SEC Final 2004

BEST EXPORT MARKETS FOR U.S. SECURITY AND SAFETY EQUIPMENT, 2004 Best Export Markets for U.S Security and Safety Equipment was compiled by Erika Martinez and edited by Quoc Thai at the El Camino College Center for International Trade Development (CITD), under the supervision of CITD Director Maurice Kogon. The report is based largely on 2004 Country Commercial Guides (CCGs) prepared by United States Commercial Service (USCS) posts abroad. All CCGs include a standard chapter “Leading Sectors for U.S. Exports.” This report drew from those CCGs which specifically recommended Security and Safety equipment as best prospects for U.S exports, based on near-term growth potential or large markets receptive to additional U.S. suppliers. The entire report is also available as a Word document, in print or electronically, for $25.00. To order, contact the El Camino College CITD at: 310-973-3173 or mkogon@elcamino.edu. CENTER FOR INTERNATIONAL TRADE DEVELOPMENT 13430 Hawthorne Blvd, Hawthorne, California 90250 USA http://elcamino.citd.org Phone: (310) 973-3173 Fax: (310) 973-3132 E-mail: mkogon@elcamino.edu. 1 BEST EXPORT MARKETS FOR U.S. SECURITY AND SAFETY EQUIPMENT, 2004 TABLE OF CONTENTS Page I. II. EXPORT MARKET OVERVIEW MARKET POTENTIAL INDICATORS A. US EXPORT STATISTICS - HTS 8531 B. MARKET SIZES- SECURITY AND SAFE EQUIPMENT III. BEST-PROSPECTS MARKET ASSESSMENTS 3 4-5 4 5 6-24 Argentina Australia Brazil Canada Chile Colombia Czech Republic France Guatemala Haiti IV. TRADE EVENTS V. Honduras Hong Kong Hungary Indonesia Israel Italy Jamaica Mexico Panama Peru Philippines Saudi Arabia South Africa Spain Sweden Taiwan Thailand Turkey United Arab Emirates Vietnam 25 26-27 AVAILABLE MARKET RESEARCH 2 I. EXPORT MARKET OVERVIEW HS 8531: Electric sound or visual signaling apparatus (bells, sirens, burglar or fire alarms etc.), Nesoi; and parts thereof. This Product Market Brief provides an overview of the world market for one category of U.S Security and Safety Equipment -- HS 8531: Electric sound or visual signaling apparatus (bells, sirens, burglar or fire alarms etc.), Nesoi; and parts thereof -- based on an analysis of the latest trade statistics and market research. Export Growth: U.S exports of HS 8531 items rose from $9.5 million 1999 to $1.03 billion in 2002, and increase of 8.36% over the three- year period. Leading foreign Markets: The leading markets for U.S HS 8531 items in 2002 (all valued above $10 million) were: Mexico (38% total); Canada (27% total); Hong Kong (5.5%); France (5.39%); Australia (4.25%). Other mayor markets (above $6 million) were: Spain (1.47%); Chile (1.38%); Turkey (1.32%); Israel (1.24%). Fastest growing Markets: Of the major, large-volume markets, those-showing-the highest tree year growth rates for U.S HS 8531 items (1999-2002) were: Mexico (20%); Canada (10%) and Taiwan (2.63%). Other (smaller-volume) high-growth markets over the three-year period were: Turkey (156.25%); Sweden (66%); Colombia (27%); and Saudi Arabia (25%). Declining Markets: Of the major, large volume markets, those-showing-the lowest threeyear growth rates for U.S HS 8531 items (1999-2002) were: Spain (-45%); Italy (-35%); Brazil (-33%) and Australia (-18%). Best Market Prospects: The markets listed below appear to be particularly promising for overall U.S exports of Security and Safe Equipment over the next two years. Specific U.S exports statistics on Security Equipment are available form the CITD for all countries, including those listed below (Source: U.S Census Bureau). The CITD also has access to relevant trade contacts, trade opportunities and market research on each. Argentina Australia Brazil Canada Chile Colombia Czech Republic France Guatemala Haiti Honduras Hong Kong Hungary Indonesia Israel Italy Jamaica Mexico Panama Peru Philippines Saudi Arabia South Africa Spain Sweden Taiwan Thailand Turkey United Arab Emirates Vietnam 3 II. MARKET POTENCIAL INDICATORS A. U.S EXPORT STATISTICS Top 30 U.S Export Markets 1998-2002 (Values in $ Thousands) HTS 8531: Electric sound or visual signaling apparatus (bells, sirens, burglar or fire alarms etc.), Nesoi; and parts thereof. Country Mexico Canada Hong Kong France Australia Brazil Taiwan Italy Spain Chile Turkey Israel Colombia Saudi Arabia Sweden Thailand United A. Emirates Argentina Philippines South Africa Peru Panama Indonesia Guatemala Czech Republic Honduras Vietnam Hungary Jamaica Haiti Sub Total Top 30 Sub Total Other Total to World 1999 200,334 155,493 35,967 34,052 33,479 27,894 15,449 16,885 17,481 8,539 3,296 8,316 5,748 5,659 3,817 2,628 3,471 16,941 25,851 10,483 1,786 2,807 938 692 1,967 675 103 750 500 5 642,006 315,899 957,905 2000 187,432 156,544 45,973 30,981 32,720 33,325 25,468 16,581 19,447 7,755 7,187 11,051 8,449 6,919 4,237 2,991 4,751 15,487 6,850 14,930 4,057 2,121 1,224 664 915 653 154 917 442 48 650,273 385,920 1,036,193 2001 259,393 141,635 46,701 38,042 32,932 22,523 19,324 12,591 10,426 8,531 4,521 10,745 6,680 8,250 5,405 3,847 4,014 14,376 6,216 10,433 2,078 1,426 1,671 2,000 1,114 1,199 346 399 420 271 677,509 2002 241,903 171,277 35,667 34,626 27,321 18,458 15,856 10,962 9,468 8,856 8,446 7,938 7,307 7,091 6,352 4,710 4,627 4,591 4,257 3,638 2,239 1,570 1,303 1,091 1,067 617 474 272 233 47 642,264 Percent Percent Percent change change Share 1999-2002 2001-2002 2002 -6.70% 37.66% 20.75% 20.90% 26.67% 10.15% -23.60% -0.83% 5.55% -9.00% 1.69% 5.39% -17.00% -18.39% 4.25% -18.10% -33.83% 2.87% -17.90% 2.63% 2.47% -12.90% -35.08% 1.71% -9.20% -45.84% 1.47% 3.80% 3.71% 1.38% 86.80% 156.25% 1.32% -26.10% -4.55% 1.24% 9.40% 27.12% 1.14% -14.00% 25.30% 1.10% 17.50% 66.41% 0.99% 22.40% 79.22% 0.73% 15.30% 33.30% 0.72% -68.10% -72.90% 0.71% -31.50% -83.53% 0.66% -65.10% -65.30% 0.57% 7.70% 25.36% 0.35% 10.10% -44.07% 0.24% -22.00% 38.91% 0.20% -45.40% 57.66% 0.17% -4.20% -45.75% 0.17% -48.60% -8.59% 0.10% 36.70% 360.19% 0.07% -31.80% -63.73% 0.04% -44.50% -53.40% 0.04% -82.80% 840.00% 0.01% -5.20% 61.87% 0.04% 25.28% 8.36% -5.00% -5.13% 