Philippe Suinen, CEO of the Wallonia Foreign Trade and Investment Agency (AWEX), speaks on the rise of Wallonia as a destination for Foreign Direct Investment (FDI) by Indian investors and the role of AWEX in attracting businesses.
What is Wallonia doing right in attracting FDI?
There are several ways to convince foreign investors to set up their activities in Western Europe and especially in Wallonia. Assets are the first point. According to Cushman and Wakefield, Wallonia is number one amongst the most interesting European locations to operate distribution centres due to its very central location: it is the only region in Western Europe from where you can reach two-thirds of the EU market in less than one day by truck.
A positive partnership binding all local partners involved in attracting foreign companies under the leadership of Wallonia Export and Investment Agency (Awex), the regional agency in charge of foreign investors, is another asset. It provides tailor‐made packages for all investors, including incentives for economic investments, incentives for applied research and training, Notional Interest Deduction benefit and many other special tax vehicles.
There are also excellent partnership opportunities because Wallonia has organised its sectors of excellence in the framework of ‘mega clusters’ called ‘competitiveness clusters’. The competitiveness poles cover five large specific areas: aerospace activities, life sciences and pharmaceutical activities, mechanical engineering, logistics and transportation, and agro‐food business. A sixth mega cluster born a few weeks ago covers the field of green and sustainable technologies. This policy gives potential partners the opportunity to be involved, for instance, in EU research programmes and in the international markets. These clusters are built around the magic golden triangle involving enterprises, universities with R&D centres and training institutions (skill centres and governmental bodies responsible for job training).
Moreover, there is the red carpet service that our Agency offers to our potential Indian investors through its unique feature : “The India Welcome Office”, a business incubator providing soft landing incubation services to Indian investors, absolutely FREE of charge, for up to 6 months. The incubator is conveniently located in the centre of Liège, the economic power house of the region, with easy access to Germany, The Netherlands and France.
Lastly, we provide a very intensive after-sales service to our clients. Each year, our teams pay a visit to existing investors, to see how things are going and what can we do for them, so that we can also assist the investors in extending their investments. It is very significant, because these investment expansions are a vibrant sign that foreign companies trust Wallonia.
When we look at Belgium as a whole, could we say that the growth rate is higher in Wallonia than in the other regions?
Our interest, of course, is that all three Belgian regions are wealthy. The Flemish and Brussels economies are also the first markets for our companies. In Wallonia, for more than 20 years, we have given priority to internationalisation i.e. exports, FDI, regional airports, and applied research. In the last three years, following recent studies conducted by Ernst & Young and IBM Consulting, we can see a real change in foreign investment and recovery of our true market share within Belgium. It is the opposite of the old image of the industrial sectors (steel and glass, for instance). Wallonia hosts a lot of hidden champions which are now producing new materials, because there is a high rate of diversification at the end of the process. This is largely the product of both, the entrepreneurial investments made by the region, and the continuous policy to sustain a high level of applied research in the enterprises. We are now busy with the initial implementations of an ambitious programme called ‘Creative Wallonia’. This framework programme provides the opportunity for people from different sectors to work together and to develop new channels of innovation. One of the new projects is to create incubators for our universities abroad in order to help them market their technologies.
In your opinion, what are Indian companies looking for that Belgium and specifically Wallonia is able to provide?
Indian companies are looking for a stable and business-friendly environment where they can get down to business immediately. They want return on their investment without having to waste time on administrative and local issues. Moreover they want to feel at home in a foreign country.
The government of Wallonia, through AWEX, offers preferential treatment to all investors. Once an Indian company decides to invest in Wallonia, it becomes automatically one of our own companies. AWEX will not only help it to cut through the red-tape, but will also assist it in completing various formalities and will provide it with any information that would help it to establish its business. In short, AWEX becomes the new company's guide. Our services are offered free of charge and our officers are fully accessible. With the advent of "The India Welcome Office" at Liège, Wallonia is pulling all stops to provide the Indian companies with a local community atmosphere. This business centre is looked after by local Indian staff that speaks Indian languages. Every effort is taken to not only help settle the company but also to make the company's representative and the accompanying family comfortable.
Another important trump card of Belgium is its intelligent fiscal system, designed to keep the global taxation level at a minimum and allow a tax friendly repatriation of profits.
Last but not least, our region has one of the most generous policies within the European Union regarding investment grants and subsidies.
Do you make any specific efforts towards potential Indian investors? And how do you communicate your strengths to corporate India?
As already mentioned, the "The India Welcome Office" in Liège is designed specifically to attract Indian companies. Another major step taken recently is a dedicated branding campaign through a trio of new media focusing on India: the present Awex website for India, our new promotional magazine "The Wallonia Patrika” designed exclusively for an Indian audience, and a Wallonia dedicated branding ad that will be advertised in local financial newspapers and business magazines. I would like to add a third element : the “India WalloniaTech programme”. The goal of this unique programme is to identify the brightest entrepreneurial talent in India and connect these entrepreneurs with investors and strategic partners in Belgium and Europe in order to turn their innovations into a global success. A dozen innovative Indian enterprises with groundbreaking technologies have already been identified and invited to a "commercialisation and investment forum” in Wallonia at the end of August 2011, where they have had the opportunity to present their business plan to an audience composed of public and private venture capitalists and technical partners. There was such an enthusiasm for this programme that we have decided to conduct it again and even expand it in 2012. And of course, in 2011 and 2012 we will continue our efforts to promote FDI from India through a series of “Invest in Wallonia” road shows. These road-shows will be held in major financial hubs of India to bring Wallonia to the fore-front of the Indian business community and make it aware of the attractive investment opportunities that exist in our region.
Indian FDI to Europe has been growing in the past few years. How successful have you been in attracting Indian companies ?
Belgium has steadily become one of India’s most preferred EU investment destinations outside the UK, as a platform for operations of Indian companies on the European continent. There are over 75 Indian establishments in Belgium, totalling over 1.2 billion EUR. In 2010, Belgium attracted a dozen new Indian Investment projects, bringing India to the fore as the leading source for Asian FDI in Belgium. Indian investment is seen in many sectors, including ICT, Pharmaceuticals, Transport and Machinery and equipment. Moreover most major Indian banks have operations in Belgium, attributable inter alia to the diamond trade.
How many Indian investments that are in the pipeline are you dealing with at the moment ?
In the pending files, we are presently dealing with a handful of important potential investors from India, in addition to a dozen young Indian innovators selected in the “India WalloniaTech Programme”. So we are reasonably optimistic even though we want to be careful when we call a file “in the pipeline”. We know that nothing should ever be taken for granted.