APPENDIX B, DATA ON BEST PROSPECTS FOR AGRICULTURE AND INDUSTRY SECTOR EXPORTS A. Industry Sector Exports (All Statistics in Sections D-H Are in US$ Millions) A: Rank: 1 B: Name of Sector: Computers and Peripherals C: ITA Code: CPT 1993 1994 1995 D: Total Market Size 1,400 1,500 1,600 E: Total Local Production 100 100 100 F: Total Exports 50 50 50 G: Total Imports 1,350 1,450 1,550 H: Total Imports from the U.S.A. 300 300 300 I: Exchange Rate 6.48 6.50 6.50 Comments: U.S. companies supplying directly from the United States or from third countries have the bulk of the market and are industry leaders. Local production is insignificant. Third country competition is substantial. Most of it consists of U.S. branded products supplied from U.S. owned subsidiaries in Europe or elsewhere. The PC installation base is over one million units, or one for every five Danes. Most major U.S. suppliers operate through fully owned subsidiaries. An estimated 60 percent of the PC's used professionally are operated in networks. Only state-of-the-art equipment is suitable for this market, and even then the allocation of considerable resources may be required for successful marketing. A. Rank: 2 B: Name of Sector: Computer Software C: ITA Code: CSF 1993 1994 1995 D: Total Market Size 1,100 1,200 1,250 E: Total Local Production 400 450 500 F: Total Exports 200 225 275 G: Total Imports 900 975 1,025 H: Total Imports from the U.S.A. 800 875 900 I: Exchange Rate 6.48 6.50 6.50 Comments: Denmark is a highly computerized society with a large and growing market for software. However, fierce competition and constant price reductions prevent the high growth from being fully reflected in sales statistics. Local software houses are quite successful, but are increasingly being either acquired or subjected to control by foreign system vendors, most often from the United States. Thus, neither local production nor third country suppliers appear likely to undermine the dominant position that U.S. software firms have in this market. A: Rank: 3 B: Name of Sector: Architectural/Construction/Engineering Services (Major Projects) C: ITA Code: ACE 1993 1994 1995 D: Total Market Size 400 500 700 E-H: Not Available, see below Comments: We have included this product category as No. 3 in the Best Prospects List solely because of the three major construction projects in progress and scheduled for initiation and completion during the next 6-10 years. These include one major bridge and tunnel presently under construction, and another two bridges (to Sweden and to Germany) tentatively scheduled to be built from 1994 to 2000. Each of those is valued at US$ 3 billion or more. Additionally, two light rail systems will be constructed, one around Copenhagen and the other near Kastrup Airport. Because all these projects are subject to future international bidding, and the price of the successful bidders will determine the cost, data for items E through H do not exist. The data provided in item D, total market size, are USFCS estimates of the total value of contracts expected to be signed during the years listed. Detailed information on the time-frame of the bidding process will be reported as developments occur. Interested U.S. civil engineering/construction companies may obtain copies of USFCS reports from USDOC/ITA/TD. U.S. civil engineering companies, because of proven tunnel and/or bridge-building expertise and experience with light railway systems have a good chance to win contracts, especially in joint-ventures or consortia with local or European partners. A: Rank: 4 B: Name of Sector: Travel & Tourism Services C: ITA Code: TRA 1993 1994 1995 A: Expenditures by Danish Tourists Abroad 3,216 3,500 3,700 B: Expenditures by Danish 200 220 230 Tourists in the U.S.A. I: Exchange Rate 6.48 6.50 6.50 Comments: Data are not available to complete the standard format for Best Prospects matrix purposes. Nevertheless, the size of the Danish tourist market and the amount of USFCS effort expended in promoting Danish tourism to the United States qualifies this sector as a best prospect. In 1993, 103,000 Danes visited the United States. In spite of an often turbulent travel market, the number of Danes visiting the United States has remained stable over the past five years and will increase this year. Florida is the most popular destination followed by New York and California. Danish tourists are good spenders with average expenditures of over US$2000 per person