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Country Commercial Guides FY 2000: Denmark Report prepared by U.S. Embassy Copenhagen, released July 1999 Note*

V. LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENTS

A. Best Prospects for Non-Agricultural Goods and Services

1. Computer Software (CSF) Narrative: Denmark is a highly computerized society with a large and steady demand for software. The total market reached USD 1.61 billion in 1998, and the market is estimated to increase moderately during 1999 and 2000. U.S. suppliers are increasing their share of imports from USD 380 million in 1998, to an estimated USD 400 million in 1999. Local software producers are quite successful, but are often lacking the resources necessary for continued growth on their own. They are therefore increasingly being acquired or subjected to control by foreign system vendors, most often from the United States. Thus, neither local production nor third country suppliers appear likely to threaten the dominant position that U.S.-brand software has in this market. New-to-market companies will face serious competition from long-established U.S. companies. In a market with few independent importing agents and distributors, new-to-market companies should be prepared to establish a wholly-owned subsidiary or sales office in country.

Data: ($ millions)		 1998		 1999		 2000
Total Market Size       	1,610		1,620		1,640
Local Production		  600		  560		  550
Total Exports			   290		  250		  240
Total Imports		    	 1,300  	1,310		1,330
Imports from the U.S.	 	  380		  400		  425
Exchange Rate	(1USD=DKK)   	  7.0	    	  7.0		  7.0

The above statistics are unofficial estimates.

2. Computers and Peripherals (CPT)

Narrative: The Danish hardware market can best be described as being fully developed. Nevertheless, the constant replacement process of old equipment with to-of-the-line hardware produces an estimated to growth of 15 percent per year over the next three years. All aspects of business, industry, services and public administration utilize state-of-the-art computerization for efficiency and cost saving. Half of all Danish homes have a PC and the number of home PCs with internet connections is increasing fast. U.S.- brand equipment are market leaders and many major U.S. companies have own sales and distribution offices in Denmark. These include IBM, Compaq, Dell, HP, Microsoft. Computer usage in Denmark is high and this is confirmed by a constantly growing market. U.S.-brand products are market leaders. Products are supplied either directly from the U.S. or, as in most cases, from third country manufacturing/assembly facilities. Most U.S. suppliers operate through fully owned subsidiaries. Local production is small and, with few exceptions, limited to OEM producers. The market is extremely PC network oriented. NOTE: The number of qualified, independent importing agents and distributors is very small. Consequently, new-to-market companies must be prepared to establish market presence through a wholly-owned subsidiary or sales office.

Data: ($ millions)		 1998		 1999		 2000
Total Market Size      	        1,950		2,180		2,270
Local Production	     	  250		  270 	  	  290
Total Exports, incl. re-exports	  850		  690		  680
Total Imports		    	2,550		2,600		2,660
Imports from the U.S.	 	  265		  270		  280
Exchange Rate	(1USD=DKK)   	  7.0	        7.0		  7.0

Source (1997 data): Official Danish Trade Statistics

3. Pollution Control Equipment (POL) Narrative: In 1972, Denmark was the first nation ever to establish a Ministry of the Environment. On a per capita basis, it is among the world's biggest spenders on environmental protection, and lack of low growth in total market size should be seen in the light of an already highly developed market. Denmark has a substantial and technologically advanced local industry which has also developed a significant foothold in the international market place, including the Baltic region and eastern Europe. Danish exports to these new markets benefit from Danish financial support for environmental improvements in these countries. U.S. exporters may find it advantageous to establish a business relationship with an established local company to help facilitate market access.

Data: ($ millions)		 1998		1999        	 2000
Total Market Size      	  	  400		 400		  400
Local Production		  575		 575		  575	
Total Exports		 	  300		 300		  300
Total Imports		  	  150		 150		  150
Imports from the U.S.		    5	  	   5 		    5

Exchange Rate	(1USD=DKK)   	  7.0	   	 7.0	        7.0	

The above statistics are unofficial best estimates.

