World Reports, Site Selection Magazine, January 2003

Survey Says European Companies
Prefer
Switzerland as Headquarters Site

Dr. Herbert Wanner

A recent Arthur D. Little survey indicates European companies consider Switzerland to be the most attractive place for global headquarters location in Europe. The study also found that headquarters are getting smaller and are increasingly focused on creating value for business units.

       
Switzerland was the choice of 55 percent of companies, followed by the U.K. with 16 percent, Belgium with 7 percent, Denmark with 3 percent and France, 3 percent.

       
Dr. Herbert Wanner of Arthur D. Little’s Switzerland office conducted the survey of 50 companies which had relocated their headquarters. He says as companies go to smaller headquarters, they downsize employees, delegate responsibilities to business units, outsource some activities, reduce the number of management levels and create shared service units. Headquarters philosophy has shifted from command and control to value creation, he says.

       
The survey finds the top 10 criteria for selection of headquarters location, ranked by percentage of respondents citing them, are:

The canton of Zug is considered one of the most desirable regions of Switzerland for headquarters location due to its relatively low taxes.

       
Wanner says the top five cantons in Switzerland for headquarters location are Geneva, Neuchatel, Vaud, Zug and Zurich. All of these cantons have relatively low corporate tax rates, ranging from 5.8 percent in Neuchatel to 9.9 percent in Geneva.

If a company puts a high priority on low taxes, tolerates the countryside and accepts the distance to Zurich and the airport (45-60 minutes), then Zug is the optimal location,

Wanner explains.

If a company prefers an international environment in a large city and accepts higher taxes, then Geneva is the best location.

       
Microlife Ltd. is one company to recently expand a small presence in Switzerland to a new headquarters location. The company is locating its headquarters for Europe and Africa in the canton of St. Gallen. The world’s largest manufacturer of digital thermometers and a leader in other home diagnostic products, Microlife will employ 25 at the facility, which will also house its global marketing activities.

       
Morton Brunvoli, Microlife’s head of global marketing, cites three reasons for selecting the Rhine Valley of Switzerland.

We can rely on a large number of well-trained professionals, reliable suppliers and partners,

he says.

Also, we’re a multicultural organization. We have R&D in Asia, the U.S. and Europe, manufacturing in China, the home office in Taiwan and global marketing in Europe. The Rhine Valley is a down-to-earth region. Microlife is a realistic company. Our products combine high reliability with direct benefit for users. The Rhine Valley has little use for voodoo economics and that sits well with us.

       
Another recent move to the land of precision instruments is Bulova Corp., which opened a new European headquarters in Fribourg. The office will be responsible for all sales, marketing and distribution in Europe.

       
Carl E. Rosen, Bulova’s New York?based senior vice president, international, says the move to Switzerland is part of Bulova’s comprehensive international operating strategy to enhance its global positioning while protecting the integrity of the Bulova name.

Switzerland, a country synonymous with precision timekeeping, is an ideal location from which we can exercise control over development and marketing worldwide to ensure product quality and sharpen global brand awareness,

he says.

Technology Parks Take Hold in Spain

Science and technology parks continue to proliferate in Spain, according to information from the Spanish Institute for Foreign Trade. Twenty-nine new parks are currently under construction, representing a total investment of 575 million euros (US$576.4 million). Much of the investment goes toward laying of fiber-optic networks.

       
The number of companies located in Spain’s existing dozen parks has increased significantly in recent years. At the end of 2001, 1,080 firms and institutions were using them as their business location, 11.9 percent more than a year earlier. Total jobs reached 29,036 with 50 percent being university graduates. The financial turnover of companies in technology parks reached nearly 3.8 billion euros during 2001.

       
The success of the first technology parks has encouraged universities and local councils to promote them. Thus far, 45 universities are collaborating with complexes that have been built or are under construction.

       
In recent years, Spain’s technology parks have attracted multinational companies to set up shop. Examples include Finland’s Nokia, which established operations at the Parque Tecnologico de Andalucia, and Ericsson and Vodafone, which have located divisions in the technology parks of Vizcaya and Castilla y Leon, respectively.

Also in the works for PSA Peugeot Citroen is a new design center at the company’s Paris headquarters.

Peugeot Rolling On Major Construction Spree

PSA Peugeot Citroën, the second largest European automaker and the sixth largest in the world, has announced major construction projects around the globe over the past year. First was the groundbreaking for the joint venture plant with Toyota in Kolin, Czech Republic, in January 2002. In March, the French carmaker opened a new engine factory in Porto Real, Brazil.

       
In October, the company agreed to an extension of its joint venture in China with the Dong Feng Group that will see increased production at its Wuhan plant by 2004, and a combined investment from both companies of US$121 million. PSA Peugeot Citroën, which employs more than 192,000 in 50 plants worldwide, also announced it will choose a site early in 2003 for a new assembly plant in Central Europe to provide additional production capacity beyond 2006. The 700-million-euro ($701.7 million) plant will have a minimum production capacity of 300,000 vehicles per year. Sites in Poland, the Czech Republic, Hungary and Slovakia are reportedly in the running. These countries have wages as low as one-fifth those in Western Europe.

Also in the works for PSA Peugeot Citroen is a new design center at the company’s Paris headquarters.

Research Firm Says
Australia
Set For Construction Boom

Australian research and consulting firm BIS Shrapnel projects that Australia’s construction industry will boom over the next few years. BIS predicts a peak of US$24.3 billion (AUS$43 billion) in 2005-2006

prior to a slump produced by rising interest rates. In its annual Building in Australia study, BIS also predicts office building starts to rise in 2006-2007 as a result of tightening supply and rising rentals. BIS expects industrial construction to peak in 2005-2006.