1. 1 Productivity Industries Market Investment Incentives Contacts Trade David J. Warne Gateway to Europe Macao International Trade and Investment Fair 21st October 2005 Germany: Patrick von Wrede – Project Manager

2. 2 Productivity Industries Market Investment Incentives Contacts Trade Invest in Germany Invest in Germany GmbH Anna-Louisa-Karsch-Str. 2 10178 Berlin, Germany Invest in Germany, headquartered in Berlin, is the primary contact for companies establishing or expanding their corporate presence in Germany. Invest in Germany: Financed by the Federal Ministry of Economics and Labour Promotes Germany’s advantages as a business location; Provides target groups with sector specific information; Connects investors to Germany’s business development networks; Coordinates site selection proposals and tours throughout Germany. Phone: +49-30-206-57-100 Fax: +49-30-206-57-111 E-Mail: office@invest-in-germany.com www.invest-in-germany.com

3. 3 Productivity Industries Market Investment Incentives Contacts Trade Why Choose Germany? Investment High Quality Specifications Large Qualified Labor Pool Business & R&D Cooperation Stable Legal Environment Largest Market in Europe Market Access Excellent Communication Systems Short Delivery Times State of the Art Freight Villages Dense OEM Concentration Central Location Efficient Infrastructure Productivity Tradition of Industry Success Kiel Lübeck Rostock Bremen Wilhelmshaven Erfurt Wiesbaden Heidelberg Freiburg Mainz Saarbrücken Essen Schwerin Hamburg Dresden Leipzig Hannover Frankfurt Nürnberg Munich Düsseldorf Magdeburg Stuttgart Bonn Cologne Berlin Potsdam A variety of competitive advantages make Germany a premier destination for foreign investment.

4. 4 Productivity Industries Market Investment Incentives Contacts Trade A recent study by Ernst & Young ranked Germany #1 in several key areas: Most Attractive Business Location in Europe Investment Domestic Market Transport & Logistics 0 5 10 15 20 25 30 GermanyUKFranceScandinavia 0 5 10 15 20 25 30 GermanyUKFrancePoland 0 5 10 15 20 25 30 35 GermanyFranceUKNetherlands 0 5 10 15 20 25 30 35 GermanyUKFranceScandinavia Research & Development ComplexLocal Labor Skills 1#1# 1#1# 1#1# 1#1# Reason: Richest Economy & Biggest Consumer Reason: Central Location & Advanced Infrastructure Reason: Most Funding & Highest Network Connectivity Reason: Highest Quality & Maximum Skill-Sets Source: Ernst & Young, “2005 European Attractiveness Survey”

5. 5 Productivity Industries Market Investment Incentives Contacts Trade Market The Heart of Europe A central geographic location grants access to all European markets. 24 h 3 h 1.5 h 48 h 24 h Warsaw Rome Source: Eurostat (Queen Tree) * Forecasted Population (millions) GDP per Capita (€) GDP Growth 460 23,100 2.0% European Union (2005)* Prague Berlin Vienna Budapest Paris London Brussels Stockholm Madrid Riga Helsinki Athens Copenhagen Moscow

6. 6 Productivity Industries Market Investment Incentives Contacts Trade Germany 21% Germany 18% Germany is the largest market in the European Union by both GDP and population. Source: Eurostat Market Europe’s Leading Economy Germany2207.282.5 United Kingdom1715.859.5 France1648.459.9 Italy1351.357.8 Spain837.642.2 Netherlands466.316.3 Belgium283.810.4 Sweden279.09.0 Austria237.08.1 Poland195.238.2 Denmark194.45.4 Greece165.311.0 Finland149.75.2 Ireland146.24.0 Portugal135.010.5 Czech Republic86.210.2 Hungary80.810.1 Slovakia33.15.4 Slovenia25.92.0 Luxembourg25.70.5 Lithuania18.03.4 Cyprus12.40.7 Latvia11.12.3 Estonia9.01.4 Malta4.30.4 European Union (25) 10266.5456.4 United States9434.0291.7 Eurozone7601.2308.4 CountryGDP € Billion Population Million (2004) GDP in Percent of EU Total (2004) Percent of Total EU Population (2004) Rest of European Union