during their U.S. trips. The United States will earn about 6% of total Danish foreign tourism expenditures in 1994 and about US$3 for every US$1 that American tourists spend in Denmark. A: Rank: 5 B: Name of Sector: Apparel C: ITA Code: APP 1993 1994 1995 D: Total Market Size 1,165 1,245 1,310 E: Total Production 997 1,065 1,120 F: Total Exports 1,057 1,140 1,200 G: Total Imports 1,225 1,320 1,390 H: Total Imports from U.S.A. 17.3 18.5 19.4 I: Exchange Rate 6.48 6.50 6.50 Comments: The market size is lower in value than the imports shown above due to large reexports. Apparel sales are forecast to increase in Denmark with the expected general increase in private consumption. Leisure wear and sportswear offer the best potential. Danes are less brand conscious than consumers in many other countries. Price and quality are their watchwords. Major competitors are Portugal, Poland and Far Eastern countries. Denmark is a major producer of work clothes and protective clothing. A: Rank 6 B: Name of Sector: Oil and Gas Field Machinery C: ITA Code: OGM 1993 1994 1995 D: Total Market Size 240 285 310 E: Total Production 16 18 20 F: Total Exports 8 9 10 G: Total Imports 232 276 300 H: Total Imports from U.S.A. 120 150 180 I: Exchange Rate 6.48 6.50 6.50 Comments: The United States is a recognized industry leader for this type of equipment. Local production is insignificant, major third country suppliers are the U.K. (35%) and Germany (12%). Recent decisions to invest in additional off-shore exploitation equipment offer excellent opportunities for U.S. companies. A: Rank: 7 B: Name of Sector: Telecommunications Equipment C: ITA Code: TEL 1993 1994 1995 D: Total Market Size 325 340 357 E: Total Production 50 55 60 F: Total Exports 15 17 20 G: Total Imports 290 302 317 H: Total Imports from U.S.A. 25 28 31 I: Exchange Rate 6.48 6.50 6.50 Comments: Denmark's liberalization process continues. Denmark was one of the first countries in Europe to introduce the GSM cellular telephone system. During 1994 Denmark is taking the lead in setting up its part of the pan-European Ermes paging system and will submit a concession for public bidding in June, 1994. A favorable decision on liberalizing general telephone company operations is expected during 1996. Local production is strong in satellite communications equiment, but U.S. suppliers also have good opportunities. Japan is the major third-country supplier of satellite communications equipment. Sweden and Germany are other important third-country suppliers. A: Rank: 8 B: Name of Sector: Electrical Power Systems C: ITA Code: ELP 1993 1994 1995 D: Total Market Size 700 730 740 E: Total Production 330 350 380 F: Total Exports 120 150 180 G: Total Imports 490 530 540 H: Total Imports from U.S.A. 35 38 40 I: Exchange Rate 6.48 6.50 6.50 Comments: Danish power plants are very traditional in their buying habits and it is therefore difficult for new-to-market firms to enter this sector. Local production plays an important role, but most equipment is imported, mainly from neighboring countries, and from the Czech Republic. Large item purchases must now be announced for international bidding, giving new-to-market companies fair opportunities to win contracts. A. Rank: 9 B. Name of Sector: Pollution Control Equipment C. ITA Code: POL 1993 1994 1995 D. Total Market Size 302 317 333 E. Total Local Production 435 457 480 F. Total Exports 219 230 242 G. Total Imports 86 90 95 H. Total Imports from U.S 7 7 8 I. Exchange Rate 6.48 6.50 6.50 Comments: In October, 1993 the EC (EU) decided to locate the European Community's Environment Agency in Denmark. U.S. companies interested in exporting pollution control equipment to Europe may want to consider establishing or upgrading their representation in Denmark since the new Agency will increase Denmark's already strong influence on EC Environmental matters. The location of the Agency should also increase the desirability of Denmark as a manufacturing site or source of joint venture partners. Denmark's local production of pollution control equipment exceeds the total market but much of this production is for export and some types of equipment are not locallly produced. The major competitors for the Danish import market are Germany and the United Kingdom. One Danish company, I. Kruger, has a market share of 75 percent of waste water plants in Denmark. A: Rank: 10 B: Name of Sector: Medical Equipment C: ITA Code: MED 1993 1994 1995 D: Total