38.13% 100% 416,599 395,760 1,094,108 1,038,024 4 B. MARKET SIZES FOR SECURITY AND SAFETY EQUIPMENT The Best Markets Matrix (below) provides comparative markets size data on 30 countries considered “best prospects” for U.S exports of Security and Safety equipment. The countries are listed in alphabetical order, not in rank order. The data on total market, import market, and imports from the U.S. are based on local sources and reflected the best estimates of USCS commercial officers in each country. Statistical accuracy and comparability to other sources (e.g., “USDOC Bureau of Census”) are affected by a number of factors; including lack of published figures in certain markets, variances in data collection techniques, sources of data, and industry definitions. HIGH POTENTIAL EXPORT MARKETS FOR U.S SECURITY AND SAFETY EQUIPMENT MARKET SIZE BY COUNTRY (Values in $ Millions) TOTAL MARKET 2001 2003 %Change 398 1,440 750 626 28 184.1 124 11,301 14.4 8.2 73 N/A 135 840 1,122 100 1,575.40 8 N/A 4.7 123.1 2.2 2,141 2300 926 448 40.2 254 60 431.3 1650 900 865 29 192.8 151 19,863 22.5 9.8 80 N/A 161.7 1,140 944 150 1,853.60 14 N/A 21.5 131.9 3.3 3,319 3022 1,275 490 55 327 65 8% 15% 20% 38% 4% 5% 22% 76% 56% 20% 10% N/A 20% 36% -16% 50% 18% 75% N/A 357% 7% 50% 55% 31% 38% 9% 37% 29% 8% COUNTRY Argentina * Australia Brazil Canada Chile ** Colombia Czech Republic France Guatemala * Honduras * Hong Kong Hungary Indonesia ** Israel * Italy Jamaica Mexico Panama Peru Philippines Saudi Arabia ** South Africa * Spain Sweden Taiwan Thailand * Turkey United A Emirates Vietnam * 2000-2002 Values ** 1999-2001 Values TOTAL IMPORTS 2001 2003 %Change 84 605 560 464 22 165.6 68 5,159 14.3 4.5 703 113 118.2 420 358 100 1,089.60 8 N/A 3.4 122.9 250 371 2,130 765 348 39 259 57.5 50 690 675 784 23 173.5 88 10,782 13.8 6.7 750 125 144.9 620 297 150 1,294.10 14 31.9 2.09 140.7 300 574 2,797 975 395 54 336 61 -0.40476 -0.12319 -0.17037 -0.40816 -0.04348 -0.04553 -0.22727 -0.52152 0.036232 -0.32836 -0.06267 -0.096 -0.18427 -0.32258 0.205387 -0.33333 -0.15802 -0.42857 N/A 0.626794 -0.12651 -0.16667 -0.35366 -0.23847 -0.21538 -0.11899 -0.27778 -0.22917 -0.05738 IMPORTS FROM THE US 2001 2003 %Change 15 475 310 165 7 56.7 24 2,515 8.8 8.2 66 3 20.7 270 90 60 681.00 6 N/A 412,603 83.6 87.5 63 38 138 38 25.6 27 8 10 515 338 296 7 59.3 38 4,565 13.8 9.8 65 4 33 425 75 80 582.30 10 7.1 419,921 93 110.7 98 50 175 51 30.5 37 14 -0.33333 0.084211 0.090323 0.793939 0 0.045855 0.583333 0.815109 0.568182 0.195122 -0.01515 0.333333 0.594203 0.574074 -0.16667 0.333333 -0.14493 0.666667 N/A 0.017736 0.11244 0.265143 0.555556 0.315789 0.268116 0.342105 0.191406 0.37037 0.75 5 III. BEST-PROSPECT MARKET ASSESMENTS Following are overviews of “best prospect” markets for U.S Security and Safety Equipments, based on observation of USCS posts in each country. The countries appear in alphabetical order. For more detailed market research on security and safety equipment in these and other specific markets, see relevant Industry Subsector Analyses (ISAs) listed in chapter IV. For general commercial and economic information on individual countries, see the relevant Country Commercial Guides (CCGs). ARGENTINA Security equipment is a sector that has seen significant growth over the past year. The continued economic crisis in Argentina has brought with it an increase in crime that has sparked increased spending in this area. The devaluation of the local currency in 2002 has hurt imports from the U.S. and elsewhere due to their increased cost. Nevertheless, there continues to be opportunities for U.S. security equipment manufacturers, particularly those that make components that can be used in domestic manufacturing. Argentina's security equipment market represents $420 million in revenue. Industry experts agree that current trends shows a marked increase in the number of security firms turning from imports to manufacturing security products for the local market due to the higher cost of importing. An area that shows promise for U.S. firms is exporting components used in manufacturing/assembling of CCTV and other locally manufactured products. The biggest issue is pricing, since many manufacturers view Asian products as more competitively priced. But the United States is considered to be a leader in technology and in security circles is seen as being a developed market with cutting-edge products. Sub sectors for U.S. companies to consider include: components for use in the manufacturing of access control equipment, CCTV, Fire Safety Products, Burglar/Fire Alarms. There has been an increase in vehicle armoring and personal safety devices as the number of armed thefts and kidnappings for ransom continue to rise. A growth in civil disturbances in recent years could mean more opportunities for sales of crowd control and security monitoring/communication equipment. The proliferation of gated communities and tighter security of residential and commercial buildings also may contribute to increased sales. AUSTRALIA Since the attacks in the U.S. mainland on 9 September 2001 and the bomb blast in Bali a year later, security and safety issues have taken on a new dimension in Australia. Headlines concerning crime prevention or industrial security have moved to the back pages in favor of reports focusing on the protection of Australians and Australian interests at home and abroad. What the headlines don't say is that, while expenditure on defense in Australia rarely reaches 3% of GDP, crime and crime prevention costs Australia close to $21 billion per annum or 6 5% of GDP. Fraud accounts for one third of the total cost of crime. The overall security market is estimated at $1.4 billion, with homeland security estimated at $706 million. The Australian Government recently committed an additional $740 million, to be spent over five years, to strengthen Australia's counterterrorism arrangements. An estimated 40% of this is for homeland security. There is a surge of interest in x-ray capability for shipping