7. 7 Productivity Industries Market Investment Incentives Contacts Trade Kiel Lübeck Rostock Bremen Wilhelmshaven Erfurt Potsdam Wiesbaden Kassel Heidelberg Freiburg Karlsruhe Mainz Kaiserslautern Saarbrücken Dortmund Aachen Essen Schwerin Heilbronn Würzberg Ulm Osnabrück Duisburg Market Efficient Transportation Infrastructure Transportation (in KM) GermanyFrance UKItaly Germany 301,230 357,021244,820547,030 in sq. km Freight Rail Networks Total Railways 17,128 40,327 31,852 16,014 Total Highways 11,978 8,317 3,344 6,439 Major Cities Navigable Waterways Inland Water Transport 7,450 5,235 5,374 German Autobahn Source: Eurostat Germany’s advanced infrastructure, in the center of Europe, facilitates access to European markets in all directions. Major Airport Hamburg Dresden Leipzig Halle Hannover Chemnitz Frankfurt Nürnberg Munich Düsseldorf Regensburg Magdeburg Frankfurt (Oder) Bamberg Stuttgart Bonn Cologne Berlin 3,228

8. 8 Productivity Industries Market Investment Incentives Contacts Trade Source: German Federal Statistics Office Trade Demand for German Products France Italy Poland Russia Japan UK USA 15.0 18.8 17.8 Czech Republic 61.1 75.3 52.4 Exports 733.5 12.9 64.8 German products find ready markets around the world. Brazil 21.0 4.7 China Germany (In € Billion, 2004)

9. 9 Productivity Industries Market Investment Incentives Contacts Trade High quality, competitively priced goods make Germany the largest exporter. World’s  1 Exporter Source: United Nations Statistics Division - Commodity Trade Statistics Database, *Ministry of Finance (Japan) Trade €uro Billion (2004) GermanyUSAChinaJapan*FranceItalyUKCanadaBelgium 733 577 658 1226 477 451 438 352 330 346 281 282 280 371 254 220 246 229 0 200 400 600 800 1000 1200 1400 L Top Ten Traders (2004) World Merchandise Trade Imports Exports

10. 10 Productivity Industries Market Investment Incentives Contacts Trade Electrical Machinery & Apparatus Source: German Federal Statistics Office Main Segments of German Trade Germany is a leading exporter of high quality manufactured products. * Includes Watches and Clocks €uro Billion (2004) Equipment 20 40 60 80 100 120 140 Export by Product Segment Import by Product Segment Medical, Precision & OpticalInstruments*Communication Equipment& Electronic ComponentsChemicals & Chemical ProductsMachinery & IndustrialMotor Vehicles & Trailers Major Air Freight Centers Bremen Berlin Leipzig/Halle Hanover Frankfurt Nürnberg Munich Stuttgart Cologne/Bonn Düsseldorf Hamburg Erfurt Rostock Cuxhaven Bremerhaven Emden Kiel Wilhelmshaven Greifswald Lübeck Maritime Freight Ports Trade

11. 11 Productivity Industries Market Investment Incentives Contacts Trade Source: UN Export Statistical Division - Commodity Trade Statistics Database * 2003 stats Premium vehicles Made in Germany are appreciated around the world. German Automobile Exports Motor Vehicles Exports in Billion €uro (2004) Others23.8% Switzerland2.4% Austria2.6% Netherlands 2.8% Japan3.5% Belgium6.2% Spain7.0% France7.2% Italy10.3% UK14.5% USA19.7% Trade Destination German Automobile Exports In Percent (2004) 6.5 6.8 18.0 19.8 20.2 23.1 28.3 29.5 68.4* 80.2

12. 12 Productivity Industries Market Investment Incentives Contacts Trade World class human resources and a superlative R&D infrastructure make Germany fertile ground for innovation. Source: European Patent Office (EPO), and German Patent Office * generation, conversion, and distribution Productivity A Leader in Innovation Countries with the most EPO patent approvals (2004). 1. Passenger Automobiles 2. Mechanical Parts 3. Survey and Measurement Equipment 4. Electronic Components 5. Medicine and Veterinary Products 6. Broadcasting Technology 7. Combustion Engines 8. Packaging and Logistics 9. Data Analysis 10. Electrical Energy Supply* Top 10 German Patent Segments (2004) USA 24% Italy 4% France 7% Japan 18% Germany 23% Others 13% Netherlands 3% Switzerland 4% UK 4%