Market Size 310 325 341 E: Total Production 100 105 110 F: Total Exports 60 60 65 G: Total Imports 270 280 296 H: Total Imports from U.S.A. 44 48 53 I: Exchange Rate 6.48 6.50 6.50 Comments: Denmark's hospitals are almost all publicly owned, and practically all medical care is subsidized. With increasingly tight government budgets, labor-saving equipment, especially high-tech diagnostic and surgical equipment, have good potential. In selected areas (heart-lung machines and disposable products), local production plays a dominant role. Major third country suppliers are Sweden, Germany, and the U.K. A. Rank: 11 B. Name of Sector: Sporting Goods C. ITA Code: SPT 1993 1994 1995 D. Total Market Size 206 220 230 E. Total Local Production 155 165 173 F. Total Exports 105 113 119 G. Total Imports 156 168 176 H. Total Imports from U.S.A. 11.2 12.0 12.6 I. Exchange Rate 6.48 6.50 6.50 Comments: Sporting goods sales should profit from an expected general increase in private consumption. Sales of sporting guns and accessories have the best potential. Good weather during the five past summers has resulted in increasing interest in camping, fishing and water sports. Major competitors are Germany, the United Kingdom and China. Denmark is a major producer of bicycles, tents, and balls. A: Rank: 12 B: Name of Sector: Laboratory and Scientific Instruments C: ITA Code: LAB 1993 1994 1995 D: Total Market Size 150 155 160 E: Total Production 85 85 90 F: Total Exports 40 40 45 G: Total Imports 105 110 115 H: Total Imports from U.S.A. 20 21 25 I: Exchange Rate 6.48 6.50 6.50 Comments: Denmark has an important biomedical and pharmaceutical industry with significant research laboratory activity. Laboratory and scientific instruments are also required by a number of Government and educational laboratories. Significant local production exists but not sufficient to avoid significant imports. Major third-country suppliers are Japan, Germany, and the U.K. A: Rank: 13 B: Name of Sector: Building Products C: ITA Code: BLD 1993 1994 1995 D: Total Market Size 315 330 345 E: Total Local Production 175 180 190 F: Total Exports 20 20 25 G: Total Imports 160 170 180 H: Total Imports from the U.S.A. 11 12 13 I: Exchange Rate 6.48 6.50 6.50 Comments: For several years Denmark has suffered sharply reduced activity in the construction industry. The current renewed growth in the economy is likely to reverse this trend. Local production plays a very important role and meets more than half of total demand. Third country competition is mainly from Europe. U.S. exports to Denmark consist mainly of unfinished products such as veneer, plywood and other raw materials. The sales of finished U.S. products are limited due to differences in standards, size and taste. A. Rank: 14 B: Name of Sector: Automotive Parts and Service Equipment C: ITA Code: APS 1993 1994 1995 D: Total Market Size 340 375 375 E: Total Local Production 350 350 350 F: Total Exports 320 320 320 G: Total Imports 310 345 345 H: Total Imports from the U.S.A. 10 10 10 I: Exchange Rate 6.48 6.50 6.50 Comments: There are about 1.6 million passenger cars in Denmark, or one for every three Danes. New car sales are expected to reach 125,000 units in 1994, up from around 75,000 in 1993. High taxes on cars result in long life cycles, offering good opportunities in the after-market. However, these opportunities exist primarily for large vendors with pan-European distribution. While local production is very substantial, most producers act as OEM suppliers to manufacturers outside Denmark. Competition from local manufacturers is therefore not felt strongly in most segments of the Danish after-market. Although direct exports from the United States are low, U.S. brand market share is very substantial. Third country competition mostly stems from plants in Western Europe. A. Rank: 15 B: Name of Sector: Aircraft and Parts C: ITA Code: AIR 1993 1994 1995 D: Total Market Size 80 160 160 E: Total Local Production 0 0 0 F: Total Exports 0 0 0 G: Total Imports 80 160 160 H: Total Imports from the U.S.A. 70 150 150 I: Exchange Rate 6.48 6.50 6.50 Comments: There is no production of aircraft in Denmark. U.S. aircraft are preferred by the joint-Scandinavian owned SAS, and the growing Danish Maersk Air. Two-sevenths of the SAS fleet are registered in Denmark, two-sevenths in Norway, and three-sevenths in Sweden, reflecting distribution of national ownership. Recorded aircraft imports fluctuate among