High scores in investment decision criteria

In the previous issue of Info Suisse we reported that Switzerland follows Japan among the world’s most innovative nations according to a study produced by the Economist Intelligence Unit and sponsored by Cisco. Now a new study by Geneva-based World Economic Forum places Switzerland second after the United States in its 2007-2008 Global Competitiveness Report, measuring 131 of the world’s most competitive economies. Switzerland is credited with an excellent capacity for innovation, a sophisticated business culture, outstanding scientific research institutions and strong intellectual property protection. www.weforum.org

In another new report, The Economic Freedom of the World Index, published by Canada-based Fraser Institute, ranks Switzerland as the “freest” economy in Europe in 2007.  Hong Kong, Singapore and New Zealand lead the rankings of the 141 countries assessed based upon a market basket of 42 different criteria.  For additional information on this study, see www.fraserinstitute.ca.

In a hypothetical global “scorecard” of FDI decision criteria, Switzerland regularly ranks among the top 10 countries.  A few examples include 3rd in Europe in the “E-Readiness” index developed by the EIU and IBM; 1st in Europe in the Cato Institute Economic Freedom of the World 2007 Annual Report; 2nd in Foreign Policy’s Cultural Globalization Index, and 3rd in the 2006 European Competitiveness Index.  

Where our country falls within similarly focused studies depends largely on criteria being evaluated. 

Attracting companies to our alpine nation

Potential investors look at these and other statistics – including tax regimes and government-business relationships – to narrow their list of candidate countries.  Many of these candidates spend substantial amounts of money promoting their attractiveness as an FDI destination.  Yet Switzerland, with its comparatively modest program, regularly outperforms its size in securing new projects (see recent examples below).

As part of our activities, LOCATION Switzerland polls executives of companies that have invested in the country.  While criteria such as discussed above figure importantly there is a surprising unanimity among new settlers as to the important of “soft” factors influencing decisions to settle in Switzerland.  For example, despite claims by other countries, Switzerland truly is in the “heart of Europe,” and even more so as the former Eastern European countries become attractive business targets.  Our transportation and communications infrastructure is one to be emulated, providing easy movement of voice, data, people, goods and services throughout Europe and beyond.

Investors cite the advantage of our well-educated multilingual workforce, which facilitates doing business across several languages and cultures – important to building markets in diverse societies.  This is augmented by Switzerland’s opened labor market to 20 EU and EFTA nations, further increasing access to qualified personnel.

For many new investors Swiss lifestyle is the icing on the cake.  Indeed, this too is a measurable criterion, reported in studies by the Economist Intelligence Unit and the Mercer Human Resources Quality of Living Survey.  For example, the 2007 Mercer survey was the sixth in a row where Geneva and Zurich scored highest, while Berne ranked 9th.

Recent Project Announcements

LOCATION Switzerland, together with its partners and FDI agencies in the various cantons and regions together work to promote the country as a base of operations in Europe.  Here are some recently announced projects from North America. 

Minnesota-based grains, food and energy company CHS Inc. is establishing its new European, Middle East and African (EMEA) headquarters in Geneva and will launch operations in January 2008 with approximately 15 employees. Claudio Scarozza, senior vice president of the new operations, said “Switzerland, and especially Geneva, is a natural location for a business like ours, as it is the home of several companies in related businesses.  We are centrally located in Europe and can recruit from a highly qualified, multilingual workforce familiar with a number of cultural environments.  Indeed,” he said, “Switzerland is perhaps the most efficient country in Europe from which to conduct business given its excellent communications and transportation infrastructure, business-friendly government and realistic tax regime.”

CHS represents a further expansion of Geneva’s position as a European agribusiness, food and energy trading center. Other firms in the region include Cargill, Conagra, Davisco, Louis Dreyfus, Olam and Sempra Energy Trading.

Virginia-based Brainware, Inc., opened a new office for EMEA operations in Neuchatel.  The company is a leader in the high speed document capture market, which is expected to double in size in the next few years. Current staffing in Switzerland is expected to reach 30.  Also from Virginia, DeltaGee has established its European R&D and IP operations in Biel.  Founded in 2001, DeltaGee already has 17 patents and others pending in various areas designed to improve the efficiency of motors and the reduction of exhaust emissions.  The Biel project is expected to generate up to 70 new jobs over the next several years and a multi-million dollar investment.

