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Country Commercial Guides for FY 2000: Sweden Report prepared by U.S. Embassy Stockholm, released July, 1999 Note*

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

Best Prospects for Non-Agricultural Goods and Services

1. Travel & Tourism	(TRA)
2. Computer Services	(CSV)
3. Computers & Peripherals	(CPT)
4. Computer Software	(CSF)
5. Aircraft and Parts	(AIR)
6. Telecommunications Services	(TES)
7. Drugs and Pharmaceuticals	(DRG)
8. Electronic Components	(ELC)
9. Automotive Parts and Accessories	(APS)
10. Telecommunications Equipment	(TEL)
11. Medical Equipment	(MED)
12. Pollution Control Equipment	(POL)
13. Sports and Leisure Products	(SPT)
14. Security and Safety Equipment	(SEC)

Sector Rank: 1
Name of Sector: Travel & Tourism
ITA Code: TRA

The Travel and Tourism industry is the largest industry in Sweden and the largest export earner for the U.S. Travel to the U.S. increased by 3 percent in 1999. The growth rate slowed down in 1999, in line with the stronger dollar. Sweden offers good business opportunities for U.S. travel and tourism related organizations. There are 5 major wholesalers and 25 travel/incentive agencies specializing in travel to the U.S.

Swedes enjoy a legislated 5 weeks paid holiday each year and they are avid travelers. In 1998 there were 14 million international departures from the Stockholm-Arlanda airport. The United States is the second most popular long-haul destination. In 1997 the visitors to the U.S. increased 9 percent over the previous year. In 1998 a record number of 301,000 Swedes visited the U.S of which 49 percent were business travelers and 51 percent were on holidays. They spent an estimated $665 million while in the U.S. (the figure is excluding airfare).

Travel and Tourism	1997	1998	1999(e)
A. Total Sales:	15,670	17,100	19,150
B. Sales by local firms:	8,900	9,800	10,300
C. Sales by foreign owned firms:	5,700	6,010	7,450
D. Sales by US-owned firms:	1,050	1,200	1,400
Exchange rate used: USD 1.00 equals SEK	7.64	7.95	8.30 (e)

The above statistics are unofficial estimates

Sector Rank: 2 Sector Name: Computer Services ITA Industry Code: CSV

Sweden is one of the most computerized countries in the world with 6.49 percent of GDP invested in ICT. It is estimated that Swedish companies will buy one million personal computers during 1999. A great number of companies will need more powerful machines to handle the new operating systems. It is estimated that the companies will invest USD 125 to 190 million on upgrades. PC penetration is expected to reach 60 percent in 1999.

One driving force behind the sharp increase of computer services is the need to make IT equipment Y2K compliant. Other driving forces have been the introduction of the Euro, and the technological change toward the adoption of electronic commerce and applications for the Internet. The growing presence of IT products and services at all levels of the business chain means that IT is playing a more strategic role in the companies. The largest players in the Swedish market WM-data (Sweden), IBM, Merkantildata (Norway), Enator (Sweden), Tieto (Finland), Cap Gemini (France), Sema Group (France/the U.K.), and EDS.

The following sectors are deemed to be of the most interest: Internet/intranet, process outsourcing, systems and networks implementation, education and training, and support services.

Computer Services	1997	1998	1999(e)
Total Sales	3,299	3,694	4,113
Sales by U.S. Firms	864	968	1,110
Exchange rate used: USD 1 equals SEK	7.64	7.95	8.30(e)

USD Million
The above statistics are unofficial estimates.

Sector Rank: 3
Sector Name: Computers & Peripheral Equipment
ITA Industry Code: CPT

Sweden is one of the most computerized countries in the world with 6.49 percent of GDP invested in ICT. It is estimated that Swedish companies will buy one million personal computers during 1999. A great number of companies will need more powerful machines to handle the new operating systems. It is estimated that the companies will invest USD 125 to 190 million on upgrades. U.S. suppliers have a strong position in the computer market. Dominant suppliers are Dell, Compaq, IBM, HP, Sun Microsystems, Unisys, Philips, ICL, Fujitsu and Siemens Nixdorf. The following products have the best sales potential in Sweden: Pentium III computers, small and medium multi-processor servers, multimedia hardware and high-end color printers.

