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EMERGING EUROPE – “OPPORTUNITIES CLOSE TO

HOME”A Strategic Opportunity for Black Country Business

Jonathan Allen

HM Ambassador to Bulgaria

22nd November 2013

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1. What is Emerging Europe? A region stretching from Austria to

Romania, from Poland to Croatia 110 million consumers A combined GDP of over £ 1 trillion Easy and inexpensive access – located

just 2-3 hours from the UK Potential to double exports by 2020 All EU regulated, part of the EU’s Single

Market Lower overall risk profile than emerging

markets further from the UK Proven market for UK businesses

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Average Annual GDP Growth Forecast (%)2010-2020

2020-2030

2030-2040

CEE Average 4.7 4.2 3.8

Dev. World 1.8 1.8 1.9

Asia 5.8 5.1 4.7

Latin America 4.9 4.5 4.1

2. Sustainable Medium-term Growth... ...on a par with other emerging

economies

Source: HSBC The World in 2050

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3. Main Challenges

Outdated perceptions of the region among business in the UK

Bureaucracy Transparency Strong and increasing

competition

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4. Doing Business in Emerging EuropeEase of Doing Business Corruption Perceptions

World Bank Ease of Doing Business Survey2013, rankings 1-185

Transparency International Corruption Perceptions Index 2012 – rankings from 1-174

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5. A Competitive Marketplace

The UK barely manages 3% of Emerging Europe’s total imports

We are lagging behind Germany, Italy and France

Poland Romania Czech Republic Hungary

1. Germany Germany Germany Germany

2. Russia Italy China Russia

3. The Netherlands Hungary Poland China

4. Italy France Slovakia Austria

UK? 19th 11th 29th 14th

Source: CIA Fact book

Source of Imports - 2011

Disappointing…but a real opportunity!.

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6. Emerging Europe Energy Energy sector less affected by downturn

Seven out of the top ten companies are energy and resource companies with revenue growth figures from 5% to 45% higher*

In ten years energy consumption grew by 10% in the region, and is expected to increase even further – 30% growth in demand by 2030 compared to the OECD average of 4%**

Countries are upgrading existing facilities, diversifying their overall energy mix and modernising grids

The region is a significant recipient of EU funding

The modernisation of the energy sector in the nine markets of Emerging Europe is the single largest

opportunity in the region for UK business.*Deloitte Central Europe Top 500 report, ** BP Energy Outlook

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7. British Success Stories

*Deloitte Central Europe Top 500 report, ** BP Energy Outlook

• Extracting natural gas in the Black Sea

• EUR 140 million invested since 1998

• 15% of Bulgaria’s natural gas consumption

• 60% of $189 million gas production revenues in 2011

• High level and sustained support from FCO/UKTI/Embassy (Kavarna East production concession August 2012)

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8. British Success Stories

*Deloitte Central Europe Top 500 report, ** BP Energy Outlook

William Hughes Ltd

• Wire form and spring making for aerospace and automotive

• Factory near Plovdiv since 2003

• Complementary UK & Bulgarian production facilities (more strings to the bow/better chance of winning contracts)

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9. Driving Growth in Emerging Europe The region is underexploited by UK firms.

If we matched the trading performance of our main European competitors, an additional £30 billion could be added to the UK’s GDP

Our regional sector specialists mean one point of entry for the nine countries

Write to us at emergingeurope@fco.gov.uk

Or visit the Emerging Europe landing page on UKTI’s website

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10. Emerging Europe Mega-Mission

Thank you for listening.

Save the Date: 3rd to 7th of March 2014 Be a part of the GREAT Emerging Europe Trade Show 5 Cities in 5 Days For more information email: emergingeurope@fco.gov.uk