1. This project is financed by the European Union 1 The project is implemented by a European Profiles S.A. led consortium Second cycle of Training of Trainers “Attracting Foreign Investments” Davide Branco, MSc Tashkent, Uzbekistan 7 th November 2014

2. This project is financed by the European Union 2 The project is implemented by a European Profiles S.A. led consortium FDI: Always needed?? FDI: Foreign Direct Investment Remember the seminar on Globalization; we refer to 3 Stage of Development, the “Integration”; from the point of view of Foreign Investors Importing foreign products in your Country, produced elsewere and with the profit which goes to foreign investors, is a a positive investment for your Country? Please discuss..

3. This project is financed by the European Union 3 The project is implemented by a European Profiles S.A. led consortium 3 rd Stage of Development: Integration The Foreign Enterprise integrate its direct presence into the Country/Markets Moves part or all production (and services) abroad, by licensing, assembling, manufacturing, copyrights, wholly owned, joint ventures,.. Enter directly the local distribution with its own distribution network or acquires (M&A) existing distribution channels (networks) WHAT IS FDI USEFULL FOR US??...discuss..

4. This project is financed by the European Union 4 The project is implemented by a European Profiles S.A. led consortium KEY POINT : the foreign investors play the game; the ones who does professionaly scouting for foreign direct investment areas do compare between different Country options (remember the table: How to select the Countries?..); so, they have an idea about where and how to invest..

5. This project is financed by the European Union 5 The project is implemented by a European Profiles S.A. led consortium Countries’ Evaluation Format-Step 1 ABCDFHJK WeightCountry 1Country 2Country X CriteriaTypex YOUPoints Rank SLEPT(+/-)(%, 1-5)(1-5) 1 F1xD1 2 3 4 5 6 7 8 9 10 100 or 50Tot.1, max 250Tot.2, max 250Tot.X, max 250

6. This project is financed by the European Union 6 The project is implemented by a European Profiles S.A. led consortium KEY POINT : the foreign investors know your Country and its characteristics, but sometimes those could be wrong, open to sterotypes and pre-conditions; look at your Country with the eyes of a potential foreign investors, according to the Country it comes from…(remeber Culture Management)..

7. This project is financed by the European Union 7 The project is implemented by a European Profiles S.A. led consortium KEY POINT : the FDI are long time investments (scenario planning) and require a “favourable business environment” to attract the most profitable for your Country; the less “business favourable environment” the less the positive impact on your Country (exogeneous situation); foreign speculators go to Countries where business environment is unfavourable (remember SLEPT)…

8. This project is financed by the European Union 8 The project is implemented by a European Profiles S.A. led consortium Scenario Planning Building possible views of the future for an organization by grouping Key Environmental & Change Drivers influences under an high level of uncertainty Long-Term View (5 Years min) Few Key Success Factors High Uncertainty Level

9. This project is financed by the European Union 9 The project is implemented by a European Profiles S.A. led consortium A B C D low uncertainty high HIGHIMPACTLOwHIGHIMPACTLOw

10. This project is financed by the European Union 10 The project is implemented by a European Profiles S.A. led consortium STEPS: 1. Identifying Key Forces (eg. from SLEPT List) few Key Forces with Greatest Impact and High Uncertainty 2. Building Scenarios: Low Number of Factors: combining different scenarios by using predictable future conditions Large Number of Factors: evaluation based on predictable conditions gives no help

11. This project is financed by the European Union 11 The project is implemented by a European Profiles S.A. led consortium S.L.E.P.T. S ocial L egal E conomical P olitical T echnological

12. This project is financed by the European Union 12 The project is implemented by a European Profiles S.A. led consortium Political Environmental Attitude Entrepreneurial Attitude Taxation Policy Foreign Trade Regulations Employment Services Government Stability..................... Economic GNP Trends Interest Rates Money Supply Inflation Rate Unemplyment Disposable Income Energy Avalibility & Cost............ Socio-cultural Demographiy Income Distribution Social Mobility Lifestyle changes Attitude to Work & Leisure Consumerism Educational Level......................... Technological Government & Research Government & Technology Industry & Technology New Discoveries Transfer Technology Speed Rate of Obsolescence....................... S.L.E.P.T. Legal Monopolies Legislation Environmental Laws Employment Law Taxation Law Consumer Law Commercial Law.........................

13. This project is financed by the European Union 13 The project is implemented by a European Profiles S.A. led consortium So, first Self-Questions Why we need foreign investors? What we could offer to foreign investors? What the foreign investors could offer to us? Which foreign Countries to be Targeted? How much the FDI would costs us?

14. This project is financed by the European Union 14 The project is implemented by a European Profiles S.A. led consortium SLEPT is also for you; you must know about the Countries where the potential investors are coming from!!!!!...Would you sell/co-invest to/with someone you have no idea about the Country it is coming from..??? Only unprofessional and naive people do this!!