Computers & Peripheral Equipment	1997	1998	1999 (e)
A. Total Market Size	2,439	2,460	2,828
B. Total Local Production	423	431	427
C. Total Exports	746	737	811
D. Total Imports	3,205	3,206	3,212
E. U.S. Imports	1,109	1,181	1,240
Exchange rate used: USD 1 equals SEK	7.64	7.95	8.30 (e

USD Million

The above statistics are unofficial estimates.

Sector Rank: 4 Sector Name: Computer Software ITA Industry Code: CSF

The Swedish computer software market will see a healthy growth during 1999 and beyond. One of the driving forces behind this is the ever-increasing interest in the Internet in Sweden. Approximately 45,000 Swedish companies currently have their own Website and 7,000 companies offer e-commerce services. Sweden has some 600 software companies, mainly focused on the market for enterprise resources, data security and cryptographic software.

The major U.S. packaged software suppliers are well represented in the Swedish software market and U.S. products are considered to be of high quality and reliable. Best prospects for U.S. software suppliers are PC and network operating systems, Windows-based applications, Web security, enterprise development tools, and multimedia platforms.

Computer Software	1997	1998	1999(e)
A. Total Market Size	1,385	1,433	1,647
B. Total Local Production	720	751	859
C. Total Exports	81	83	87
D. Total Imports	746	765	875
E. U.S. Imports	545	562	562
Exchange rate used: USD 1 equals SEK	7.64	7.95	8.30 (e))

USD Million

The above statistics are unofficial estimates.

Sector Rank: 5

Name of Sector: Aircraft and Parts
ITA Industry Code: AIR

The Swedish aerospace market is growing steadily. Civil air traffic has reached its highest volume ever. 1998 saw an increase of 9 percent from the previous year in international air travel (to 14.5 million passengers) and a 6 percent increase in domestic air travel (to 7.2 million passengers). To accommodate the increased volume, Swedish airports are expanding and airlines are investing in new aircraft. This is particularly the case for Scandinavian Airlines System (SAS), which has ordered 55 Boeing 737 New Generation aircraft (mainly 600's) to replace its fleet of Fokker F-28 and DC-9 aircraft. For its commuter service, SAS has ordered 17 Dash 8 Q400. During 1999, SAS is expected to decide on a new aircraft to replace its current fleet of 13 Boeing 767. The order is valued at 1.5 billion USD and entails 10-13 long-range aircraft, with Airbus A340 and Boeing 777 as the contenders. The final phase of SAS' fleet renewal will be the replacement of its MD-80 and MD-90 aircraft, which will take place well into the next decade. Also the smaller carriers in Sweden are renewing their fleets. One example is Skyways, a carrier part owned by SAS, which is acquiring five Embraer 145.

The military aerospace market remains strong. Despite the Swedish government's decision to substantially cut defense spending, the procurement of 204 JAS 39 Gripen fighters for the Swedish Air Force remains on track. The Joint Nordic Helicopter Program, i.e. the joint procurement of medium-heavy transport helicopters for the Swedish, Finnish, Danish and Norwegian armed forces proceeds according to plan.

The Swedish aerospace industry is well developed and is involved in research, development and production in most aerospace segments: aircraft and engines, space applications, and communication and positioning systems. While the aerospace companies were formerly focused mainly on the domestic market, they are now seeking new markets and teaming partners globally. The principal Swedish aerospace companies are Saab (aircraft and avionics), Volvo Aero (aircraft and rocket engines), Celsius (fixed-wing and helicopter maintenance), Ericsson (radars) and the Swedish Space Corporation (micro-satellites and sounding rockets). Saab is now focusing on the production of the JAS 39 Gripen fighter following its decision to cease the production of regional turboprop aircraft (Saab 340 and 2000). Yet the company will remain in civil aerospace as a systems supplier to Boeing and Airbus. Saab is participating as a risk-sharing partner in Airbus' development of the Superjumbo A3XX.