Yahoo! announced that it will be establishing its European Data Center in Avenches, Canton Vaud. Yahoo! will purchase a Greenfield site measuring thirty-six thousand square meters for a reported 4.8 million SFr.  Upon completion, the data center is expected to employ a few dozen persons.

DST International, a subsidiary of Missouri-based DST Systems Inc, a provider of software and business process management solutions to the investment management industry, will open a subsidiary in Zurich by year-end 2007. Headquartered in Kansas City, DST is a publicly traded company that employs 9000 associates worldwide.

Reverse Investments

Investments flow both ways in dynamic economies. Swiss firms are quick to take advantage of opportunities to expand into the North American region.  Here are some examples of recent “reverse” investments.

One of Switzerland’s leading pharmaceutical and logistics providers, Galenica Group, announced that it has entered into an agreement to acquire Canada’s Aspreva Pharmaceuticals, a Victoria, BC-based pharmaceutical research and development company.  Reportedly the deal is valued at US $915 million and remains subject to shareholder and Canadian competition authority approvals.

Swiss pharma giant Roche will purchase NimbleGen for a reported US $273 million in an attempt to build its position in the genomics research market.  NimbleGen, based in Madison, Wisconsin, was founded in late 1999 with technology licensed from the University of Wisconsin and today has 140 employees.

Swiss electrical engineering group Von Roll Holdings AG acquired New Jersey-based John C. Dolph Company.  Dolph has last year sales of US $13 million in resins and varnishes for the electrical insulation industry.

Cambridge, Massachusetts-based Radius Health Inc. has entered into a strategic alliance with Novartis to develop and market a Phase 2 osteoporosis drug candidate.  Rights would include all markets other than Japan and could bring the company up to an estimated US $500 million.

From The “Foreign Desk”

Switzerland retains its attraction for FDI projects from other European countries and elsewhere in the world.  For example, German pharma wholesaler Phoenix Pharmahandel AG has reportedly acquired a majority stake in Swiss sector company Amedis Holding AG based in Basel.  Phoenix is active in 19 European countries and is the second largest wholesaler/distributor of pharmaceuticals on the Continent. Also, Designerdock, the largest communications employment agency in German-speaking Europe, has opened a subsidiary in Zurich.  The parent firm was founded in Berlin 10 years ago and today has a staff of 20 employees throughout Europe.

Another project from Germany is that of Ray Sono, a provider of Internet-based solutions for electronic business processes.  The company is opening a subsidiary in Zurich for reasons that include infrastructure, public transport, tax benefits, social and cultural life, educational resources and technology transfer, and the availability of well trained employees.

Sydney, Australia-based company Phoenix Global has opened an office in Zug. The company provides risk management and investigative solutions. Also in Zug, Bermuda-based Montpelier Re Holdings Ltd, a provider of global property and casualty insurance and reinsurance products, started operations in September to direct their activities in Europe and the Middle East.

The State Oil Company of Azerbaijan Republic (SOCAR), one of the largest oil companies in the world, announced that it will create a representative office in Geneva

On the relocation front, Nissan Europe has announced it will move its European headquarters from the Paris region to Rolle in the canton of Vaud, Approximately 100 executives will be involved in the transfer, which should begin early 2008. 

In other news from France, Paris-based international shipbroker Barry Rogliano Salles (BRS) has opened up a new office in Geneva “to serve the growing number of ship owners, oil companies and traders located there.” BRS will initially focus its efforts to Tanker Chartering and Newbuilding Projects with a team of four brokers. Lastly the Swiss branch of French bank Credit Agricole SA is to expand its logistics center in Vennes, north of Lausanne, with the construction of a new building worth 20 million Swiss francs. Currently employing about 300, the bank expects to add 200 additional jobs at the site by 2009.

About LOCATION Switzerland  

LOCATION Switzerland, with its headquarters in New York and its Washington office serves as a first stop for investors seeking confidential, unbiased and cost-free information and services.  In addition to providing access to regional and cantonal investment offices, the organization furnishes details on the Swiss tax system and incentives, legal and administrative requirements and how to collaborate with research centers and universities.  Other information includes residence and work permits, partnering with Swiss organizations in the prospect’s line of business, and a selection of ideal locations based on the prospect’s business.  In 2008, the LS program will be merged with the OSEC Swiss Business Network Switzerland under the combined roof of the so-called Swiss Haus der Ausenwirtschaft.

For details contact Andre Guedel, Director

Location: Switzerland

633 Third Avenue

New York, NY  10017

212 599-5700 Ext. 1064

  www.locationswitzerland.com