FOB 2010
SOURCE: INSSE, UniCredit Group CEE/GTB Coordination
11
FOREIGN TRADE CAGR '99-'09
8%
9%
9%
10%
10%
10%
12%
12%
12%
13%
13%
14%
14%
14%
14%
16%
17%
21%
0%5%10%15%20%25%
HR
EE
SI
BA
HU
TR
LV
UA
PL
CZ
CEE17
BG
LT
RS
RU
SK
RO
KZ
Before the crisis, although a relative middle place in overall regional trade (8 th), Romania had the 2nd fastest growth in the CEE, with an annual average of 17% versus 13% for the region
SOURCE: UniCredit Group CEE/GTB Coordination
CEE-17: BA, BG, CZ, BALTICS, KZ, HR, HU, PL, RO, RU,RS, SI, SK, UA, TR
SHARE IN TOTAL REGION FOREIGN TRADE '99-'09
1%
1%
1%
1%
2%
2%
2%
3%
3%
4%
5%
5%
9%
10%
13%
13%
25%
0% 5% 10% 15% 20% 25% 30%
BA
RS
LV
EE
LT
BG
HR
SI
KZ
RO
SK
UA
HU
CZ
TR
PL
RU
ROMANIA: SHARE IN CEE TRADE 1999 - 2009
12
ROMANIA
2009 2010E
GDP (growth, YoY) -7.1% -1.3%
Private Consumption (growth, YoY)
-9.2% -1.0%
Export as % of GDP 23% 23%
TURKEY: internal demand
2009 2010E
GDP (growth, YoY) -4.7 +8.2%
Private Consumption (growth, YoY)
-2.2 +7.1%
Export as % of GDP 18% 20%
POLAND: internal & trade
2009 2010E
GDP (growth, YoY) +1.7% +3.8%
Private Consumption (growth, YoY)
+2.1% +3.1%
Export as % of GDP 33% 35%
SLOVAKIA: trade
2009 2010E
GDP (growth, YoY) -4.8% +4%
Private Consumption (growth, YoY)
+0.2% +0.3%
Export as % of GDP 70% 74%
CEE GROWTH: TRADE AND PRIVATE CONSUMPTION AS DRIVERS
EXPORT % in GDP
PR
IVA
TE
CO
NS
UM
PT
ION
SOURCE: UniCredit Group CEE/GTB Coordination
Export intensity and private consumption were key in driving growth across the CEE.
13
HOW CAN UNICREDIT SUPPORT GROWTH? BY ENABLING FLOWS
*SWIFT statistics Feb-2011
**MENA: Middle-East Nord-Africa
*** Sep. 2010
►STRONG TRANSACTION BANK FRANCHISE IN CEE: 12%ms* in documentary credit
Top 5 bank in main CEE export countries (Czech Republic, Slovakia, Hungary, Turkey)
Number 2 in Poland after state-owned no.1
More than 2000 transactions specialists and 4.000+ corresponding banks
Experience of over 400.000 corporate customers worldwide
►INTERMEDIARY FOR MENA** FLOWS TO CEE: 13%ms*** in documentary credit
Turkey as a spear-head for region's operations
Expertise and strong relationship with main exporters/importers
►EBRD CREDITS TO SMEs IN CEE
Over 430 MEUR to boost flows to real economy in 7 CEE countries ****
**** BG, HR, RS, BA, UA, KZ, KG
14
HOW CAN UNICREDIT SUPPORT GROWTH? BY DEVELOPING SOLUTIONS TO ADVANCE TRADE
►SCF – SUPPLY CHAIN FINANCING PLATFORM
Buyer centric financing model (post shipment phase of the trade finance cycle)
Innovative approach for working capital financing without classical loan granting process
Involves sell of receivables by the supplier, which in turn has the chance to obtain financing at favorable conditions thanks to the generally better rating of the Buyer
►SPE – SINGLE POINT OF ENTRY FOR L/Gs AND L/Cs
Single entry point to send Letters of Credit (UC SEP L/C) and requests to issue guarantees (UC SEP L/G)
Beneficiaries domiciled in Europe (all countries where UniCredit is present – CEE plus Austria, Germany and Italy).
►Renminbi (RMB) Settlement Program for trade with China
Improved Supplier Relationship: ssimple & faster tax rebates processes for Chinese suppliers and reduced costs in the supply chain
Pricing Transparency: increase transparency as pricing of goods without FX risks and costs mark-up
Widening Supplier Base: access to foreign currency in China is limited, RMB settlement can be used to access a wider supplier base and to optimize payment terms
15
KEY DETERMINANTS IN GROWING TRADE
►Market proximity relevant for expanding trade;
►Close relationship with bank and operating partner to access new markets;
►Strong local support to invest in value chain linked to manufacturing output;
►Relevant governmental support to manage medium term trade investments
(ECAs);
►Tools to manage liquidity, counterparty and country risk;
►Ability to monetize trade receivables.