Aircraft and Parts	1997	1998	1999
A. Total Market Size	1,461	1,910	1,958
B. Total Local Production	2,418	2,440	2,500
C. Total Exports	2,058	2,171	2,225
D. Total Imports	1,101	1,641	1,683
E. U.S. Imports	771	1,149	1,178
Exchange Rates used USD 1 equals SEK	7.64	7.95	830 (e)

USD Million

Sector Rank: 6
Sector Name: Telecommunications Services
ITA Industry Code: TES

The Swedish telecommunications market was deregulated in 1993. There are no restrictions protecting Swedish interests or restricting foreign operations from establishing themselves in Sweden. The infrastructure is well developed, with 68 lines per 100 inhabitants and a mobile phone penetration of approximately 48 percent, and is continually improved (digitalization has reached 99.3 percent of Swedish customers.) There are eight companies that provide leased lines, 13 companies that provide fixed telephony, and four companies licensed to provide mobile telephony (three currently active). There are also some 30 companies specializing in niche markets. Internet usage is among the highest in the world and is growing steadily. There is fierce competition in long distance services, mobile telephony, Internet, CATV and leased lines. Significant players in the market are Telia, Tele2, Global One, Telenordia, MCIWorldCom, TeliTel, AT&T, Europolitan.

Best sales prospects are packaged, custom-designed solutions based on integration of datacom and telephony, broadband, mobile and Internet services.

Telecommunications Services	1997	1998	1999 (e)
Total Sales	6,206	6,407	6,518
Sales by Local Firms	5,585	5,766	5,866
Sales by Foreign Owned Firms	621	641	652
Sales by U.S. Firms	310	320	326
Exchange rate used USD 1 equals SEK	7.64	7.95	8.30 (e)

USD million

The above statistics are unofficial estimates

Sector Rank: 7
Name of Sector: Drugs and Pharmaceuticals
IT Industry Code: DRG

The Swedish pharmaceutical industry is active in research and drug sales in the areas of oncology, growth disorders and eye diseases, gastrointestinal, respiratory and cardiovascular diseases. The U.S. market share (39%) is the highest among foreign suppliers. American pharmaceutical firms are considered world-leaders in research and production, consequently their products enjoy a good reputation. The Swedish pharmaceutical market is highly competitive, but according to trade sources the following areas should represent opportunities for new entrants in the market antibiotics, anti-asthmatics, impotence treatment, treatments for Alzheimer, AIDS and cancer.

Drugs and Pharmaceuticals	1997	1998	1999(e)
A. Total Market Size	1,971	2,086	2,123
B. Total Local Production	3,858	4,460	4,522
C. Total Exports	2,841	3,392	3,439
D. Total Imports	954	1,017	1,040
E. Imports from the U.S.**	24	45	50
Exchange rates used: USD 1 equals SEK	7.64	7.94	8.30(e)

USD Million
The above statistics are unofficial estimates.

** it should be noted that the figures quoted reflect direct import from the U.S.

U.S. imports are in reality higher (39% of total imports, or US$397 mill in 1998) as the market is supplied through U.S. subsidiaries in Europe.

Sector Rank: 8 Name of Sector: Electronic Components ITA Industry Code: ELC

The Swedish market for electronic components is dominated by the telecommunications sector, in which Telefon AB L.M. Ericsson is by far the most significant enterprise. Domestic production, which is highly specialized and low volume, is not a competitive factor for U.S. producers. The U.S.A. is the leading supplier of sophisticated components to Sweden. Main competitors are Japanese companies and companies located in the EU countries (much of Sweden's imports are really product of U.S. design manufactured by U.S. subsidiaries in other countries) and to some extent other Asian suppliers. There are no trade barriers or market impediments for electronic components. The most promising subsector is semiconductors due to Ericsson's successes in the telecommunications market.

Electronic Components	1997	1998	1999
A. Total Market Size	2,068	2,088	2,100
B. Total Local Production	737	744	747
C. Total Exports	1,080	1,095	1,100
D. Total Imports	2,411	2,439	2,453
E. Imports from the U.S.	290	294	296
Exchange rates used: USD 1 equals SEK	7.64	7.95	8.30

USD Million

The above statistics are unofficial estimates.

Sector Rank: 9
Sector Name: Automotive Parts and Accessories
ITA Industry Code: APS

Sweden with a population of about 8.8 million had 3.8 million cars in 1998. This corresponds to one car to every 2.3 people. The number of commercial vehicles was 353,000. Half the fleet of cars in use today is at least 10 years old, which is a high proportion compared to many other European countries.

The total import of automotive parts and accessories was worth USD 2,262 million in 1998. Major supplying countries were Germany, UK and Belgium-Luxembourg. US suppliers accounted for approx. 6 percent of the import market, which is an increase of about 50%, compared to 1997.

