WEEKLY INTELLIGENCE REPORT
BY MIDA CHICAGO
(27 JUN – 1 JULY 2005)
Economic Intelligence Report for the week June 27 - July 1, 2005
1. International Investments by US Corporations based in the
states of the USA under the coverage of MIDA Chicago
; GKN Opens New UK Facility
Missouri-based GKN Aerospace has opened a new advanced composites facility on the Isle of Wight, England that focuses on
the science and technology of composite aircraft structures and
their production processes.
GKN Aerospace North America, which supplies structures, components, assemblies and engineering services to aircraft and aero engine manufacturers, has operations in Hazelwood, Missouri.
One of the first projects at the new facility will be to create wing
spars for the Airbus A400M military transport aircraft. The research that will be conducted at the new facility will not only focus on aircraft structures, but also on composites in aircraft engines and a program with Rolls Royce.
GKN Aerospace is the aerospace operation of GKN plc. It is a global independent first tier supplier of structures, components, assemblies and engineering services to aircraft and aero engine manufacturers.
; Hexion to Build New Chemical Plant in Canada
Ohio-based Hexion Specialty Chemicals has announced plans to construct a plant in Alberta, Canada, that will produce resin-coated
proppants for use by the Canadian oil and gas production industry.
The plant will be built in Sturgeon County, Alberta and will produce
resin coated sand proppants for hydraulic fracturing, a process used by oil and gas producers to help increase the yield and
working life of wells. Hexion is a leading supplier of resin and proppant systems to this industry.
Based in Columbus, Ohio, Hexion Specialty Chemicals combines the former Borden Chemical, Bakelite, Resolution Performance Products and Resolution Specialty Materials into the global leader in thermoset resins. With 86 manufacturing and distribution facilities in 18 countries, Hexion serves the international wood and industrial markets through a broad range of thermoset technologies, specialty products and technical support for customers in a diverse range of applications and industries.
; Wal-Mart Aims for Expansion across Europe
Arkansas-based Wal-Mart Stores Inc, the world’s largest retailer, has announced its intention to expand in central and eastern Europe namely Russia, Poland and Hungary.
Wal-Mart aims to continue achieving 30 per cent of its sales growth
outside the United States.
Arkansas-based Wal-Mart Stores Inc operates more than 3,500
discount stores, Supercenters and Neighborhood Markets, and
more than 535 SAM'S CLUBS in the United States. Since becoming an international company in 1991, Wal-Mart has opened more than
1,200 units in nine countries. The division currently operates stores and clubs employing more than 303,000 associates in Argentina, Brazil, Canada, China, Germany, Japan, Korea, Mexico, Puerto Rico and the United Kingdom.
; PolyOne Launches New Plant in China
Ohio-based plastics firm PolyOne has established a new plant in Shenzhen, southern China, to manufacture a range of products at a single location.
The new facility has a capacity of 10,000 tpa; products will include color and additives, engineered materials and polymer coatings. At
a later stage, PVC compounds may be added.
In addition, a new advanced technical centre for Asia will be located at Shenzhen, specializing in the development of new
products to meet specific local demands.
PolyOne is the world's largest polymer services company, providing customers with a single source for polymer, colorant, and additive products. PolyOne also offers a complete range of support and technical services.
; Protomold Opens UK Facility
The Protomold Company Inc, a rapid injection molding company
based in Minnesota, is expanding its North American manufacturing operations by 50 per cent and opening a new facility in the United Kingdom to serve the European market by the end of 2005.
In the UK, Protomold will provide sales, customer service and manufacturing and will employ approximately 40 staff by the end of 2006. Initially the UK operation will focus on the prototyping and low-volume production needs of design engineers in the UK and
Germany, with an expansion into other western European countries to follow.
The Protomold Company Inc is privately-held and headquartered in
Maple Plain, Minnesota.
; RTP to Establish Plant in China
Minnesota-based RTP Company, a specialty thermoplastic
compounds producer, has announced plans to open a
manufacturing plant in Suzhou, China.
RTP will open the site at Suzhou Industrial Park in the fourth quarter of 2005. The plant will produce goods for the electronics,
automotive and consumer goods markets.
