B A L T I C S E A R E G I O N

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1 NOVEMBER 2004 B A L T I C S E A R E G I O N BCCA, the Baltic Sea Chamber of Commerce Association, is an organization whose purpose is to enhance the business life in all of the 10 member states of the region. BCCA held its annual meeting here in Turku last June. The enlargement of the EU was widely discussed as well as the economical benefits it will have for Europe. The Baltic Sea Region will be one of the strongest growing regions in the EU, if not the strongest. This is not to say that EU will succeed in reaching its goal to be the number one economic region in the world by EU will face severe difficulties with the aging of its inhabitants, stiffness of its administration and, most important, with its slow growth in general. For the Baltic Sea Region, Russia is and will remain a question mark for a long time remaining. Oil has improved Russia s economy a lot and will do so as the prize of raw oil still keeps increasing. On the other hand, political life in Russia has always been calm when oil price is constant, while turbulence has been seen at other times. Poland will be one of the winners of the enlargement. Being the neighbour of Germany, it will be a very lucrative country to invest in, due to the relatively cheap labour force located next to a very large market in Germany. Jari Lähteenmäki President of WTC Turku CEO of Turku Chamber of Commerce NEW CLUB MEMBERS Asianajotoimisto Astrea Oy Idea Mode Oy Jokikellari Oy Kirjanpitotoimisto Taina Niemelä Oy Langh Ship Oy Mediradix MCC Action Oy Roschier Holmberg Asianajotoimisto Oy Turun Seudun Puhdistamo Oy

2 FINNISH-HUNGARIAN ECONOMIC RELATIONS KEEP GROWING Hungary has been a member of the EU since the 1st of May, It is generally known that Hungary was the absolute front-runner among Central and East European countries in many important aspects for example, in foreign direct investment, liberalisation and privatisation, states András Csorba, Counsellor, the Embassy of Hungary in Finland. Due to an advantageous investment climate, Hungary is a priority target for foreign investors and the government continues to improve the pleasant environment by reducing the tax rate. Nothing proves it better than the vast majority of established companies which plan to stay long term and reinvest a high share of their profit in Hungary. In 2003, Hungarian GDP grew 2.9 % more rapidly than the average of the EU15. For the time being, Hungary s long-term economic prospects look much better than in any period during the past three years. Hungarian-Finnish economic relations have developed very successfully in recent years, and in 2003 bilateral foreign trade turnover increased by 25%. Finnish investors and their Hungarian-based companies have produced a high share of the turnover. It sends a very positive message to the business community that Nokia decided to double its production capacity in Hungary at the beginning of 2004, András Csorba says. Professor Urpo Kivikari from the School of Economics and Business Administration points out that transformation to an EU member state has been more gradual than shocking in Hungary. HUNGARY AT THE THRESHOLD OF THE EU Due to the long reform process that followed the unsuccessful revolt in 1956, Hungary got a good start for its transition during the 1990s. Though transformation in Hungary has been rather gradual instead of shocking, it s been solid experience for both firms and citizens, Emeritus Professor Urpo Kivikari from the Turku School of Economics and Business Administration states. During the last few years, economic growth has stabilised within the range of 3 5%. Foreign investors have trusted the Hungarian transformation. By the mid 1990s, Hungary had got half of all FDI in the former Socialist countries. Fortyfive of the world s biggest multinational companies now have operations in Hungary, Germany being the largest investor. Hungary s economy voted yes for the EU integration long before the referendum about membership in % of Hungarian exports are destined for the EU market and only three other member countries have such a strong bond with the EU. Among the new member countries, Hungary is Finland s most important partner after Estonia and Poland. Hungary s highly international economy is expected to benefit from EU membership more in purely economic terms than as a net receiver of EU income transfers, Professor Kivikari declares. WTC Turku hosted the Hungarian Economic Day seminar and Business Matchmaking event, which was attended by many companies from Hungary and the Turku region.