Especially good sales prospects exist for products within the "safety" and "environment" sectors. Swedes are very safety conscious and the automotive manufacturers are known to follow high safety standards. Products that are related to the Swedish climate also enjoy good prospects (engine heaters, roof boxes for skis, etc.). According to the statistics, areas where US suppliers are doing well are brake systems, steering systems, body parts and gearboxes/transmissions. Automotive chemicals are also a segment where U.S. firms are strong.

USD Million

Automotive Parts and Accessories	1997	1998	1999(est)
A. Total Market Size	2,536	2,474	2,488
B. Total Local Production	3,161	3,717	3,738
C. Total Exports	2,909	3,505	3,525
D. Total Imports	2,284	2,262	2,275
E. Imports from the U.S.	90	137	138
Exchange rates used: USD 1 equals SEK	7.64	7.95	8.30 (e)

The above statistics are unofficial estimates

Sector Rank: 10
Sector Name: Telecommunications Equipment
ITA Industry Code: TEL

The Swedish telecommunications market has been liberalized since July 1993. There are no restrictions protecting Swedish interests or restricting foreign operations from establishing themselves in Sweden. It is a mature, well-developed and sophisticated market, demanding state-of-the-art technology with a high per capita rate of telephone ownership (68 lines per 100 inhabitants and a mobile phone penetration of around 48 percent.) The dominating company in the Swedish market is Ericsson. Other players are Nokia, Motorola, Lucent, Nortel, Alcatel, Siemens, Bay, and Cisco.

The following sectors are expected to be of most interest: IP-based communication systems, dual-band telephones, cordless telephones, broadband communication solutions.

Telecommunications Equipment	1997	1998	1999(e)
Total Market Size	3,131	3,080	3,055
Total Local Production	6,735	6,796	6,837
Total Exports	4,756	4,904	4,988
Total Imports	1,152	1,187	1,208
U.S. Imports	61*	60*	58*
Exchange rate used:USD 1 equals SEK	7.64	7.95	8.30

The above statistics are unofficial estimates U.S. imports are in reality higher as the Swedish market is often supplied by U.S. subsidiaries in Europe.

Rank of Sector: 11 Name of Sector: Medical Equipment ITA Industry Code: MED

Sweden is regarded as one of the most advanced medical equipment markets in the world. The factors reshaping the future health care system in Sweden are the increase in an aging population, efforts to contain cost and the influence of new technologies. Despite the dominant position of the German owned Siemens-Elema, the Swedish medical market looks to the U.S. for new developments in research and the application of new techniques. Other major competitors are Denmark/Finland, and the UK. The demand for telemedicine/medical informatics is expected to show a strong increase in the next few years.

Medical Equipment	1997	1998	1999(e)
A. Total Market Size	426	494	495
B. Total Local Production	927	1,029	1,045
C. Total Exports	1,304	1,305	1,325
D. Total Imports	803	770	775
E. Imports from the U.S.	221	213	214
Exchange rates used USD 1 equals SEK	7.64	7.95	8.30(e)

USD Million

The above statistics are unofficial estimates.

Sector Rank: 12 Name of Sector: Pollution Control Equipment ITA Industry Code: POL

Swedish environmental technologies and services firms operate in the areas of air pollution, water pollution, waste management and environmental monitoring. Although domestic suppliers of pollution control equipment are strong and world leaders in their respective field, they look for new results from extensive R&D and the applications for new technologies. American products enjoy a good reputation on market but will find strong competition from both domestic firms and third-country suppliers. According to trade sources, the market for water treatment control is mature and well covered, while best sales prospects may be found in products and services related to air pollution control, soil remediation and waste management products/techniques.

Pollution Control Equipment	1997	1998	1999(e)
A. Total Market Size	1,193	1,198	1,214
B. Total Local Production	1,555	1,555	1,576
C. Total Exports	988	989	1,002
D. Total Imports	626	632	640
E. Imports from the U.S.	85	85	86
Exchange rates used: USD 1 equals SEK	7.64	7.95	8.30(e)

USD Million
The above statistics are unofficial estimates.

