The Invest in Italy Roadshow was held on Dec. 13 to promote Japanese direct investment into Italy, organized by the Ministry of Economic Development of Italy, the Italian Trade Agency, Mitsubishi UFJ Financial Group Inc., Invitalia and the Embassy of Italy, and supported by the Japan External Trade Organization.
Dozens of Japanese business professionals looking for Italian investment opportunities attended the event and joined discussions during the symposium at the ambassador’s residence inside the Italian Embassy in Tokyo’s Minato Ward.
Speakers at the three-hour symposium included Italian Trade Agency Foreign Direct Investment Department Director Stefano Nigro; Invitalia Investor Support Manager Andrea Tabella; National Association of Italian Freight Villages President Matteo Gasparato; Port Authority President Pietro Spirito; MUFG Bank Ltd. Managing Director, Head of Italy Kaneyuki Iseda; and Daikin Europe N.V. Vice President Junji Umamoto.
The timing of the symposium is fortunate for Italy as the country could take advantage of improved business sentiment after the European Parliament approved on Dec. 12 the EU-Japan economic partnership and strategic partnership agreements, which are scheduled to enter into force Feb. 1. Tariffs and other trade and business barriers will be greatly reduced or eliminated between the two economic powers.
Opening remarks, which were simultaneously translated into Japanese, were made by Italian Ambassador to Japan Giorgio Starace.
“I’m very happy to welcome all of you to this event,” Starace said. “This type of event is one of our most important bilateral diplomatic activities and the embassy will continue to hold similar events.”
Following Starace, Under-Secretary of State for Economic Development Michele Geraci spoke to the Japanese company executives.
“Relations with Japan are very important. In terms of trade, I don’t care if there’s a surplus or deficit; the number of combined exports and imports is what’s important,” Geraci said. “These visits to Japan by Italian delegates show that Italy regards Japan as a very important partner.”
The Italian Trade Agency’s Nigro then made a presentation introducing the agency, outlining the benefits of Italy as an investment choice and providing concrete examples of sectors with promising investment potential.
His presentation began with a graph showing Italy ascending in the foreign direct investment rankings from 2016 to 2018. According to the A.T. Kearney FDI Confidence Index, Italy’s ranking was 16th in 2016, 13th in 2017 and 10th in 2018, showing that Italy is on the right track to building a solid infrastructure and the legal framework to attract foreign investments.
He went on to explain that Italy boasted competitive labor costs for high-quality workers. He also noted a survey saying that Italy is ranked No. 1 in the EU for production values in the pharmaceutical industry.
Health care in Tuscany, the digital economy and smart manufacturing in the Lombardy region and tourism-related real estate investment in Sardinia were among the examples of sectors with strong investment potential.
Next to speak was Tabella of Invitalia, the national agency for inward investment and economic development that is overseen by the Italian Ministry of Economy.
His presentation began with an explanation of Invitalia, which aims to increase Italy’s competitiveness, especially in the southern regions and support strategic sectors for development.
One of Invitalia’s activities is to provide incentives to foreign companies looking to invest in Italy. He said that projects presented by foreign companies providing a strategic investment of at least €50 million can access so-called fast-track procedures, including quicker investment approvals and ad hoc resources if necessary. Invitalia also provides subsidies for loan payments for such companies.
Other forms of incentives for foreign companies include support in searching and selecting investment locations, arranging meetings with companies that have necessary services for them and reducing time for foreign employees to acquire visas, among others.
The National Association of Italian Freight Villages’ Gasparato then discussed the excellence of the 23 “freight villages,” or local logistics centers, in Italy.
The freight villages are spread across the country, stretching from the Alps to Sicily. The villages are comprised of 1,200 transport and logistics companies and employ 20,000 people. In 2017, they processed 25,000 trucks per day, handled 65 million tons of freight and saw 50,000 trains pass through.
He noted a ranking by a German organization on logistics centers, which had Interporto Verona as the best in Europe in 2016, while seven of Italy’s freight villages were in the European top 20.
Freight villages can be a good area for Japanese companies to invest in because they are in strategic positions in Italy and Europe, and offer high levels of accessibility, he said.
Spirito of the Port Authority delivered a presentation on special economic zones, which are areas designated by the government to attract investment by offering various benefits.
He argued the creation and launch of a special economic zone is fundamentally important to stimulate the growth of an industrial and logistics hub and attract foreign direct investment.
Companies operating in special economic zones gain benefits in terms of streamlined customs processes, tax breaks, simplified administrative procedures and more. Providing local communities with stable employment, priority to access such benefits goes to companies in industries related to export, with innovative products and production processes.
MUFG Bank’s Iseda discussed Italy’s economy in general.
He noted that MUFG Bank, Invitalia and the Italian Trade Agency just signed an agreement on cooperation to promote trade between Japan and Italy.
Iseda then explained the political situation, which is much like Japan’s, in that many political parties hold parliamentary seats and the largest party in the parliament often has to create a coalition to have a stable political foundation.
He also discussed challenges facing the Italian economy. For example, the ratio of public debt to gross domestic product has been above 100 every year from at least 2009 through 2017. It was 131.2 in 2017, while EU rules stipulate that the ratio be 80 or below.
Still, he said Italy’s economic fundamentals are not so bad, pointing out that the country has had a trade surplus from 2013 to 2017 and the level of foreign exchange reserves is similar to Germany and France. Machinery is the biggest export sector in Italy, he said, even though Japanese tend to associate Italy with food and fashion.
The final speaker was Daikin’s Umamoto, who outlined Daikin Industries Ltd., which has seen increasing annual revenue since the year ended in March 2010, reaching ¥2.48 trillion in the year ending in March. The ratio of overseas revenue also grew dramatically from 46 percent in 2005 to 76 percent in 2017.
Daikin Industries, a major maker of air conditioners and various cooling equipment, has seven subsidiaries, four of which include factories, in Italy. Located near Rome, he presented the achievements of Daikin Applied Europe, which sells products to customers in Europe and the Middle East.
In 2016, Daikin Applied Europe started a new production line to make very large freezers.
“Italian engineers are hardworking and have a passion to work. I was in Italy for five years and profit was constantly increasing during that time,” he said, recommending symposium attendees to consider investing in Italy.
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