containers, (currently being evaluated), explosive and narcotic trace detection equipment, biometric photomatching technology, and airport checkedbaggage screening equipment. Demand for radiation trace detection may be just around the corner. Australia leans more toward personal weapons restriction than the U.S. It is illegal to possess weapons such as firearms, types of knives, irritant sprays and electronic stundevices. Capsicum-based sprays are in use by police services following intensive product trials. Private security companies, some of whose guards are licensed to carry firearms, are lobbying to be included with the police services as licensed holders of incapacitating sprays. There has been a national buy-back of automatic and semi-automatic firearms to reduce the number of these weapons in circulation, and there is pressure to revisit the buy-back and extend it to hand-carried weapons such as pistols. Traditional targets for criminal activity, such as banks, have hardened their security systems and have tended to displace the crime to softer targets such as retail outlets, dwellings and street attack. Security products for commercial and industrial premises are still an important feature of the market, although recent focus has turned to lower cost systems for residential use. Elements of the market include commercial and home monitoring and alarm equipment and systems; central station monitoring; access control systems; personal protection services; commercial and retail security products; and law enforcement equipment and technology. New technology such as that used in vehicle tracking systems, for example, is slowly entering the market. Safety needs extend from commercial and industrial equipment to traffic monitoring and control systems such as pedestrian crossing systems. The market itself has undergone consolidation in recent times, moving towards the structure typical of many Australian market sectors where it is dominated by a handful of large companies. Australian companies seeking relationships with U.S. principals tend to look for exclusive arrangements. Good agencies exist, although principals should exercise care when selecting candidates. Appointing a capable and qualified local representative is essential in successfully penetrating the market. BRAZIL According to local trade contacts, Brazil invests approximately $ 20 billion per year in safety and security equipment and services. Despite the ups and downs of Brazil's economic performance in the last few years, the safety and security sector has constantly registered an average growth of 15-20% per year. Brazil is currently facing serious social problems due to high unemployment rates and drug consumption. These factors have contributed to the increase of crime in large 7 cities. According to "Proteger", a security industry publication, someone is murdered every hour in the State of Sao Paulo, and kidnapped every few hours. Kidnappers usually carry guns and drive the victim around to make withdrawals from ATM cash machines. They do not hesitate to kill if the victims resist. In view of such a dramatic situation, federal, state and municipal governments are implementing new security measures to protect the population. Several cities have installed video cameras on the streets to inhibit criminal activities. Others have passed a law, or are in the process of approving a law, that makes it mandatory to install cameras or other security devices in residential and commercial buildings with more than four floors. As the violence level grows, the market for safety and security equipment also grows. There are opportunities in almost all segments, but it is in the electronic security segment that U.S. firms will find excellent opportunities. According to the Brazilian Association of Electronic Security Companies (ABESE), the market for electronic security equipment is estimated at $ 900 million. Foreign products supply about 75% of the market and U.S. products retain about 50% of the import market share. Major competitors are Israel and Japan, each one responsible for about 20% of market share. Today, electronic security equipment is not limited only to banks, commercial or industrial buildings. The increase of security monitoring services and security devices in residences is and will continue contributing to the fast expansion of the market. According to ABESE, there are 4.5 million properties in the State of Sao Paulo with potential to be equipped with electronic security equipment, but only 7% have a more sophisticated access control system. The market for electronic security equipment is heavily concentrated in the States of São Paulo, Rio de Janeiro, Espírito Santo and Minas Gerais, that together are responsible for 63% of the market. Best prospects in this segment include: access control equipment, especially ones that use biometric technology; CCTVs; home security equipment; alarm systems; and vehicle monitoring systems. There are no official statistics, but local industry contacts estimate the market for electronic security equipment is divided as follows: In the law enforcement segment, there is a huge need for bulletproof vests, ballistic shields and helmets, anti-trauma equipment, non-lethal arms, batons, cuffs, shotguns, super machine guns, night vision goggles, X-ray equipment to detect narcotics, and cellular call blockers. Most of these items are manufactured domestically, but several police officials have indicated recently that the quality is not up to the level of the ones produced in the United States. U.S. companies interested in this market segment will find excellent opportunities if they establish themselves in Brazil, or find a joint venture or technology transfer partner in Brazil. The Brazilian legislation for government tenders provides that the lowest bidder wins the contract. Since Brazil has high import-related costs it is difficult for foreign suppliers to compete successfully in the market unless they consider local production. 