3 Members Corner HANS LANGH S INNOVATIONS BECAME WORLDWIDE SUCCESS On the 14 th of September 2004 Oy Langh Ship Ab has been granted a demanding patent by the United States Patent Office for its integrated tweendeck cradles for the transport of steel coils. Earlier the company has received patents for the innovation in Europe, Taiwan and South-Africa and patents are pending eg. in Japan, China and South Korea. The tweendecks facilitate loading, shipment and unloading in port. Their use can also optimise vessel stability and reduce dramatically cargo damage and fuel consumption and, last but not least, at The Seatrade Award s certificate was handed over to Langh Ship s Managing Director Hans Langh by The Rt. Hon. Alistair Darling (right), UK Secretary of State for Transport. the same time improve the working conditions of the crew, says Mr. Hans Langh, Managing Director of the company. Besides the cradle tweendecks, Hans Langh has, together with the personnel, developed and patented specialised containers and plate transportation cassettes. These new intermodal units speed up the handling of steel products and reduce cargo damage. The patented special-purpose containers and unique transport solutions are eminently suitable for intermodal shipments, and perhaps this is precisely why the international attention received by Langh Ship Cargo Solutions has increased, states Mr. Langh. In 2003, Langh Ship has received Seatrade Award s certificate in the category Innovation in Ship Operations in London. At national level, the innovation has received a regional honourable mention in the Productive Idea by the Junior Chamber of Finland and the first prize in the InnoFinland competition for Southwest Finland. TS GROUP 100 YEARS One hundred years ago, on November 1, 1904, the first issues of Turun Sanomat were printed in the Edgren building at 3 Aurakatu Street, in the central business district of Turku. The paper was not yet intended at the time for a large audience, it began to appear more widely at the outset of the next year, continuing its determined growth as a conglomerate enterprise. Today, the TS Group is a diversified, rapidly developing international corporate entity, the turnover of which is 280 million euros and with 2,080 people in its employ, states Mr Keijo Ketonen, Managing Director of the Group. Hansaprint, the printing service group, is Finland s largest printing house, which has subsidiaries and partners in all the Nordic countries as well as in Russia and the Baltic. Hansaprint s success rests in its complete whole of over 900 graphics field professionals, which is concentrated on the development of graphic communications-related total solutions together with their supporting information systems and continuous We have sought areas of continuous, deeper expertise: clients must be given a comprehensive line of services including special applications; affirms Keijo Ketonen, Managing Director, of the Group. product development. Hansaprint and Elanders AB of Sweden have registered a joint venture situated in Hungary, whose purpose is to survey the possibilities for the provision of fourcolour digital printing and logistics services to industrial companies on the Hungarian market. In addition to the graphics field, the area of operations for the corporation also comprises electronic communications, cable TV, video and TV programme production and radio. Turun Sanomat Multimedia Convergence has been a pioneer in the worldwide newspaper business, which has sparked keen interest in various fields at newspaper congresses around the world. Turun Sanomat currently consists of a regional newspaper with 300,000 readers, local cable TV which is also digitalized, radio stations, an on-line newspaper and vigorous cooperation with other Finnish and international media. Altogether, the Turun Sanomat Multimedia cluster reaches over 2 million potential customers daily.

4 FINLAND S ECONOMY NEEDS A NEW GROWTH ENGINE Managing Director of Etlatieto Oy Pekka Ylä-Anttila brought hot issues of the day on the table What does it take to adjust to creeping yet unexpectedly fast environmental change? What is worth investing in now? Pekka Ylä-Anttila, Research Manager of the Research Institute of the Finnish Economy (ETLA), spoke about these issues at the National Globalisation Strategy Seminar organised by World Trade Center Turku at Sokos Hotel Hamburger Börs. The Finnish economy has seen the quickest growth in its history in the electronics industry, which has produced a whole new field of business over the course of the last century. However, Pekka Ylä-Anttila suggests that as the work is slowly moving abroad, the years of intense growth in the electronics industry are over and we are now left with the challenge of finding another way to boost our economy. The transfer of jobs from Finland into cheaper labour nations, for example, China and Estonia, is still relatively small, and these countries are only in ninth and tenth place when measured against the investment in personnel in foreign countries. It is more worrisome, however, that there has been an increase of 315 percent in personnel investment in China during the past five years alone. The top three targets for investment of Finnish companies as measured by the investment of personnel are Sweden, the United States and Germany, whereas China is only in tenth place. We are slowly being taken back to the world as it was for one hundred years, beginning from the mid- 18 th century when China s share of the world s GNP was one-third. Finland now needs to seek foreign investors: all the requirements are fulfilled and the interest rates are low, stated Pekka Ylä-Anttila. From left: Jouni Mäkitalo from Suomen Posti, Markku Horte from Horte Consulting, Lauri Palmunen from Regional Council of Southwest Finland and partly, Guy Lindström from Matti-Ovi.