13. 13 Productivity Industries Market Investment Incentives Contacts Trade Source: European Commission, Statistical Annex of European Economy SPRING 2005 Productivity Reducing Costs through Productivity High productivity rates are steadily lowering unit labor costs. Real Unit Labor Costs of Entire National Economies Index (1995=100) 19951996199719981999200020012002200320042005 92 94 96 98 100 102 104 France USA Germany UK Italy Netherland s

14. 14 Productivity Industries Market Investment Incentives Contacts Trade Chemical Industry Source: VCI Industries The German Chemical Sector is Europe’s industry leader. 1995200020042005* Intra-EU Share % Intra-EU Rank Sales (billion €uro) 112.3135.0142,1148,524.3#1 Production (% change) -+4.42.5 -- Employment (in 1000) 53647044544328.4#1 Investment (billion €uro) 5.86.85.9 27.2#1 Exports (billion €uro) 63.876.699.4106.422.2#1 Imports (billion €uro) 42.052.766.870.818.7#1 R&D Expenditures (billion €uro) 5.37.17.7-21#1

15. 15 Productivity Industries Market Investment Incentives Contacts Trade Source: BITKOM Largest e-Commerce Market in Europe Industries Business to Business and Business to Customer In Billion €uro (2004) 22.3 4.0 8.6 11.9 22.6 33.3 65.3 85.7 180.3 97.7 020406080100120140160180200 Spain Italy France UK Germany B2B B2C Increasing numbers of internet users, acceptance of online payment-billing, and high online security standards promise continued e-Commerce growth.

16. 16 Productivity Industries Market Investment Incentives Contacts Trade With a share of over 20%, Germany has the largest ICT market in Europe. Information and Communications Technology Industries Source: EITO 21.2 5.2 6.1 11.0 14.9 20.4 Six Largest European ICT Markets Market Share in Percent (2004)

17. 17 Productivity Industries Market Investment Incentives Contacts Trade German vehicle production ranks #1 in Europe, and #3 in the world. Source: VDA 2004 Annual Report Vehicle Production and Export Destination Industries 10 Largest Auto Producers In Million Units (2003) 0 2 4 6 8 10 12 14 USAJapanGermanyChinaFranceSouth Korea SpainCanadaBrazilUK 5.1 3.7 3.5 3.0 2.7 2.2 1.9 5.6 12.0 10.5 Production Abroad by German Manufactures (2004) Units Y-o-Y Growth Passenger Automobiles4,220,4994.6 Commercial Vehicles587,25234.8 Total4,807,7517.6

18. 18 Productivity Industries Market Investment Incentives Contacts Trade Medium-sized defined: Less than 250 employees with a maximum annual sales of € 50 million or maximum total assets of € 43 million A large company may not hold more than a 25% share in the firm Generous incentive packages reduce investment costs in Germany. Eastern German States 28% 47% 25% 50% Western German States Grants Gov. Loans, Guaranties, and Holdings Down Payment of the Investor Large Companies may receive: grants up to 35% in Eastern Germany and up to 18 % in Western Germany For Small- and Medium-Sized Companies these packages can total up to: Investment Incentives Source: BMWA, Invest in Germany Small-sized defined: Less than 50 employees with a maximum annual sales of € 10 million or maximum total assets of € 10 million A large company must hold less than a 25% share in the investing firm Incentives

19. 19 Productivity Industries Market Investment Incentives Contacts Trade Regional Distribution of Investment Incentives Investors may profit from a variety of support programs, which vary by region. KEY Incentive Region A Incentive Region D Incentive Region B Incentive Region C 100 KM Other state and local incentives are available across all of Germany to small- and medium-sized* businesses. Source: BMWA Database Incentive Region E 0%18%28%35% Large Companies up to: 15% 7.5% 28% 43% 50% Small up to: Medium up to: DCBA Region Size of the Company 0% 15% 7.5% E Kiel Lübeck Rostock Bremen Wilhelmshaven Erfurt Potsdam Wiesbaden Kassel Heidelberg Freiburg Karlsruhe Mainz Kaiserslautern Saarbrücken Dortmund Aachen Schwerin Würzberg Osnabrück Duisburg Hamburg Dresden Leipzig Hannover Chemnitz Frankfurt Nürnberg Munich Regensburg Magdeburg Frankfurt (Oder) Bamberg Stuttgart Bonn Cologne Berlin Incentives * stipulated by the sizes of the parent company and owners’ holdings.