8 CANADA Industry sources predict that the size of the Canadian market for commercial security products and services to protect nonresidential buildings and facilities will grow 16-19% in 2003, to over $860 million. This level of growth is expected to continue through 2004. Major product sub sectors include access controls, alarms, biometric equipment, identification and smart cards, and safety glasses. Increased commercial, industrial, and institutional construction/renovation continues to fuel the demand for security equipment in Canada. The increasing importance of security in day-to-day business operations has generated new security challenges for corporations across all industry sectors. The Canadian government has recommended that corporations, airports, hospitals, and other organizations implement advanced security technologies to improve safety, and has allocated significant resources to the procurement of these technologies. Imports cover 91% of total Canadian demand for commercial security equipment, and US suppliers hold a 38% share of this import market. Advanced American security technology has allowed US firms to offer products that are more efficient and effective relative to comparable Canadian equipment. As the demand rises, US firms will have substantial competitive advantages in the Canadian market. CHILE According to a recent poll, 60% of the Chileans interviewed reported to have strengthened their home alarm systems, due to increase in delinquency and an increase in the unemployment rate. Currently in Chile, for a monthly fee of approximately $ 25, an alarm system can be installed in homes that include maintenance, guarantee, and connection to a surveillance center. Chile’s safety and security sector is expected to grow 4% during the year 2001. The construction of approximately 10 new prisons continues to be an important opportunity for U.S. suppliers in the penal security sector. Other security equipment that continues to be in demand includes access control, burglar and fire alarms and detectors, CCTV, outdoors photoelectric beam detectors for perimeter protection, and fire-fighting equipment. Street crime and delinquency continue to be an issue in Chile, therefore personal security products are also in demand. The following harmonized codes were considered for the statistical data: 64034000; 65061000; 84241000; 85122000; 85123000; 85131010; 85308000; 85311000; 85312000; and 85318000. During 2000, the imports for this industry came mainly from the U.S. (32.6%), followed by Canada (11.5%) and Taiwan (10.7%). COLOMBIA The security business in Colombia attracts many multinational companies that see Colombia as a promising and highly profitable market. End-users in Colombia have begun to understand the benefits involved in purchasing protection technologies both at a personal and corporate level. Companies have also recognized that administering a business implies conducting surveillance and keeping control of people, information, and property. Managers are also seeing the benefits of implementing security systems in the sense 9 that they can reduce costs for the company while helping to generate a sense of discipline and to increase the security awareness level among employees. Specifically, the demand for perimeter protection, intrusion detection, and panic button systems has grown to the point of becoming a priority for middle to upper class families, and also for a wide range of businesses. The security industry that has emerged in Colombia in recent years has been experiencing steady growth. Top executives from both multinational and local firms have come to rely more heavily on different types of security equipment in order to protect their lives and property. The Colombian market encompasses a wide range of technologies used to provide physical protection to facilities and residences. Beginning with the outermost protection ring that most facilities should have, there are several options for perimeter security. Some of the more popular ones are laser beams and pressure sensors that can detect when an intruder breaks a predetermined invisible barrier. Closing in on the facility itself, a wide range of vibration, aperture, and motion sensors are available in order to signal an intrusion. Intrusion detection devices are usually linked to audible signaling systems in order to deter burglars. Alarm systems work together with access control systems, in which both magnetic and proximity cards offer some of the more popular techniques employed in this area. Biometrics is being used more each day as they allow for more reliable user authentication than just passwords and/or access cards. Silent panic-button systems in residences and offices have become more and more common as they provide the option of discretely connecting to an emergency response service that will deploy a trained reaction team to the victim's location in coordination with the local police force. Thefts at banks and commercial institutions remain a threat. This situation accounts for the fact that electronic surveillance systems such as Closed Circuit Television (CCTV) is one of the most sought-after solutions for preventing and recording criminal actions against personnel and property. Guard tour administration systems are also common in Colombia, especially if they offer the option of activating an alarm signal if a security officer does not show up on time at the next inspection post. The other major threat faced by companies in Colombia besides insecurity is the possibility of a fire starting at or taking place near a facility or installation, especially if they are located in a highly concentrated industrial area. Consequently, fire alarm/protection systems appear as the logical complement to a perimeterprotection and intrusion-detection system. The ongoing trend aims at the integration of all of the above-mentioned systems under common platforms provided by PCs and associated operating systems that allow for the centralization