5 CHINA PHENOMENON OFFERS A CHANCE It is often claimed when discussing the China phenomenon that positions and workplaces are permanently lost to China from Finland. Nowadays, the leading American economists have come to the conclusion that although some working places are lost here, even more workplaces are born in the domestic market by the growth of the company. This development is a consequence of the dynamic interaction between global production networks and production chains and how they are linked together. The Amomatic Oy has delivered 8 asphalt plants to China since 1996 and some are under construction, says Topi Saarenhovi, Managing Director of the company. Director Ilpo Kaislaniemi from Finpro ry told that Finpro has 4 offices in China; in Peking, Shanghai, Guangzhous and Hong Kong. China phenomenon has become another code name for a new challenge: how to keep up the competitiveness in these new market situations caused by vast globalization. Government opened the country for international business in Finnish companies started business in China in the middle of the 1980s. By 2003 there were about 200 Finnish companies there, and the volume of trading was 7 billion dollars with employees totalling about The investments of Finnish companies in China have increased to 4 billion dollars. Most of the Finnish companies operating in China have representative offices in the country. The number of production plants there is about 50. Ilpo Kaislaniemi from Finpro asserted that the growth of gross domestic product (GNP) secures political stability, and likewise when the country is politically stable, people are willing to consume, the economic market also shares faith in the future, and companies are willing to invest in China. The savings rate has historically been high in the country about 40 % and this has made it possible to develop and build up a domestic infrastructure as well as, e.g., road networks. Problems may occur due to the lack of electricity and insufficiency of electrical energy generation. The cities already have strict limitations on air pollution. To increase the production of electricity, China has made plans to build modern nuclear power plants, Kaislaniemi stated. Trade Commissioner Esa Rantanen from Finpro Peking emphasized the fact that China has made a huge improvement in GNP, which today is 152 times more than in year The private sector builds up 60 % of the GNP, employing 40 % of the workers. The middle class and growing upper class in China are offering an enormous market for leisure equipment, luxury products, yachts, etc. The construction business is prospering. Interior construction markets are expanding powerfully. Western brands and labels are highly appreciated, which opens markets for high-quality Finnish products. Ski resorts have doubled their net sales and value of trading every last four years. Another great market opportunity lies in building and interior construction. Our high-quality production and craftsmanship could find a market share in these complex markets, where western products should be marketed in a conservative Chinese way. Kari Komulainen from Tekes shed light on some aspects and visions of the new functions in industrial activity. Chinese brands are intruding in markets all over the western world and many of them are being produced in, for instance, the USA. The image of low-quality products has started to recede from China. Topi Saarenhovi, Managing Director of Amomatic Co., shared his experiences in expanding to China. Case II was presented by Jarmo Karttunen, Export Manager at Palin Granit Co. Because of the structural investments in building business, Finnish granite is a very competitive material in front facades. The Olympic Games in Beijing 2008 will create a demand for hotel premises, and at the moment over 200 quality hotels are being built. Palin Granit delivers tons of Finnish stone to these hotels and other construction sites. The large variety of colours together with the large granular size in the stone make Finnish Granite highly appreciated. Case III was presented by Markku Horte, Managing Director of Horte Consulting. He also emphasised the significance of a local business partner and knowledge of the Chinese business culture. China is not one big country. It s a combination of various regions and several languages. Good knowledge of local manners is vital to successful business operation, states Horte.