Rank of Sector: 13 Name of Sector: Sports and Leisure Products ITA Code: SPT

Comments: The sports and leisure market grew by approx. 12 percent in 1998. The total sector including sports wear is valued at approximately $1,6 billion. Growth of the sports and leisure market continues in 1999. U.S. producers traditionally have a strong position in the high-end segments. Golf equipment, snowboards, paint ball equipment, water sports equipment and the latest fad in-liners are dominated by U.S. products. New quality products are often trend setting and generally enjoy a very good reputation. Three major distributors cover 70 percent of the market. The main volume of the sports market turnover in Sweden is divided between the following categories: bicycles, sportswear and shoes, sports equipment and leisure articles.

Sports and Leisure Products	1997	1998	1999(e)
A. Total Market Size:	527	590	661
B. Total Local Production:	376	413	446
C. Total Exports:	164	180	194
D. Total Imports:	325	347	409
E. Total Imports from U.S.:	21	21	22
Exchange rate used: USD 1.00 equals SEK`	7.64	7.95	8.30

USD Million

The above statistics are unofficial estimates and excluding sportswear.

Sector Rank: 14
Name of Sector: Security and Safety Equipment
ITA Industry Code: SEC

Comments: An increasing crime rate and people's insecurity benefits the security and safety business. Sales of domestic security alarms are increasing by 40 percent a year. A structural change in banks, postal services, and the rest of the business life contributes making the security business insensitive to the financial situation. Tailor-made package solutions have become a successful concept for big firms, which today can guarantee cheaper safety solutions for many customers, who earlier used to solve their own security problems. A heavy retrenchment policy by the Swedish administration of justice results in fewer crime solutions. Voices are raised for increased investments in crime-preventing actions and technology. The most promising subsectors are equipment for personal security, e.g. domestic alarm systems, and tailor-made package solutions, which can guarantee cheaper safety solutions. U.S. made products enjoy a good reputation, but new-to-market firms should be aware of a keen competition from both domestic and third-country suppliers, e.g. Germany and the U.K. There are no trade barriers or market impediments for security and safety equipment.

Security and Safety Equipment	1997	1998	1999(e)
A. Total Market Size:	333	348	360
B. Total Local Production:	193	202	209
C. Total Exports:	153	160	165
D. Total Imports:	293	306	316
E. Imports from the U.S	19	20	21
Exchange rates used USD 1.00 equals SEK	7.64	7.95	8.30(e)

Data Table in US Million The above statistics are unofficial estimates

Best Prospect Sectors - Food and Agricultural Products

Sweden is a major market for dried fruit, nuts, grapefruit, apples, and pears. Demand for organic food products are increasing in addition to other overall healthy food products such as high-fiber cereals, pasta products, pasta sauces, fruit juices of all kinds, avocados, and celery. Also, the Swedish market is strong for spices and condiments. However, considering domestic production, prices and competition from other countries can cause major swings in year to year imports of many of these commodities. Swedish consumers are prepared to pay for high quality and insist on freedom from chemicals and pesticides. Tolerance levels for Salmonella in meat and meat products are stricter in Sweden than in the European Union.

In the fisheries sector, the United States dominates a stable market for "Swedish style" crayfish. There is also some interest in Pacific salmon and white fish roe.

In the forestry sector, minor quantities of U.S. hardwood lumber for the furniture industry is being imported. Some softwood lumber is being exported from Sweden to the United States.

For current data on agricultural trade prospects with Sweden, the reader is referred to the following Internet web site:

http://www.usis.usemb.se/Agriculture/Index.html

This site is maintained by the USDA office in Stockholm, which has regional responsibilities for Sweden, Finland, Norway, Latvia and Estonia. Its content includes an analytical overview of agricultural marketing opportunities in the region, marketing activities of possible interest to U.S. firms, an array of exporter/importer services and links to sites containing a detailed current breakdown of individual country imports/exports of agricultural products subdivided into several product categories (bulk, intermediate, consumer-oriented, forestry and fishery).

Growth in these markets is limited. These markets are facing increasing competition from other countries and the U.S. must continue to promote its product or loose its market position. In the case of crayfish, the U.S. could have a stronger market position. However, currently the People's Republic of China and Spain have become the main competitors to U.S. suppliers. U.S. wines have become increasingly popular due to increased wine consumption and Swedish consumers are looking to other countries than the traditional wine suppliers.

FOOD FAIRS - SWEDEN - 1998

September 11-14, 2000
GastroNord & Vinordic
Stockholm International Fairs
125 80 Stockholm
Tel: 46-8-749 41 00
Fax: 46-8-99 20 44
E-mail: www.stofair.se