and optimization of security administration. With the Internet reaching a larger segment of the population on a daily basis, companies and individuals have also become focused on protecting their information. This sub-sector is promising, given a continual increasing demand for information security. Companies dedicated to this special niche of the security industry offer solutions that range from software programs (firewalls and anti-virus) to intelligent cards and devices that offer physical and logic protection for laptops and 10 PCs, which preclude their unauthorized removal from company installations. Also in the mid-1990s, satellite location technology (GPS - Global Positioning System) emerged as the principal tool for managing and securing vehicle fleets. Several companies began to develop different types of solutions with the same purpose--providing automatic vehicle location (AVL). Transportation companies gradually became more and more interested, particularly as highway piracy became a serious threat. Independent users have also become interested in this technology since some insurance companies offer discounts if vehicles are equipped with some type of vehicle location system. Another sub-sector that has been traditionally productive and prosperous is that of vehicle and architectural armoring. Vehicle armoring ranges from light armoring for protection against light firearms and explosive devices, while architectural armoring secures doors, walls, and windows with high quality materials to prevent any type of hostile penetration. Personal protection items such as armored vests also have a high demand in the local market. This sub-sector relies extensively on the importation of materials such as "Kevlar," but once the materials arrive in country, the production process is handled almost entirely by Colombian personnel. There are also good business opportunities for law enforcement equipment and accessories as indicated by recent visits from U.S. company representatives. CZECH REPUBLIC Focus on security equipment and services in the Czech Republic continue to be a top priority for the Czech government. The Afghanistan War and the War in Iraq, along with the September 11th terrorist attack have all played key roles in creating an enhanced security market in the Czech Republic. Best prospects include metal detectors, securitymonitoring systems, and training and services related to security equipment. The following market segments also continue to show the largest needs: person-access checking systems, alarm equipment for buildings and motor vehicles, surveillance systems, and fire prevention and control equipment. FRANCE The SEC sector contains 25 different security segments in France which can be unified into nine major groups: Access controls / Alarm systems / Biometrics / CCTV (Closed Circuit Television Cameras) / Central station monitoring / Electronic Article Surveillance / Fire systems / Integrated systems / Home automation. Penetration of the market by foreign companies is constantly increasing in France. Entire sub-sectors of the private security industry in France are dominated by 40% by foreign groups, as opposed to less than 20% overall ten years ago. Market estimates for 2002 show average growth of nearly 10% over the previous year for the various sub-sectors in this industry. This pace is projected to continue over the next several years. Due to a continued rise in vandalism, crime and even terrorism, security has become a national issue and should continue to present good mid and long-term prospects. Certain sub-sectors showed particularly important increases in 2001-2002: • Professional Health/Safety/Security Equipment -- +18%. 11 • • • Executive Protection -- +13%. Residential Monitoring -- + 23% Surveillance Equipment -- +12% systems, closed circuit TV, one way mirrors, bullet proof windows and armored cars. Sales of car alarm systems showed dramatic increases during the last several years due to the high rate of car theft and robbery. Many retail shops offer a wide variety of vehicle alarms, which range from simple alarm or horn connected devices to highly sophisticated satellite systems. The most important supplier of Security & Safety Equipment is the United States with over 50% market share, followed by countries such as Italy, Taiwan, Hong Kong, Germany, Korea, Mexico, France and Israel. There is some domestic production of Security & Safety Equipment in Guatemala. Most of the local production consists of traffic signaling equipment (not electronic), locks, chains, some protective clothing (masks, gloves, boots), and bullet proof windows and doors. There are at least two Guatemalan companies that armor vehicles. Some U.S., Italian, German, Hong Kong and Taiwanese suppliers of different types of alarm systems, fire extinguishers and other similar items ship unassembled units to Guatemala which are assembled using domestic labor. According to the Bank of Guatemala’s export-import statistics, domestic production does not exceed 10% of the total market for the Security & Safety Equipment industry. There are no impediments to selling Security & Safety Equipment in Guatemala, excluding guns and ammunition, for which importers need special permits and clearances issued by the Guns and Ammunition Control Department (DECAM), a branch of the Ministry of Defense. U.S. Exporters must obtain export permits from the U.S. Government in order In a context where high technologies have an important role in security programs, it is anticipated that imports from the U.S will continue to strengthen, as American equipment of is renowned for its innovation. GUATEMALA The market for Security & Safety Equipment is growing. Crime is high in Guatemala and the need for personal security products and services is expected to keep increasing over the next few years. It is estimated that the general market for Security & Safety Equipment will grow at a rate of 25% for the next three years, as security clients look to replace