6 TURKU FOREIGN TRADE GUILD, Awardee of WTC Association s Book of Honor The Turku Foreign Trade Guild, chaired by Mr. Pekka Hemmi, was established in 1976 as the Turku Exporters Guild. The membership grew to include individuals from a broader range of international business specialties providing opportunities to administrative workers, secretaries, freight forwarders and others to understand the importance of foreign trade and its influence on world peace. The three founding members of the Guild, Mr. Bo Blomberg, Mr. Seppo Iloniemi and Mr. Iiro Kaisti, were true visionaries of their time, and their original concepts remain important parts of the Guild s mission, including foreign trade expansion, life- The Awardee was received by Mr. Hemmi together with Commercial Counselor Mr. Seppo Heikelä (left) and Mrs. Kaija Honka, both long term activists and trendsetters in the guild. long learning, cooperation, networking and mentoring. The enthusiastic and active input of the founders has been essential to the success and continuity of the Guild, states the Book of Honor. WTCA Online visitor traffic continues to grow WTCA Online, with over 52,000 registered users, continues to have great usage worldwide. We tracked last month s usage to measure the effect of the new Web site navigation on our membership after our changeover to the new portal format in July. For the period August 11, 2004 through September 13, 2004 WTCA Online received a total of 66,404 visits with 1, 473,709 pages viewed. Thus, we are averaging over 2,000 visits per day with over 79,000 pages viewed. Our visitors for the month came from a total of 160 countries International Association of Science Parks (IASP) has much relevance for WTCs The 21 st convention of the IASP was held in Bergamo, Italy, September There seems to be a clear similarity between scientific parks (often described as high tech or business parks) and WTCs. Both are engaged in promoting the economic development and competitiveness of the communities they serve, and both are scattered worldwide. IASP has 274 member scientific parks in 62 countries. Some WTCs, such as WTC Sophie Antipolis, are based in high tech and scientific parks. These WTCs provide their client companies with specialized services, primarily focused on the needs of this unique business community. They also offer them the possibility of branching out to global markets and new international partnerships. At the IASP convention was debated the additional appeal of areas equipped with scientific parks in the era of global knowledge, and examined how specialized services can create efficiencies. Both the IASP top managers and those of the WTCA Committee on Services for Trade Fairs, Trade Marts and High Tech Parks found considerable interest in exploring cooperation possibilities. It was proposed a continuing dialogue to find ways for the two organizations to work together to better serve their respective constituencies. The next IASP convention will be held in WTC Beijing, September 18-21, th Hi-Tec Qatar Exhibition and Conference organized by WTC Doha-Qatar The event will be held April 24-27, Participants will include experts, scientists, investors, researchers, manufacturers and suppliers around the world interested in exchanging technologies and ideas. Further information WTCA Spring Meeting in World Trade Center Mumbai; India April 3-6, Further information: MIPIM International Property Market will be held in Cannes, France March 8-11, This will be the 14 th year in which the WTCA Facilities Committee will organize a stand for real estate professionals, for those seeking developers, consultants, financing or tenants. This is an event where you can make valuable contacts: over representatives of the property industry from 65 nations were present at MIPIM last year. MIPIM offers many opportunities to organize press conferences, receptions and seminars as well as to advertise in their show publications. Further information

