Spain

Putting Galicia on the map

The Galician Institute of Economic Promotion (IGAPE) is the Regional Development Agency of Galicia responsible for attracting new direct investment

This Regional Development Agency provides information, help and assistance to businesses at all stages of their development and has several support programmes specifically designed to improve companies performance. The IGAPE, together with other regional institutions and the central government, is also the main source of help with new viable investment projects. This aid includes grants and nonrecoverable funding, risk capital and attractive loans: a package, which undoubtedly constitutes one of the best financial offers to investors in any European region.Galicia forms one of Spain’s 17 autonomous communities and is situated on the northwest coast of the Iberian Peninsula: to the south it borders Portugal, to the west the Atlantic Ocean, to the north the Bay of Biscay and to the east the Spanish mainland. Spain has a population of 41 million and is one of the 25 member states of the European Union, which has a total population of more than 550 million with high purchasing power.

Social and economic characteristics

Area: 11,419 square miles (29,574 km²). Similar to Belgium, Israel, Taiwan or Massachusetts.

Population: 2,737,370.

Population density: 240 per square mile (93 per km²).

Main cities (pop.): A Coruña 242,458; Lugo 89,509; Pontevedra 76,798; Vigo 288,324; Ferrol 79,520; Ourense 109,011; Santiago de Compostela 93,273.

Oficial languages: Galician and Spanish. Both languages enjoy peaceful coexistence among a population equally at ease with either. In addition, the close similarity of Galician to Portuguese enables us to communicate with the nearly 200 million strong international Portuguese-speaking community.

Economic structure

Employed Population: Year 2005. Total employed population: 1,130,100

Unemployment Rate: The mean annual unemployment rate in 2004 was 13.5%. The highest rate of unemployment is among young people, the population group with the highest level of training. The availability of labour is obvious and is being reinforced by immigration of descendents of Galician emigrants from Latin America and Europe.

Changes in GD P Galicia–Spain–European Union: The tendency of the last few years shows that Galicia, as well as Spain, is in a process of convergence with European levels. The mean cumulative inter-annual growth rate of GDP stood at 3.4%, similar to that of Spain, and almost two points above that of the European Union.

GVA distribution for Galicia in 1995 and 2004: A comparison of the distribution by sector of GVA in Galicia for the years 1995 and 2004 highlights the increasing share of the industrial sector, which registered a growth of 6 points.

Changes in industrial GVA rates for Galicia and Spain: The inter-annual rate of variation in industrial GVA confirms the dynamic nature of Galician industry with an average annual growth at 2.5% above the Spanish average for the period 1997-2004.

Main sectors of production

FOOD AND AGRICULTURE : The Galician climate itself forms the productive basis for a modern cattle and farming industry, whose products are prepared and marketed — the majority under the logo “Galicia Quality” — by a cutting-edge industry financed by local, national and international capital; there are still many niches in this area just waiting to be exploited.

FISHING AND AQUACULTURE : A fully equipped, modern fishing fleet, built in our own shipyards and with our own technology, is the foundation of our fishing industry, which spreads its nets over the seven seas, and is also a source of an increasingly internationalised fish canning industry, international with regard to both the catching and the canning. The production of shellfish and aquaculture is boosted and supported by the existence of truly magnificent research and investigation centres. The sustainability of this sector is assured by the opening of new fishing grounds and marine products, which provide important investment opportunities.

NON METALLIC MINERALS: The quarrying and processing of non-metallic minerals such as granite, slate and quartz makes a significant contribution to the Galician economy. This sector is completely up to date with the latest developments in technology and marketing, and is continually seeking new mineral deposits throughout Galicia.

ENERGY: Hydroelectric plants, thermal power stations and wind-farms have helped provide Galicia with an energy surplus in this sector, in which wind farms and an as-yet embryonic ecological initiative have particularly boosted growth. Numerous investment opportunities exist in both these energy sources.

FORESTRY AND TIMBER: The excellent natural conditions of Galicia enable timber yields up to 10 times higher than that of other European timber exporting countries. This sector is extremely competitive in international markets and benefits from the proximity of its prime material and from technological backup. The main products are cellulose, paper, chipboard and sawdust, with many end-product niches still remaining in this sector.

TEXTILES AND FASHION: The Galician textile and clothing sector leads the field in Spain and is also an important reference point for international markets. Textile and fashion are strategically linked through the latest technology and distribution networks to ensure immediate response to market demands. Galicia is the ideal location for fashion and design companies in the middle to up-market range.

AUTO MOBILE AND COMPONENTS: The car manufacturing industry ranks among the leaders in the export-ranking table. Heavy investment in research and industrial design, the introduction of cutting-edge production technology, the availability of a highly skilled workforce and the development of a cluster policy, headed by Citroën, have all helped to make this sector one of the most dynamic in all Galicia. Each year sees new investment in this area.

SHIPBUILDING: The Galician shipbuilding industry represents an indisputable reference point for the international community and has always been the backbone of our maritime tradition. Galician shipyards are prepared for all kinds of craft including fishing boats, pleasure craft, off-shore platforms and warships.