guards with technology. The main users of Security & Safety Equipment are the industrial, commercial and financial services sectors. The installation of security systems in business offices located in the financial and commercial areas of the capital has increased over the past years. The need for armed guards has also increased mainly in the banking sector. The construction of new private housing projects which includes installation of different types of home security systems, such as alarms, sensors, smoke and fire detectors, water sprinklers and automated computerized home security systems is also growing. Within the public sector, the main users of Security & Safety systems and devices are the government banks and government agencies. The most commonly used equipment by the government include alarm 12 to sell weapons and ammunition to Guatemala. HAITI Over the next three years the market of security and safety equipment is expected to grow because of the increase needs in home protection and growing security concerns in Haiti. During previous 5 years, imports of security equipment were not significant. However there are niche markets for U.S. firms that can provide products for housing protection and for security companies, which are not well equipped to respond promptly to security concerns. Between 2002 and 2003, there will be an increase of 50% in the imports of security equipment in Haiti. Many Haitians would wish to buy security equipment to protect their homes, but cannot afford it. There is a market for electronic security equipment such as detection alarms, control equipment, bullet resistive doors, protection glasses for vehicles, security rolling doors, Smoke detectors and personal protection equipment. HONDURAS Sales of security and safety equipment have increased since 1990 due to painful economic reforms, high unemployment rates in the country, and limited capacity of police and security forces to adequately protect companies, homes, and vehicles. As a result, the demand for burglar alarms, car alarms, safes, and electronic surveillance equipment has increased, totaling about $8.2 million in 2001. There is no domestic production of security and safety equipment in the country. The market for security and safety equipment is supplied entirely by imports, making companies from the United States the principal suppliers to the local market. Among other importing countries for safety and security products are: Canada, Taiwan, and Japan. Imports from the U.S. represented approximately 49% of the country's total security and safety equipment imports during 2001. The market for the security and safety equipment is under a relatively free trade regime. Import tariff for most products is 15%. In addition, one must possess a permit issued by the Ministry of Security in order to import security equipment such as weapons and ammunitions into Honduras. Finally local market receptivity and demand for security equipment from U.S. distributors is high and extremely favorable. Such demand is expected to increase between 10-15% annually in the next two years due to the rise in crimes such as thefts and robberies. Since there are no significant restrictions and regulations in the security and safety equipment market, this makes conditions attractive for investors entering the Honduran market. In addition, the new government headed by President Ricardo Maduro has placed security as one of the top priorities for the next four years. The following items are among the best prospects for security equipment in Honduras: Safes and strong boxes, fire extinguishers charged, sprinkler Systems, fire / burglar alarms, smoke detectors HONG KONG Hong Kong is a growing market for safety and security equipment and services. In general, the Hong Kong market leans towards more sophisticated, high-tech products, an area in which U.S. firms enjoy a prominent market share. In 2002, imports 13 for security and safety equipment totaled approximately $727 million. After Japan, the U.S. was the second largest supplier of high-tech security products. The European Union was the third major competitor in this area. China and Taiwan were the market leaders in the low-end technology security market. In 2002, Hong Kong authorities reported a total of 75,877 criminal cases, an increase of 4% over 2001. Among them were 3,493 cases of robbery, 8,211 cases of burglary, 29,542 cases of thefts (including 7,470 shop thefts and 2,412 vehicle thefts). Commercial and industrial establishments, even the general public, are spending more on security-related equipment and services. In recent years, the Hong Kong Police Department's Crime Prevention Bureau has succeeded in raising the public's security awareness. Effective methods include introducing security equipment, holding tailored security seminars, conducting security studies, and designing security plans for commercial and residential premises. Popular products include surveillance equipment, high-security locks, reinforced safes, burglar alarms, access controls, property protection devices, central alarm systems, and identification devices. Security industry associations and insurance companies have joined forces to promote the installing sophisticated systems in commercial and industrial premises. Retailers are investing in detection equipment, such as Electronic Article Surveillance (EAS) because of increased shop theft. Individual property owners are seeking better protection for their possessions. Concern about fire and other safety hazard has boosted demand for fire security products and services. While Hong Kong is one of the safest cities in the world, increased security concerns worldwide following 9/11 and the recent SARS outbreak have fueled local demand for airport and border-crossing security equipment, such as chemical and thermal detection equipment. Hong Kong plans to build a large detention complex (Superjail) in one of its outlying islands. The estimated project cost for this centralized prison