7 SWEDEN: A TARGET FOR FOREIGN INVESTMENT Mikko Ketonen, Consul of Sweden and Chairman of TS Group, invited World Trade Center members and business partners cooperating with Sweden to hear Hannu Thorén, Invest in Sweden Agency s Sweden s Ambassador to Finland, Ulf Hjertonsson, opened the Invest in Sweden event at World Trade Center Turku. representative, deliver a lecture on the country as a target for foreign investors. Sweden remains of interest to foreign investors and receives more direct foreign investments than it itself invested abroad during the past year, he said. The director confirms, however, that Sweden has not managed to escape the enticement of cheaper labour, thereby also losing work to countries abroad. In 2002, Sweden received foreign investments worth over 11 billion dollars when Finland only received about nine billion though ahead of Sweden by many international measurements. Thorén believes that Sweden enjoys better success due to the nation s longer involvement in international trade as well as through its active sales work, in addition to its substantial financial investment in marketing. Sweden has thereby managed to market itself as a centre for trade to the Baltic countries and Russia. Finland has tried the same, Director Mikko Ketonen Hon. Consul of Sweden, reminds that Sweden is Finland s natural, close and reliable business partner. but has not achieved the same success, a fact which may reflect Finnish distrust towards foreign businesses. SPARKNET THE WIRELESS NET AT WTC TURKU Jaakko Kuosmanen, ICT Turku Oy s Managing Director, presented the performance achieved by Spark- Net at World Trade Center Turku on 24 May The WTC premises boast several SparkNet access points in municipal use as well as that of the University of Turku and Pilot Oy. All access points are used jointly, which made the presentation of SparkNet highly effective and inexpensive. SparkNet enables work anytime anywhere, with the same benefits you d have in your own office. SparkNet is your office online. Jaakko Kuosmanen demonstrated the functionality of SparkNet by showing GoodMood webcastings-based net use in addition to the Sanakon Forum 100 virtual cooperation programme. Moreover, a phone call of impeccable quality was made to St. Petersburg, using only the Internet and a laptop. SparkNet has quickly become the largest public WLAN net. Through Spark- Net, users receive fast, fixed price Internet connections on a wireless basis. SparkNet s got up to 300 access points at the moment, and the amount is estimated to increase to about 500 this year. SparkNet is now available in many Southwest Finnish communities and in the Helsinki region as well, not to mention Utsjoki and Rauma. Regardless of the access point that I m using, my Internet connection will run through the service supplier of my choice, MP-MasterPlanet. This enables the use of the Internet for me at the University of Turku, for instance, without the need for any direct access to the university s Internet connections, Jaakko Kuosmanen declared.

8 WORLD TRADE CENTER TURKU licence by Turku Chamber of Commerce The World Trade Centers Ass. (WTCA) is a worldwide organization, with headquarters in New York, formed for the purpose of supporting and developing international trade. The WTCA achieves its mission by offering a great variety of services that help companies engage in international trade and investment. Today the WTCA-family consists of companies in 95 countries around the globe. SERVICES FOR MEMBERS, COMMUNITIES AND CLIENTS AWARD OF EXCELLENCE The WTC TURKU offers its unique member services that are universal and can be used at all operating WTCs around the world. In order to assure the best possible level of services the WTC TURKU started the huge, one year long Self-Assesment -progress which lead to receipt of the WTCAs Quality Certification Award with excellent results. The WTC TURKU offers business support services, ranging from temporary office space to online data access. The valueadded services which generate the most economic growth include: PUBLISHER: EDITOR-IN-CHIEF SUB-EDITOR: World Trade Center Turku Veistämönaukio 1-3, FIN Turku, FINLAND Tel: wtctk@wtc-turku.fi HANDLING REQUESTS FOR COOPERATION from abroad and the other way round. Hundreds of companies have used our expertise in finding suitable business partners. TRADE MISSIONS hosting incoming and organizing outgoing missions to explore new markets. TRADE STRATEGIES AND MARKET POSITIONING by providing community leadership and trade strategies for the promotion of trade in Turku and Southwest Finland. TRADE INFORMATION & MARKET RESEARCH WTC TURKU provides current information on products and services; customized trade research TRADE EDUCATION SERVICES WTC TURKU offers international trade courses, seminars, luncheons and other club events. MAKE USE OF OUR GLOBAL AND LOCAL CONNECTIONS! WORLD TRADE CENTER TURKU Mirja Kärkäs-Lainio Tel: , Fax: wtctk@wtc-turku.fi Mirja Kärkäs-Lainio World Trade Center Turku Anne-Marie Ojala Eija Kunnas World Trade Center Turku