RTP Company, headquartered in Winona, Minnesota, is a global leader in specialty compounding. The company has six manufacturing plants on three continents plus sales representatives throughout North America, Europe, and Asia/Pacific. RTP Company's engineers develop customized
thermoplastic compounds in over 60 different engineering resin systems for applications requiring color, conductive, flame
retardant, high temperature, shielding, structural, and wear resistant properties.
; GM Expands Operations in Europe
Michigan-based automotive giant General Motors plans to open a new European Design Centre in Russelsheim, Germany in January 2006 as part of its continued focus on further strengthening product development. The new facility will be housed in the centre
of the company's Russelsheim campus.
The new design centre will house GM Europe’s advanced and production design, providing a direct link between advanced engineering, product planning and the brands.
General Motors’ global design organization is a multi-national team
with 11 design centers around the world. The offices are linked via virtual reality studios and projects are shared around the globe.
GM Europe will also establish a global Saab Brand Centre in Sweden. This will be the centre of the Saab brand and will house a strategic design team that will concentrate on Saab-specific
In addition to designers, the centre will house a core team of engineers and marketers, who will work in close collaboration to develop, evolve and maintain the Saab brand character in all areas – from developing future product proposals to ensuring consistent communication across the globe.
General Motors Corporation designs, manufactures and markets automobiles, trucks and related parts, designs and manufactures
locomotives and heavy-duty transmissions, and operates a
financial services and insurance company. The company is based in Detroit, Michigan, USA and employs 338,000 people.
; BIO 2005 Annual International Convention
a) The BIO 2005 Annual International Convention – the world’s
largest biotechnology gathering, held this year in Philadelphia
- has set new records for attendance and international
representation. Total registration was 18,730, with
representatives from 56 countries and all 50 US states. More
than 500 journalists from 36 countries covered BIO 2005.
The exhibit hall featured a record 1,525 displays, with more
than 60 state and international pavilions.
Chicago is the site for BIO 2006, to be followed by Boston
(2007), San Diego (2008), and Atlanta (2009).
BIO represents more than 1,100 biotechnology companies,
academic institutions, state biotechnology centers and
related organizations in all 50 US states and 31 other nations.
BIO members are involved in the research and development
of health-care, agricultural, industrial and environmental
b) BIO 2005 was also used as a launch pad by a number of
state and international economic development agencies to
launch new initiatives to spotlight scientific advancements,
new research agreements, and biotech business
opportunities around the world. These initiatives include:
i) Government of India -- Recent policy developments will
make India a hotbed for biotech in the Asia–Pacific region.
ii) Queensland, Australia -- Biotechnology breakthroughs
in research and development within Queensland’s
biotechnology industry. R&D funding commitments, new
industry partnerships, new research collaborations, and
significant policy decisions, such as the Biodiscovery Bill.
iii) BioAdvance -- Greater Philadelphia Life Sciences study
findings. Greater Philadelphia area’s competitive position
within the life sciences industry. BioAdvance will release a
June 2005 Milken Institute study, titled “The Greater
Philadelphia Life Sciences Cluster: An Economic and
iv) Victoria, Australia -- New Biomedical Announcements, plus
latest results in the Kangaroo Genomics Project. Major
biomedical announcements and the latest results in kangaroo
genomics research projects. Victoria is partnering with the US
NIH on sequencing the kangaroo genome.
v) British Columbia -- Economic development incentives for
the biotechnology industry in Canada.
vi) Singapore -- The Biopolis of Asia. Singapore is dedicated
to enhancing human healthcare as one of the world’s most
preeminent life sciences hubs. Opportunities that currently
exist in Singapore as a base for R&D investment and as a
strategic location for Biomedical Sciences manufacturing.
; Biotech Industry Coming of Age Globally
The Ernst & Young Global Biotechnology Report 2005, Beyond Borders, concludes that the biotech industry is "coming of age" globally. The report shows the expansion of the industry beyond geographic, industry and product borders, the number of
alliances between biotech companies with each other, and the growth in revenues and move toward profitability of many companies.
The industry is maturing in the United States and gaining momentum in Europe. Asia is an emerging hotbed, said Michael Hildreth, Ernst & Young’s America’s biotechnology practice leader. Agricultural and industrial biotech is approaching critical mass and monoclonal antibodies and personalized medicine are
bringing new drugs to market.
