Exotic markets key to next wave of international growth

The next growth nations

MEXICO
Often seen as the poor relation in the Nafta block, the UK is a significant investor in Mexico, and was the fifth largest investor in Mexico over the period 1999–2009, behind
the US, Canada, Holland and Spain. Opportunities abound there.

The main investors today include AstraZeneca, BAT, BPAmoco, Diageo, GKN, GlaxoSmithKline, HSBC, Shell and Unilever.

What does Mexico offer? Despite its well-publicised problems with crime, internal security has improved, while investment in infrastructure has continued to grow. Indeed, recent figures from UK Trade and Invest reveal the country has committed itself, under President Calderon’s National Infrastructure Programme 2007-2012, to spend an estimated $226bn on airports, railways, ports and the road network. It is actively seeking to look beyond its trading relationship with the US to other markets, principally the Eurozone.

NIGERIA
The UK’s second largest market in sub-Saharan Africa after South Africa, Nigeria’s oil wealth and growing middle class have made it arguably the most lucrative market for UK businesses on the continent. The value of UK exports there has increased steadily from £535m in 2000 to £1.3bn in 2009. Main areas of investment are financial services, oil and gas, education, power, construction, healthcare and security.

The economy has held up well during the downturn, with one UK FD remarking recently: “Nigeria’s our biggest emerging market because there’s no consumer credit there. As a result, there’s been no issue in the recession. The debt issue is much less of a worry in those markets, so we can exploit it.”

The UK is one of the largest investors in Nigeria, with cumulative investment of several
billion pounds by Shell, British Gas and Centrica in the oil and gas sector.

Other large British companies active in Nigeria include Guinness, Unilever, PZ Cussons, AstraZeneca, Cadbury, BAT, GlaxoSmithKline, JCB, Jaguar, British Airways and Virgin Atlantic.

INDONESIA
As international pressure makes headway on human rights abuse issues, Indonesia’s population is growing in wealth and offers enormous opportunities for UK businesses. Educational standards are improving and with that comes a growing middle class. Indonesia has also recently liberalised its trading arrangements.

According to the Foreign and Commonwealth Office, many large UK businesses have tapped into the Indonesian success story, including Unilever, Jardine Matheson Group, Standard Chartered Bank, Premier Oil and BAT.

Real GDP grew by 6.1 percent in 2008, pushing the country into a leading position in south-east Asian markets and the government has welcomed investment from Europe.