A View from the Regions: Europe

A View from the Regions: Europe

Team Europe provides coverage for 27 Western and Central European countries, from Ireland to Poland, Finland to Italy – that’s a lot of territory, and many different cultures and legal systems to juggle!

Of course, Europe is facing serious challenges, particularly recession in its Southern part. European companies that focus mainly on EU markets are suffering the most. For example, if you look at the large auto makers in Europe, you will see that German OEMs with major markets outside Europe (such as China and North America) have gone from record to record, whereas French firms, whose key markets are still in the EU, are struggling. Overall, Germany is actually doing reasonably well and remains the economic engine of the EU.

Major European banks face the biggest hurdles in funding. This means we are seeing a shortage in loan capacity for businesses. In particular, mid-sized companies with no access to capital markets are looking for additional financing sources. In this situation, EDC – with our AAA rating – is seen as a preferred partner, with a longer view of the market, which can provide much-needed additional loan capacity.

In line with Canadian industry capabilities, the automotive sector is one of our priorities in Europe. We recently closed a transaction with a French Tier 1 auto parts supplier, Compagnie Plastic Omnium, a family-owned “hidden gem” with €4.2 billion in sales and a global presence, including operations in the United States and Canada. This loan is expected to increase its purchases from Canadian suppliers. There are many similar mid-sized companies in Europe with whom Canadian companies can do business.

From ICT to infrastructure

Information and communications technology is another key sector of interest – as many major telecommunication providers are headquartered in Europe. We also see a lot of room for innovative Canadian companies to provide new solutions in growth areas such as the Internet-connected car and e-health.

In Central Europe there is strong demand for infrastructure projects and public private partnerships. New oil and gas projects are also coming into focus, with major global players out of the U.K. and Scandinavia, and new resources in countries like Poland (e.g. shale gas). These are all areas where Canadians can add proven skills and technologies.

EU Snapshot:

  • Comprises 27 countries and 500 million people
  • World’s largest importer of goods; nearly 3 times U.S. imports
  • Canada’s second largest trade & investment partner
  • EU’s share of Canada’s exports doubled from 4.5% (2002) to some 9% (2011)

Most interesting perhaps, Western Europe is a hub for supply chains into emerging markets. We are helping Canadian companies feed into these networks, particularly in power generation and infrastructure projects in Africa and Eastern Europe.

As I touched on earlier, the EU consists of diverse cultures and legal systems. For example, German and French companies have rather strong hierarchical structures. In Germany, to arrange a meeting at the senior management level, you need to do so up to three months in advance. And French business can seem like a “closed shop” to an outsider.

Given the long-standing traditions, an established network is key to getting access to decision makers. Collaborating with local financial institutions – as we do at EDC – helps to open doors. Also our colleagues in Canada’s Trade Commissioner Service throughout Europe have many contacts and local expertise in the right circles. Together, we can help you establish relations and deals with European global companies.

In the current economic situation and with a free trade agreement in the works, Canada is “on the radar” of many EU companies as never before – as both an investment partner and destination. My colleagues Charles Edgeworth, Anna Wozniak and Anna Pipin and I are pleased to help you do business in Europe.

Klaus Houben, EDC Senior Regional Manager, Europe, based in Düsseldorf, Germany
khouben@edc.ca

Categories Europe, Regional Insights

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