facility is approximately $2 billion. Upon completion, the facility will have a 7,000-inmate capacity. The Hong Kong Government will seek detention equipment, especially centralized electronic control systems for the project. HUNGARY Economic growth and social and political change are increasing the demand for security equipment in Hungary. Expanding shopping centers/retail networks are major purchasers of modern loss prevention, antishoplifting and surveillance equipment. Residential builders and renovators, as well as small businesses are increasingly taking security precautions and purchasing equipment. New hotels, logistic centers, industrial parks require modern safety and security equipment. As Hungary becomes the "East gate" of the European Union in 2004, the EU is demanding that it obtain better border and customs control equipment. International air carriers demand intensified airport security against terrorists. Government agencies, banks and other financial institutions are prime purchasers of safety and security equipment and services. EU assistance will greatly expand government resources to strengthen border controls. 14 INDONESIA The Indonesian security and safety equipment market offers excellent prospects for U.S. products. Demand for security and safety equipment in industrial plants, commercial buildings, oil/gas fields and mining operations has increased. In addition, in the medium and long term, demand should also increase in the construction sector. As the construction industry gradually recovers from the economic crisis, security systems and equipment will be especially needed in new high-rise buildings and in residential units. Upscale public and commercial buildings, as well as residential buildings, need not only building accessories such as keys and conventional locks, but also sophisticated security and safety equipment. Indonesians often hear news about the increasing number of crimes. Police crime statistics show that the crime rate is growing between 10 to 15% annually, attributable in part to the current unstable economic conditions in Indonesia. The level of crime has also been rising due to the widening gap between the rich and the poor. This high level of crime frightens home owners, especially those of middle and upper level incomes, so they prefer to use more sophisticated security equipment, including alarms for fences, garages, doors, and windows, access control systems, cameras and the like. Commercial and industrial buildings such as hotels and restaurants, shopping and recreational centers, manufacturing plants, offices, hospitals, schools and universities, etc., will also need security systems and equipment similar to, or more sophisticated than, that needed by residential units. Promising sub-sectors include personal security equipment, fire fighting equipment, and building security devices. The 2000 import market share (Percent for US and Major Competitors) was as follows: US: 25%; Australia: 19%; France: 14%; Singapore: 10%. ISRAEL Israel has a well-developed security sector, both for equipment and for services. A sophisticated local industry has developed to meet the country’s security needs. In addition, there is extensive export of security services and of locally developed equipment. In certain areas, such as personal security services, Israeli companies have established a global reputation. The hostilities in the West Bank and Gaza and the threats from terror have increased the need for protective gear. Israel’s security needs will remain high and there are niches in the market that can be filled by U.S. manufacturers of high quality products. Best prospects include fire alarm and fire fighting systems, safety equipment for tall buildings, bulletproof vests, non-lethal weapons and armored vehicles. The Israeli market for safety equipment and protective clothing is developing with increasing awareness of safety requirements. The entry of U.S. and European manufacturers to the market has given impetus to this sub-sector. ITALY Security continues to be of prime concern for industry, commerce and private citizens in Italy, particularly in the wake of the September 11 events. In addition to precautions being taken to prevent possible terrorist activities, a rapid increase in crime over the past decade, particularly property and vehicle theft and private and commercial fraud, has led Italian government organizations at all levels to devote greater resources to security. For 15 example, the Ministry of the Interior has introduced in March 2003 a "Pacchetto Sicurezza" (security package), outlining a series of forceful measures to crack down on crime, some measures of which include the tightening of punishment for minor offenses (such as street crime), restrictions on prison release and intensification of controls on newly released prisoners. According to statistics generated by the National Association for Security and Building Automation (Associazione Italiana Sicurezza ed Automazione Edifici: ANCISS), the inter-related security and building automation sectors enjoyed healthy growth in 2001. Total sales increased by 3.5%, while imports increased by 2.8%. ANCISS estimates that this upward trend will likely continue, driven by the allocation of regional funds for increased security in Italian cities, tax cuts made possible by recent financial laws for investments to increase security, and increased concern over crime in general and acts of terrorism. Unofficial data for late 2002 indicates that certain sub-sectors saw a significant increase in turnover, including the access control and video-surveillance sub-sectors. In general, equipment with greatest sales potential includes airport passenger and baggage screening equipment, port container scanning equipment, CCTV systems, perimeter protection systems, access control systems including biometric identification systems, fire-fighting equipment and systems, and personal protection equipment. Italy has a strong domestic safety and