4. Telecommunication Services (TES) Narrative: The Danish telecommunication market is now fully liberalized and privatized. Ameritech holds a controlling interest in the former national telephone company, Tele Danmark, and BellSouth holds almost 50% of the GSM 900/1800 operator Sonofon. Other important telecom companies in the Danish market are Telia (Swedish), and Mobilix (French). The major third-country hardware suppliers are NEC (Japan), Nokia (Finland), Ericsson (Sweden), Siemens (Germany). Nortel is the major U.S. hardware supplier. Lucent Technologies has a plant in Copenhagen producing and exporting high-quality fibers for optical fiber cables. While U.S. products generally are looked upon as market leaders there are no "Best Prospects" specifically for U.S. companies. Normal market mechanisms prevail. New-to-market companies will face fierce competition from those already established here, many of which are American. Also, the number of local companies willing to invest in new accounts is very small. Consequently, new-to-market companies should be prepared to establish their own sales offices in the region, or, as some have already done, establish a market presence through joint-ventures or buy-outs.

Data: There are no official "import+production-export=total market" statistics for the Telecommunications Service sector. The total service market is cautiously estimated by industry sources at $4.5 billion per year, with an estimated annual growth rate of 15-20 percent. U.S. companies (Ameritech and BellSouth) have a dominant position through controlling ownership of the two major service providers.

5. Electrical Power Systems (ELP)

Narrative: Danish power plants serve a stable national consumption of around 35,000 GWh, plus a more fluctuating export demand of 10-20,000 GWh. Present electrical power is primarily generated in coal fired plants, but the country is moving quickly towards cogens, fueled on natural gas and biomass. Wind power is expected to cover 20% of total consumption by year 2003. Danish power-plants are modern and fuel-efficient. They are largely self-financing and purchase only the latest in technology in order to meet the challenges of market liberalization. About 60% of total investments will be in production facilities with the remaining 40% in distribution. Local production of equipment plays an important role in this sector although the majority is imported. Market access is helped by the EU Utilities Directive, stipulating that supply and service contracts with a value of more than ECU 400,000 must be advertised in the Official Journal of the EU. U.S. companies may participate in the international bidding for power plant equipment.

Data: ($ millions)		 1998        1999		2000	
Total Market Size	  	  700		  700		 800
Total Production	 	  325		  325		 375
Total Exports			  175 	  	  175 	 	 175
Total Imports			  550	  	  550		 600
Total Imports from U.S.A.	   40		   40		  40	
Exchange Rate	(1USD=DKK)          7.0    	  7.0        	 7.0

The above statistics are unofficial estimates.

6. Oil and Gas Field Machinery (OGM) Narrative: A record high 1997 production of almost 12 million tons of oil, 7 billion cubic meters of natural gas, and continues offer significant opportunities for U.S. companies. However, while total annual investments reached just over $700 million in 1998, these are expected to decline to less than $500 in 1999 and further drop to around $300 by year 2000. The United States is a recognized industry leader of equipment for this industry, and local production is insignificant. Generally, heavy structures are supplied locally or from nearby third countries, while less freight sensitive equipment with a substantial technology contents offer excellent opportunities for U.S. vendors. Major third country suppliers are the U.K. and Germany.

Data:	($ millions)		 1998		1999	    2000
Total Market Size	          375		 290	     175  
Total Production		   27		  20	      15
Total Exports			   12	          10	       5
Total Imports			  360	 	 280	     165
Total Imports from U.S.A.	  240		 175	     120 	
Exchange Rate	(1USD=DKK)	    7.0	   	  7.0	       7.0

7. Medical Equipment (MED)

Denmark's hospitals are almost all publicly owned, and practically all medical care is subsidized. With increasingly tight government budgets, labor-saving equipment, especially high-tech diagnostic and surgical equipment have good potential. Some best sales prospects are: Infusion and transfusion equipment; cardiovascular equipment, diagnostic ultrasound equipment in general, defibrillators, cancer diagnostic/therapy equipment; monitoring equipment for anesthesia and for intensive care (respirators, etc.); medical-related biotechnology; endoscopes; surgical lasers; catheter devices - diagnostic and therapeutic; operating-room furniture, and disposables (custom-made and cost effective). Major public procurement is subject to EU Tender procurement rules. Major purchases are announced in the Supplement of the "EC Journal for Public Tendering". American companies have access to bid.

