Germany seeking new partners in Asia

Germany seeking new partners in Asia

The following article is based on a report from a visit to
Germany by 11 Asian journalists including one from The Jakarta
Post.

By Oei Eng Goan

HAMBURG, Germany (JP): Although markets of preference for most
German enterprises are member countries of the European Union,
German companies could not but turn their keen eyes on the huge
potential and business opportunities Asia offers.

More than 10 percent of total German exports are absorbed by
Asian countries, and the Bonn government has put greater emphasis
on the growing importance of countries in this most populous
continent since it adopted a new policy on Asia in early 1994.

"As an export-dependent nation, we must be involved in Asia's
dynamic markets through trade and investments. Economic rivalry
with Asia and our response to the region's economic power and
success are a major test for our business community's ability and
for government policy," Chancellor Helmut Kohl said in 1993 after
visiting India, Singapore, Indonesia, Japan and South Korea.

Kohl's visit was followed by a conference of German
ambassadors stationed in the Asia-Pacific region in 1994. The
conference, held in Bonn and concluded with a 10-point "Concept
on Asia", aims at forging closer ties in all spheres with Asian
countries, particularly with the seven-member countries of the
Association of Southeast Asian Nations (ASEAN).

And the new policy bore fruit.

"For the first time, in 1994, Germany enjoyed a small surplus
of around DM 328 million in its trade with ASEAN," an official of
the Federal Ministry of Economics told The Jakarta Post last
month.

Data from the ministry shows that German exports to ASEAN
countries last year totaled DM 20.56 billion (US$13.90 billion)
against imports of DM 17.18 billion, giving Germany a surplus of
DM 3.38 billion, 10 times greater than it was in 1994.

Excluding ASEAN, Germany's total exports to Asia last year
increased by 8.4 percent to DM 57.50 billion from 53.06 billion
in 1994. Its Asian imports also increased to DM 76 billion in
1995 from 73.30 billion the year before.

Obviously, the German business community has responded deftly
to Kohl's challenges. Germany's enthusiasm for Asian markets and
trade partners, however, have upset other countries outside Asia.

"We are blamed, from time to time, by Africa and Latin America
that we do not concentrate that much (on their regions) as we do
on the Asia-Pacific region," Jurgen Staks, head of the Federal
Foreign Office's Southeast Asia office, told the Post last month.

As a result of their aggressive business campaign, a number of
German enterprises have won major contracts in Asia as well as
found partners for joint ventures.

Reimelt, an engineering and construction company, has built
part of the Mayora plant, an Indonesian biscuit factory in
Tangerang, some 25 kilometers west of Jakarta. A privately-owned
enterprise, Reimelt also supplies spare parts and flour silos for
food processing plants worldwide.

According to Reimelt's marketing executive, Gunter Holle, the
company is also negotiating with Indofood, a large corporation
owned by Indonesian business tycoon Sudono Salim, for the
construction of an integrated food processing plant in Indonesia.

Jakarta, meanwhile, has accorded a contract worth more than DM
500 million to Germany's Siemens to build a telecommunications
network in eastern Indonesia, according to the latest news
report.

Apart from this, Germany's integrated transportation company,
ADtranz, which was set up in January of this year after a merger
between AEG and ABB Daimler-Benz, will supply an automated light-
rail system to Singapore and Malaysia, electric locomotives to
India, and has established its first joint venture in China where
some 8,100 kilometers of new track will be built up to the year
2000.

Behind this success story, however, the Bonn government also
seeks and encourages foreign investors to join its ventures in
developing eastern Germany.

As Chancellor Kohl put it: "Investments should not be heading
only in one direction. It is important that we, in turn, present
Germany -- especially in the new federal states -- to Asia as an
investment location of the future."

For six years now, since the unification between West and East
Germany in October 1990, the federal government has transferred
DM 150 billion annually to help recover the economy of former
Stalinist-style German Democratic Republic. Unemployment,
following the closures of many east German industries, is another
problem that has to be coped with.

Although widely known for its high labor costs, Germany's
reputed infrastructure, efficient traffic network and strategic
location still offers a competitive edge to foreign investors.

"Several Japanese computer manufacturing firms have started
investing in Thuringia," said Walter Link, the state secretary of
Thuringia Lander, the fastest growing region of all five German
new federal states which is home to Opel car producer and Zeiss
optics industry.

To help boost business activities in eastern Germany, the
German government has also built a DM 1.33 billion trade
exhibition center in Leipzig, a former German Democratic Republic
city. The imposing glass and steel structure of the exhibition
hall, built on an area of 20,500 square meters, was opened only
last April.

All this, evidently, is only part of Germany's drive to lure
more and more investors to the country whose "Made in Germany"
high-quality products have been known worldwide.