20. 20 Productivity Industries Market Investment Incentives Contacts Trade Global Network of Offices Your first step toward investment in Germany: www.invest-in-germany.com Contacts Head-Quarters Invest in Germany GmbH Mr. Gerhart Maier & Dr. Urda Martens-Jeebe Managing Directors Anna-Louisa-Karsch-Strasse 2 D-10178 Berlin Germany Phone: +49-30-206 570 Fax: +49-30-206 571 11 E-mail: office@invest-in-germany.com Invest in Germany LLC Mr. Michael Rassmann U.S. Representative 345 Park Avenue New York, NY 10154 USA Phone: +1-212-454-1905 Fax: +1-212-454-3220 E-mail: rassmann@invest-in-germany.com Invest in Germany LLC Mr. Kenneth Bremer U.S. Representative Central Region 200 South Wacker Drive, 3 Chicago, IL 60606 USA Phone: +1 312 596 8503 Fax: +1 312 596 8692 E-mail: bremer@invest-in-germany.com Invest in Germany LLC Ms. Angelika Geiger U.S. Representative Western Region 201 California St., Suite 450 San Francisco, CA 94111 Phone: +1 415 248-1246 Fax: +1 415 627-9169 E-Mail: geiger@invest-in-germany.com Invest in Germany Ms. Ye Tong China Representative 29 F POS Plaza 1600 Century Avenue, Pudong Shanghai, China Phone: +86-21-5081-2266 Fax: +86-21-5820-6408 E-mail: tong@invest-in-germany.com Invest in Germany Mr. Iwami Asakawa Japan Representative Sanbancho KS Bldg. 5F 2-4 Sanbancho, Chiyoda-ku 102-0075 Tokyo, Japan E-mail: asakawa@invest-in-germany.com Invest in Germany Edgar Horny South America Representative R. Verbo Divino 1488 - 3º Andar 04719-904 São Paulo-SP, Brasil Tel. +55 11 5187 5166 Fax. +55 11 5181 7013 E-mail: horny@invest-in-germany.com

21. 21 Productivity Industries Market Investment Incentives Contacts Trade Baden-Württembergwww.bw-invest.degwz@gwz.de Bavariawww.invest-in-bavaria.cominfo@invest-in-bavaria.de Berlinwww.berlin-partner.deinfo@berlin-partner.de Brandenburgwww.zab-brandenburg.deinfo@zab-brandenburg.de Bremenwww.big-bremen.commail@big-bremen.de Hamburgwww.hamburg-economy.de/info@hwf-hamburg.de Hessenwww.hessen-agentur.deinfo@ibh-hessen.de Lower-Saxonywww.ipa-niedersachsen.deinfo@ipa-niedersachsen.de Mecklenburg-Vorpommernwww.gfw-mv.cominfo@gfw-mv.de North Rhine-Westphaliawww.gfw-nrw.degfw@gfw-nrw.de Rhineland-Palatinatewww.isb.rlp.deisb-marketing@isb.rlp.de Saarlandwww.gwsaar.cominfo@gwsaar.com Saxonywww.wfs.saxony.deinfo@wfs.saxony.de Saxony-Anhaltwww.wisa.dewelcome@wisa.de Schleswig-Holsteinwww.wtsh.deinfo@wtsh.de Thuringiawww.invest-in-thueringen.orginfo@leg.thueringen.de www.iic.deinfo@iic.de State Investment Agencies As the federal investment promotion agency, Invest in Germany works closely with the 16 state business development authorities: Eastern Germany * *Industrial Investment Council Identifies business opportunities in the “New German States” for foreign investors. Contacts HAMBURG BREMEN BADEN- WÜRTTEMBERG BAVARIA SAXONY SAXONY -ANHALT SCHLESWIG- HOLSTEIN THURINGIA MECKLENBURG- VORPOMMERN HESSEN LOWER SAXONY NORTH RHINE- WESTPHALIA RHINELAND- PALATINATE BERLIN SAARLAND BRANDENBURG

22. 22 Productivity Industries Market Investment Incentives Contacts Trade Phone: +49-30-206-57-0 Fax: +49-30-206-57-111 e-Mail: office@invest-in-germany.com www.invest-in-germany.com For More Information Our web-site accesses a wide array of business information on Germany. www.invest-in-germany.com Visit Our Website for More Information Contacts