Data: ($ millions)			1999	 1999		 2000
Total Market Size			 487.7	497.4		507.4
Total Local Production			 912.4	930.6		949.2
Total Exports (incl. re-exports)	 850.7	867.8		885.1
Total Imports				 426.1	434.6		443.3
Imports from the U.S.			  63.9	 63.9		 63.9
Exchange Rate	(1USD=DKK)    	   	   7.00   7.00  	  7.00

The above statistics are unofficial estimates. (Note: Dental equipment is not included.)

8. Automotive Parts and Service Equipment (APS) Narrative: There are about 1.8 million passenger cars in Denmark, or about one per every three Danes. Following several years of continuous record sales, new passenger car sales peaked in 1998 with more than 150,000 units sold. This is the best result in a decade, but sales forecasts now indicate a drop to a level of around 130,000 units by year-end 1999. High taxes on cars result in long life cycles, offering good and continuous opportunities in the after-market, regardless of fluctuations in annual new car sales. Quite surprisingly, an already healthy after market has not been further boosted reinforced by launch of a mandatory biannual vehicle inspection program at the beginning of 1998. For a small market, competition is extremely fierce and opportunities exist primarily for large vendors with pan-European distribution. U.S. suppliers are well represented in this segment, although U.S. brand products are often supplied from manufacturing facilities within Europe and not always recognized as American. Local production of parts is substantial, but is largely focused on supplying major European auto makers outside Denmark. The strength of local producers is therefore seldom felt strongly in the Danish after-market. During the 1990's, there has been a steady increase in the sales of U.S. made cars and vans in Denmark. Although an increase from a low level counted only in hundreds of units per year, sales are now counted in thousands. As the accumulated volume of these cars reach "repair age", U.S. sales in the Danish after-market should increase.

Data ($ millions)		 1998		 1999		 2000	
Total Market Size      		  500		  500		  500
Local Production		  325		  325		  325	
Total Exports 			  445		  445		  445
Total Imports			  620		  620		  620 	
Imports from the U.S.	  	    5		    6		    6	
Exchange Rate	(1USD=DKK)   	  7.0	    	  7.0		  7.0	

The above statistics are unofficial estimates.

9. Travel and Tourism Services (TRA) Narrative: In 1998, over 140,000 Danes visited the United States. In spite of an often turbulent travel market, the number of Danes visiting the United States has increased steadily over the past six years and will likely stabilize in coming years. Florida remains the most popular destination, followed by New York and California. Danish tourists are good spenders with average expenditures of over US$2,000 per person for their U.S. trips. The United States earned about 7% of total Danish foreign tourism expenditures in 1997 and about US$3 for every US$1 that American tourists spent in Denmark.

Data: ($ millions)                  1998        1999          2000
Expenditures by Danish 
Tourists Abroad			     4,100	4,100         4,200       
Expenditures by Danish  	       305	 305           305
Tourists in the USA
Exchange Rate (1USD=DKK)             7.0	 7.0           7.0

The above statistics are unofficial estimates.

10. Franchising (FRA) Narrative: While franchising is not as widespread in Denmark as in the United States, it is a well-known of business. The bulk of franchise operated businesses are of Danish or Scandinavian origin. American franchising companies also operate in Denmark. The longest established are McDonalds and Burger King. Franchising is also common outside the fast food trade. Shoe-repair services, car rental, health clubs and indoor tanning salons are examples. There are currently about 134 franchise systems in Denmark with about 3,746 units. These represent annual sales of about $2.7 billion. The Danish Franchise Association (see app. E. 1b) is a member of the International Franchise Association headquartered in the U.S.A. Most promising franchising sectors over the next 18-36 months are: Specialty retail stores, fast delivery services, furniture-home decoration, apparel/fashion, maintenance and cleaning.