TOURIS M AND LEISURE: Quality alternative tourism with a difference is our hallmark. The natural beauty of the landscape, its cultural heritage, its gastronomic wealth, installations for maritime and water sports, golf, hunting, fishing, skiing and hiking have made Galicia into a national and international tourist destination point. Whatever form of tourism you seek, cultural or rural, spas and hot springs or sites for congresses and conventions, this Atlantic region can provide the ideal infrastructure

CALL CENTRES: Galicia offers investors in this sector a complete telecommunications network with modern offices at prices much lower than those of other cities such as Madrid or Barcelona, plus a bilingual workforce, many of whom are returned descendents of Galician emigrants to other European countries. An additional bonus is the local presence of panish/Portuguese bilinguals and a workforce skilled in computer technology. These advantages have already attracted several foreign companies to this sector in the last two years.

BIOTECHNOLOGY: This area is creating important developments in health-related industries and is involved in research into treating diseases such as cancer with therapeutic marine products. A very highly qualified workforce and an equally high level of technology, which has aroused the interest of foreign investors, back up the sector.

Reasons for investing in Galicia

The labour market has a keen competitive edge, not only because of its low cost, but also due to the high productivity and skills of its workforce. Within Spain, the Autonomous Region of Galicia is among those with the lowest labour costs, approximately 86% of the national average. At an international level, the comparison of labour costs with other countries in our sphere of competition reveals even greater advantages for those companies established in Galicia. The productivity of the Galician economy continues to improve as a more and more highly qualified and committed young labour force enters the production system. A clear example of this productivity is the automotive industry, where the PSA Peugeot Citroën plant in Vigo ranks fourth in a survey of the 43 most important car assembly plants in Europe, published by World Markets Automotive. Also, the German consultancy, Roland Berger, described Galicia’s performance in this sector, as “an island of excellence”.

The present educational system in Galicia offers more than 400,000 non-university places. These include 214 vocational training centres giving instruction in a variety of specialities to some 40,600 apprentices. Three universities, Santiago, A Coruña and Vigo, together with their campuses in Lugo, Ferrol, Ourense and Pontevedra, offer university places to a total of 92,329 students, covering a wide range of degrees and diplomas in diverse technical fields and the humanities. Training in modern languages, hotel and catering and business studies complete the picture There are a variety of Research and Development centres in Galicia among which the following are particularly noteworthy: Centre for Design and Technology (CIS-Centre of Innovation and Service), Centre of Innovation and Timber Technology Service (CIS-Timber), Maritime Technology Centre, Granite and Slate Technology Centre, Galician Supercomputation Centre, Galician Automation Centre and a Metrology Laboratory. Many companies co-operate on research projects in these organisations and also in others run by universities.

Foreign trade

The last 12 years have seen a steady increase in Galician exports with an average year-on-year increase of 16%, exceeding by four points that of Spain. In 2004, the value of exports reached e10,459.80 million, with imports at e10,950.36. The Galician share of the Spanish export market rose steadily from 4.75% in 1990 to 7.14% in 2004, representing a higher rate than that of the corresponding imports.

Foreign investment

Many national and foreign companies have chosen Galicia as a target for investment. Leading sectors for this investment include: automotive, manufacturing, food and agriculture, mining and quarrying, call centres, aeronautics, leisure, biotechnology and pharmaceuticals. Most foreign investment comes from countries of the European Union, the United States, Canada, Japan and Korea. Foreign investment made by Galician companies, mainly in real estate, is also noteworthy.

Investment help schemes

Galicia is catalogued as Objective Area One by the European Union, thus making it eligible for the concession of non-recoverable funding for investments of up to 40% of the subsidisable investment.

The IGAPE, as the Regional Development Agency of Galicia, is the institution in charge of channelling most of this aid to the investment opportunities in our autonomous community As a result of the accident involving the petrol tanker Prestige in November 2002, and with the clear objective of alleviating the negative effects of the disaster, the IGAPE, together with the Ministry of Economy, are prepared to offer companies monetary aid especially designed for projects which generate employment in Galicia, and require an investment of more than e600,00.

Three areas of action are planned:

• The Costa da Morte (Coast of Death): A guaranteed minimum subsidy of 35% of the subsidisable investment for municipalities within the boundaries of the Costa da Morte.
• Priority areas in Lugo and Ourense: A guaranteed minimum subsidy of 30% of the subsidisable investment for those projects deemed to have a boosting effect and which create employment in certain municipalities in these provinces.
• The rest of Galicia: For the rest of Galicia, a guaranteed percentage rise in aid for those schemes deemed to have an economic boosting on the area.

 

Contact: Instituto Gallego de Promoción Económica (IGAPE), Complejo Administrativo San Lázaro, Santiago de Compostela 15703 (A Coruña). Spain Tel: +34 981 541162 +34981 541173 +34981-541112 +34981 541126 - Fax: +34 981 541114 - E-Mail: promocion@igape.es or lys@igape.es

 

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