the three countries that own the airline in accordance with where new SAS aircraft are registered. Imports are expected to double from 1993 to 1994 and remain at the 1994 level in 1995 because SAS will take delivery of a fleet of new aircraft in 1994 and 1995. B.1 Agricultural Sector exports (Metric tons, unless otherwise stated) A. Rank: N/A B. Name of Sector: Wines C. ITA or PS&D Code: N/A 1993 1994 1995 D. Total Market Size 1/:131,682 137,000 142,000 E. Total Local Production: Nil Nil Nil F. Total Exports: 0 0 0 G. Total Imports: 131,682 137,000 142,000 H. Total Imports from U.S.A 4,870 5,620 6,400 I. Exchange Rate: 6.483 6.500 6.500 1/ Thousand liters. Comments: Denmark ranks fourth in total volume and fifth in total value among all overseas destinations for U.S. wine exports. Sales of U.S. wines have increased ten-fold in the past 6-7 years, reaching $6.3 million in CY 1993. About two-thirds of all wine sales are channeled through large grocery chains and another 10 percent are sold in small supermarkets. Most of the remainder is sold through either hotels/restaurants (11 percent) or wine dealers (9 percent). Over 90 percent of wine sold on the Danish market is priced under $7.00 per bottle. Mark-ups in supermarkets come to about a third of the f.o.b. export value, while that in wine retail shops stands at two-thirds of the export value and that in restaurants/hotels at 5 times the f.o.b. value. U.S. wine industry promotion funding and interest in the Danish market are up substantially over the past few years. A. Rank: N/A B. Name of Sector: Dry Nuts C. ITA or PS&D Code: N/A 1993 1994 1995 D. Total Market Size: 12,880 14,140 15,515 E. Total Local Production: Nil Nil Nil F. Total Exports: 400 440 485 G. Total Imports: 13,280 14,580 16,000 H. Total Imports from U.S.A. 3,954 4,300 4,700 I. Exchange Rate: 6.483 6.500 6.500 Comments: While the tax and duty structure on dry nuts is rather prohibitive, competitive pricing by such alternative suppliers as South Africa and Turkey also affect marketing prospects within the retail trade. An especially high degree of interest among grocery chains exists for pistachio nuts. A. Rank: N/A B. Name of Sector: Breakfast Cereals C. ITA or PS&D Code: N/A 1993 1994 1995 D. Total Market Size: 24,000 25,000 26,000 E. Total Local Production: 50,150 53,500 55,300 F. Total Exports: 48,650 53,515 57,300 G. Total Imports: 22,500 25,000 28,000 H. Total Imports from U.S.A. 0 35 70 I. Exchange Rate: 6.483 6.500 6.500 Comments: The retail food trade is looking for "something new" in the breakfast food line and views as attractive the rather diverse character of American breakfast cereals. This quality also holds a special appeal to the consumer, who values ease of preparation and cereals with a strong healthy quality. A. Rank: N/A B. Name of Sector: Turkey Meat C. ITA or PS&D Code: N/A 1993 1994 1995 D. Total Market Size: 13,620 15,100 16,500 E. Total Local Production: 9,000 10,000 11,000 F. Total Exports: 850 900 1,000 G. Total Imports: 5,470 6,840 8,550 H. Total Imports from U.S.A. 5 10 20 I. Exchange Rate: 6.483 6.500 6.500 Comments: Recent problems with sales of chicken and pork products and the grocery trade's interest in new "white" meat products make the current marketing opportunities for turkey products very attractive. This is especially true for the processed, value added line of products now available in many U.S. supermarkets. A. Rank: N/A B. Name of Sector: Sweet Corn, Frozen C. ITA or PS&D Code: N/A 1993 1994 1995 D. Total Market Size: 3,975 4,370 4,815 E. Total Local Production: Nil Nil Nil F. Total Exports: 190 210 215 G. Total Imports: 4,165 4,580 5,030 H. Total Imports from U.S.A. 74 80 85 I. Exchange Rate: 6.483 6.500 6.500 Comments: N/A A. Rank: N/A B. Name of Sector: Cantaloupe & Other Melons C. ITA or PS&D Code: N/A 1993 1994 1995 D. Total Market Size: 5,640 6,500 6.500 E. Total Local Production: Nil Nil Nil F. Total Exports: Nil Nil Nil G. Total Imports: 5,640 6,300 7,000 H. Total Imports from U.S.A. 0 0 0 I. Exchange Rate: 6.483 6.500 6.500 Comments: N/A A. Rank: N/A B. Name of Sector: Popcorn C. ITA or PS&D Code: N/A 1993 1994 1995 D. Total Market Size: E. Total Local Production: Nil Nil Nil F. Total Exports: G. Total Imports: H. Total Imports from U.S.A. 2,645 3,300 3,600 I. Exchange Rate: 6.483 6.500 6.500 Comments: Flavored microwave popcorn varieties would be especially attractive to many grocery chains, supermarkets and kiosk outlets.