Data: ($) millions
                                     1998       1999          2000
Total Sales by                      2,700      2,900         3,000
Franchising Sector                           
Total Sales by U.S                    538        580           620
Franchising Systems
in Denmark
Exchange Rate   (1US$=DKK)            7.0        7.0           7.0
The above statistics are unofficial estimates)

B. Best Prospects for Agricultural Products

Fresh Vegetables Narrative: Although most of Denmark's fresh vegetable imports come from other EC member countries or from other hemisphere countries with other seasons, Danish importers are world traders and perceptive to competitive suppliers. All kinds of U.S. fresh vegetables are potential export items. Best potential exist for asparagus and fungi.

                             		1998       1999		2000
Data: (1,000 tons)      
Total Market Size            		 175        185		 195		
Total Local Production       		  16         16		  16 
Total Exports                		  11         11		  11
Total Imports                		 170       1800		 190
Total Imports from U.S.A.    		   1          2		   3
Exchange rate                		 7.0        7.0        	 7.0
The above statistics are unofficial estimates

Organic Products Narrative: Although most organic products produced and sold in Denmark are dairy products and vegetables, the demand for all kinds of organic products is increasing rapidly. They include beverages (including tea, coffee, wine, beer), meat, condiments (including honey and jam), baby food, raisins, rice, nuts, and all prepared foods.

                              		1998     1999	2000
Data: (1,000 tons)
Total Market Size              		 405      525 	 585
Total Local Production         		 400      515	 680
Total Exports                    	   5       10	  30	
Total Imports                    	  10       20	  25
Total Imports from U.S.A.        	   1        5	   8 	
Exchange rate                     	 7.0      7.0	 7.0 
The above statistics are unofficial estimates

Forest Products Narrative: Most of Denmark's wood trade is with neighboring countries such as Norway, Sweden and Germany. For soft wood logs and lumber, the U.S. market position is especially strong on plywood and could be expanded also to Oriented Strand Board (OSB) and hardwood for furniture and floor manufacturing.

                             		1998     1999	2000
Data: (1,000 cubic meters)
Total Market Size            		4,250    4,200	4,200
Total Local Production       		2,000    2,000	2,000
Total Exports                  		  400      400	  400
Total Imports                		2,650    2,600	2,600
Total Imports from U.S.A.       	  100      120
Exchange rate                  		  7.0      7.0	  7.0 
The above statistics are unofficial estimates

Feedstuffs (Dog & Cat food) Narrative: The total market is growing slowly and, in spite of large local production, imports constitute about 50 percent of the total market. U.S. products are competitive and should be able to increase.

                              		1998     1999	2000
Data: (1,000 tons)
Total Market Size               	  88       95  	100	
Total Local Production         		 186      195	195
Total Exports                  		 159      165	165
Total Imports                   	  61       65	 70
Total Imports from U.S.A.        	   4 	    5	  8
Exchange rate                  		 7.0      7.0	7.0
The above statistics are unofficial estimates

Wines In a steadily expanding market, the U.S. market share has increased for wine over the last 10 years. U.S. wine is now well recognized and the market share is expected to continue to grow, most probably up to 10 percent in a few years. Smaller importers are constantly looking for suppliers of small quantities and larger importers are constantly looking for exporters who can supply amounts of about 250,000 liters per year.

                              		1998   	1999    	2000
Data: (million liters) 
Total Market Size              		 162   	 165     	 170
Total Local Production           	   0       0 	         0
Total Exports                    	   0       0  		 0
Total Imports                  		 162     165     	 170
Total Imports from U.S.A.        	   4       5      	   6
Exchange rate                  		 7.0	 7.0               7.0 
The above statistics are unofficial estimates