There was a 14 percent increase in the number of cross-border
alliances, from 421 in 2003 to 480 in 2004. The report noted how aggressively countries and regions in all parts of the world were seeking to attract biotech companies. In 2004, 60 percent of alliances formed were between biotech companies not biotech
and big pharma, which had been a trend in the past.
The report, which was unveiled at BIO 2005 in Pennsylvania, also predicted that the industry in the United States, and possibly in Europe, might achieve aggregate profitability by the
end of the decade.
; FDI Outflows from US Hit Record US$252 billion
Foreign direct investment (FDI) outflows from the United States hit record levels in 2004, according to the OECD. The figures, newly published by the OECD in an article on “Trends and Recent Developments in Foreign Direct Investment”, showed FDI outflows reached US$252 billion in 2004. This is up from US$141 billion in 2003.
While this to some extent reflected the weakness of the dollar, it also confirmed continuing strong interest among US companies
in acquiring corporate assets abroad.
Of the largest 25 cross-border mergers and acquisitions in 2004, five had a US-based company as the acquirer. A recovery of M&A activity in 2004, meanwhile, has carried on into 2005. On present trends, both inward and outward FDI in OECD countries could increase by 10-15 percent in 2005, OECD estimates
Inward FDI into Germany and France, the two largest economies of the European continent, fell sharply in 2004. In France inward investment fell from US$43 billion to US$24 billion. In the case of Germany, foreign investors actually withdrew about US$39 billion from the country, reversing the inflow of US$27 billion recorded in 2003.
For the OECD area as a whole, FDI inflows continued on a downward trend, falling to US$407 billion in 2004 from US$459 billion in 2003. Outflows, on the other hand, rose from US$593 billion in 2003 to US$668 billion in 2004.
Against this background, net FDI outflows from OECD countries to the rest of the world reached record high levels in 2004: the
OECD area was a net contributor of US$261 billion worth of direct investment. China continued to receive a large share of the direct investment in developing countries, with inward FDI into mainland China rising to a record US$55 billion in 2004 from
US$47 billion in 2003. Asian financial centers Hong Kong (China)
and Singapore, with a total of US$50 billion in inward investment in 2004, also remain important destinations for FDI inflows.
While developing countries continue to be major recipients of
FDI, several are gaining importance as outward investors as well. In Latin America, large companies in Mexico and Brazil appear to be in a process of firstly engaging in regional integration through investment and then moving to develop truly
international corporate networks. Chinese enterprises have increasingly undertaken “strategic” investment abroad. While these trends are interesting in qualitative terms, however, the sums involved are still small by international comparison.
; Tokyo Tops Cost of Living Survey
Tokyo remains the world’s most expensive city, followed by Osaka, according to the latest Cost of Living Survey from Mercer
Human Resource Consulting. London moves down one position in the rankings to take third place, followed by Moscow which
also drops a place in 2005. Asuncion in Paraguay is the least expensive city in the survey.
With New York as the base city scoring 100 points, Tokyo scores 134.7 and is more than three times costlier than Asuncion, which has an index of 40.3.
Mercer’s survey covers 144 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. It is the world’s most comprehensive
cost of living survey and is used to help multinational companies and governments determine compensation
allowances for their expatriate employees.
There have been some significant changes in the rankings this year, primarily due to exchange rate fluctuations, particularly of
the US dollar and Euro.
Four of the world’s ten costliest cities are in Asia, with Tokyo being the most expensive city globally. Osaka takes 2nd position due to the strengthening of the Japanese Yen relative to the US dollar, (121.8) followed by Seoul in 5th place (115.4) and Hong Kong ranked 9th (109.5). Beijing is at position 19 (score 95.6) followed by Shanghai in 30th place (90.4).
London remains the most expensive city in Europe, with a score of 120.3. Steep accommodation and transport costs together
with the appreciation of the pound against the US dollar have contributed to the city’s high ranking. Scores are based on the cost of living for expatriates who are likely to stay in Central London, where accommodation is more expensive. Other UK
cities are less costly, with Glasgow in 40th position and Birmingham in 47th place (scores 87.5 and 85.8).
New York remains the most expensive city in North America, at 13th position in the rankings (score 100). Other costly cities include Los Angeles ranked 44 (86.7), San Francisco in 50th