15. This project is financed by the European Union 15 The project is implemented by a European Profiles S.A. led consortium The 1° Golden Question… Why we need foreign investors? WS:Divide in groups and take 10’ to discuss...

16. This project is financed by the European Union 16 The project is implemented by a European Profiles S.A. led consortium The 2° Golden Question… What we could offer to foreign investors (HR, R&D, Labour Force, Natural Resources, Incentives, Strategic Location, Trade Benefits...? WS:Divide in groups and take 10’ to discuss...

17. This project is financed by the European Union 17 The project is implemented by a European Profiles S.A. led consortium The 3° Golden Question… What the foreign investors could offer to us (profits, employment, competences, R&D, improve your competitiveness......)? WS:Divide in groups and take 10’ to discuss...

18. This project is financed by the European Union 18 The project is implemented by a European Profiles S.A. led consortium The 4° Golden Question… Which foreign Countries to be Targeted (culture, religion, bilateral agreements, logistic, matching type of products......? WS:Divide in groups and take 10’ to discuss...

19. This project is financed by the European Union 19 The project is implemented by a European Profiles S.A. led consortium The 5° Golden Question… How much the FDI would costs us (do we need additional HR, offices, R&D,..)? WS:Divide in groups and take 10’ to discuss...

20. This project is financed by the European Union 20 The project is implemented by a European Profiles S.A. led consortium A set of general rules.. Who behaves ethically attract ethical Partners Ethical Partners are the most effective and profitable Good behaviour = good partners (Siemens…) Bad behaviour = bad partner (Speculators..) Ethical+Good behaviour = long term relationship Non-ethical+Bad behaviour = short term relationship Long relationship = high positive impact on SLEPT Short relationship = speculation…

21. This project is financed by the European Union 21 The project is implemented by a European Profiles S.A. led consortium The “Investment Marketing” KEEP IN MIND that even when designing an Investment proposal you must apply “marketing” tools & techniqes to: Evaluate potential foreign investors needs & expectations Assess what the potential foreign investors knows about you and how you can communicate Assess your costs to attract potential foreign investor and evaluate benefits Compare your investment proposal by keeping in account other Countries’ proposals

22. This project is financed by the European Union 22 The project is implemented by a European Profiles S.A. led consortium Key Point THERE IS NOT A STANDARD INVESTMENT PROPOSAL BUT A FOREIGN INVESTOR’S NEEDS BASED PROPOSAL!!!!

23. This project is financed by the European Union 23 The project is implemented by a European Profiles S.A. led consortium Key Point THERE IS NONE WHO CAN OFFER EVERYTHING; FOR EACH INVESTOR’S PRODUCTION THERE ARE SUITABLE SERVICES AND PRODUCTS….!!

24. This project is financed by the European Union 24 The project is implemented by a European Profiles S.A. led consortium Investment Proposal FOREWORD (short, just to catch the attention of the potentail investor on your invetsment proposal) INTRODUCION (to describe what the offer is about and how is structured; again short) COUNTRY DESCRIPTION (SLEPT of Uzbekistan, to give first and correct info about the Country, focusing on benefits for investors according to their needs) LOCAL DESCRIPTION (SLEPT of Region/District/Area where you are located and specific benefits..)

25. This project is financed by the European Union 25 The project is implemented by a European Profiles S.A. led consortium DESCRIPTION OF YOUR COMPANY (to describe mainly your strenghts, your capability, your professionalism, your technical skills, the HR skills and competences, Certification gained, previous experiences, etc…) WHAT WE OFFER (short listing of what you can offer to the potential foreign investor at macro and micro level: from The Country to Your Company..compare your offering benefits with potential competiting Countries/Regions..) TECHNICAL PROPOSAL (if you got a specific request..) BUSINESS PLANNING (if you prepared a Technical Proposal) CONCLUSION EACH INVESTOR = ITS TAILORED PROPOSAL!!!

26. This project is financed by the European Union 26 The project is implemented by a European Profiles S.A. led consortium WS: divide in groups, decide which type of company you are (characteristics, size, etc), and suppose you are presenting your investment proposal to investors (SLEPT,Culture Management and describe the Investors’ profile shortly: production, size, needs etc..) coming from (select 1): Turkey Greece Italy Great Britain Sweden USA TIME: 1 hour (you can surf internet and various sources for SLEPT etc…)

27. This project is financed by the European Union 27 The project is implemented by a European Profiles S.A. led consortium Feed-Back Present the investment proposal to the Audience Allow time for questions and answers Refine the Investments proposals Final discussion and revision

28. This project is financed by the European Union 28 The project is implemented by a European Profiles S.A. led consortium THANKS FOR ATTENTION GIVEN DURING THOSE 3 DAYS TOGETHER…