Hubert Sawicki Independent Consultant AMT The Expanded EU What It Presents for AMT Members & How AMT Can Help Market Update Breakfast Central/Eastern Europe September 9, 2006

What is Central Europe and where it ends Multinational – Multicultural – Multilingual. Just check Norman Davies & his books on history of Europe Economically connected with the West stronger than ever – the EU factor - Poland, Czech Republic, Slovakia, Hungary, Slovenia – members of the EU from May 1, Impeccably Central European - Baltic countries, ie. Estonia, Latvia, Lithuania - members of the EU from May 1, Since then counted as Central European - Romania, Bulgaria– members of the EU from January 1, Rather Eastern Central Europe - Balkan countries (Croatia, Serbia, Montenegro, Bosnia Herzegovina, Macedonia) – future less certain, as the European Union displays little enthusiasm about their membership. Rather Southern Central Europe

Some call it Middle European Region 1st Circle – 200 km radius 2nd Circle – 500 km radius

Area 5 CE Countries vs. Germany

Population 5 CE Countries vs Germany (Millions)

GDP 5 CE Countries vs. Germany (Billions US Dollars)

What is the scope for AMT members in CE Poland, Czech Republic, Slovakia, Hungary, Romania are our region: its total population 86.5, total GDP $1,146.9 bn. To compare it with the German industrial powerhouse: population 82.4 m, GDP $2,504 bn. One particular feature in common: significant automotive sector, to the capacity of over 2 m cars per annum - Peugeot-Citroen, Renault, Audi-Volkswagen, GM, Toyota, Hyundai, Kia are all there, to name a few Well above 2000 factories are working for automotive sector producing parts and components. And Tier1/Tier 2 suppliers are AMT points of interest Southern Poland, Czech Republic and Slovakia form a cluster of automotive sector plants within 200 km radius

Production of 3 m cars forecasted 2007 Automotive Output Middle European Region

What else is there for AMT members in CE Other industries of 5 countries requiring machine tools and manufacturing technologies: 1.diverse general engineering - strong in all countries, especially in Czech Republic, Poland and Hungary 2.aviation mainly in Poland and some in Czech Republic 3.oil industry in Romania Educated and skillful local workforce - no longer low-paid, but still paid very competitively Overall competitive cost of manufacturing Americans are well received in all these countries Good outpost for future business in Eastern Europe proper, ie. in Ukraine and Russia

Industries in 5 CE countries Czech Rep: metallurgy, machinery and equipment, motor vehicles, aviation, glass, armaments Hungary: mining, metallurgy, construction materials, processed foods, textiles, chemicals (especially pharmaceuticals), motor vehicles Poland: machine building, motor vehicles, aerospace, iron and steel, metal products, coal mining, chemicals, shipbuilding, food processing, glass, beverages, textiles Romania: textiles and footwear, light machinery and auto assembly, mining, timber, construction materials, metallurgy, chemicals, food processing, petroleum refining Slovakia: metal and metal products; food and beverages; electricity, gas, coke, oil, nuclear fuel; chemicals and manmade fibers; machinery; paper and printing; earthenware and ceramics; transport vehicles; textiles; electrical and optical apparatus; rubber products

GDP Composition 5 CE Countries vs Germany (%) Agriculture Industries Services Germany Czech Rep Poland Slovakia Hungary Romania

AMT in Central/Eastern Europe renewed efforts in the region to make this substantial market work for AMT members - reassessment of prospects has been made - a very successful 3-country Trade Mission in April, - a 4-country visit breaking new grounds in July - my appointment as “AMT’s man in the region” 5 main Central European countries to remain under AMT’s particular scrutiny; efforts to develop markets there for the benefit of AMT members Eastern Europe (Ukraine and Russia) watched closely AMT presence intended to intensify

What I can do for you (1) Research, to identify and gather information for you Identify market potential and specific customers for machine tool products Identify and pre-assess agents and distributors in your areas of interest Assist you in identification and meeting companies with prospects for potential development of strategic alliances, especially in manufacturing Participate in updating the appropriate information on the region and on AMT for the region Advise AMT on rationale of more structured AMT presence in the region

What I can do for you (2) Organizing events, participating and visiting, and travelling with you Help to organize and participate in trade missions and market investigation trips Promote AMT-sponsored shows and promote your products, services and interests Participate in conferences/seminars in the region to promote AMT and your activities Help to organize seminars, machine tools and tools exhibitions with your interests in mind If required travel with you while you are in the region

What I can do for you (3) Contacting people and organizations of importance Remain in contact with local machine tools and tools associations (at present established in Czech Republic – the strongest, also in Poland and Romania) Remain in contact with other associations of companies representing potential customers for the AMT members products, especially in automotive Co-operate with the US Commercial Services, and American Chambers of Commerce in a given locality Assist in conferences/seminars concerning trade within the region

GDP per capita 5 CE countries vs. Germany (US Dollars) & GDP per capita USA

My contact details Hubert Sawicki (office phone) (fax) (mobile phone) Location: Warsaw - Poland YOU ARE MORE THEN WELCOME TO USE THEM AS REQUIRED Please take into account 6 hours difference between Washington DC and my office in Warsaw Poland as well as most of the countries in the region Thank you for your attention!