security industry with a reputation for high quality products. U.S. manufacturers of safety and security equipment have an excellent reputation in the Italian market, and enjoy an approximately 25% of the total market. CS Italy expects that U.S. manufacturers' presence in Italy will continue to grow. Security products with new, innovative and sophisticated features and in demand, but must be supported by strong after-sales service. The presence of a nationwide service organization that can guarantee installation and maintenance will prove a definite advantage, especially because customers generally will require training, support and maintenance. JAMAICA This is a growing market. Safety and Security are top national concerns in Jamaica. Increasingly, large companies, small firms and individual householders are budgeting increasing amounts for security. A list of specific products in demand includes: alarms, CCTV, gate openers, home security and door entry buzzers. MEXICO The crime situation in some parts of Mexico has elevated operational costs for companies and is a serious concern of the populace. According to the Citizens Institute for Studies about Insecurity (ICESI), the monetary losses due to criminal behavior represented US $50 billion in 2001, which is equivalent to 0.85% of the GDP. In response, the Mexican government has allotted increasingly greater financial resources to combat crime. In 2002, government expenditures on security represented 19.4% of total public expenses, reflecting an increase of 10% over the previous two years. Nevertheless, the populace in general has perceived no real improvement in the situation and continues to make significant investments in personal security. According to the National Institute of Statistics, Geography and Information (INEGI), between 2000 and 2002, the private sector invested 40% more in security 16 related products and services than during the previous two years. Official crime statistics are believed to significantly understate the size of the problem, but in general 80% of the population asserts having been a victim of crime. Reported offences that continue to rise most rapidly include attacks against private property, theft, and car jacking. Due to the situation described above, security services and equipment have become one of the fastest growing sectors in Mexico. Demand for security equipment and services in virtually every market category (commercial, industrial, government, home, automobile, and personal) continues to expand rapidly. The sales volume of the Mexican market for security products was estimated at US $1.5 billion in 2001. This market is expected to reach US $1.8 billion by the end of 2003, reflecting an annual growth rate of 8.4%. The most promising sub-sectors for equipment sales include the following: • • • • • • • • • • • Access control systems/scanners Satellite tracking systems Car alarms Electronic security Executive protection Fire detection systems High tech telecommunication devices Information security Personal defense items Security locks Training and counseling for law enforcement agencies technologically advanced products. Furthermore, local manufacturers cannot often compete with lower prices, higher quality, and product range of the imported goods. PANAMA The market for security and safety equipment offers good growth potential. While the crime rate is still relatively low, it is on the rise in Panama and banking and commercial institutions have been targeted for armed assaults. There is also an increasing need for security equipment in residential areas and public places. Because of high labor costs many businesses and households are automating security. The United States has kept a strong presence in the security and safety equipment sector with more than 70% market share during recent years. U.S. products are of high quality. Major competitors are from Japan, Korea and Germany. Best sales prospects are fire and burglar alarms, smoke detectors, electronic surveillance equipment and safe/strong boxes. Also, car alarm systems are always in strong demand. There are no restrictions on the entry of security and safety equipment. U.S. and European standards are accepted in Panama. Import duties range between 10% and 15%. Main users are banks, retailers, hotels, airports, hospitals, and large local and multinational corporations. PERU Inequality in wealth distribution continues to be a major problem in Peru. Growing poverty and unemployment are two of the main causes behind increased crime rates throughout the country, particularly in Lima. Despite lack of official figures concerning delinquency, a growing trend in common crime can be observed in recent years. There is virtually no domestic production of electronic security systems and devices in Mexico, thus creating an opportunity for U.S. exports, especially in more 17 Robberies, burglaries and assaults affect all social sectors and thus the demand for safety and security equipment has also risen. The Peruvian market for these products is very competitive with a large number of foreign and local brands doing business at aggressive prices. International suppliers already provide approximately 72% of current local demand. Imports are expected to reach $31.9 million in 2003, an increase of 12.62% compared to the previous year. The United States continues to be the market leader, mainly due to its high quality products. However, estimates show a 7% fall in its market share for 2003, down to $ 7.10 million. The most aggressive competitors are China ($ 4.46 million), Japan ($ 2.96 million), Spain ($ 1.42 million) and Taiwan ($ 1.17 million). Asian manufactured products are among the cheapest in the market and imports from these countries have significantly increased in 2003. Best prospect products in the Peruvian safety and security market include electronic alarms and access control equipment; security metal detectors; electronic surveillance such as closed circuit television systems (CCTV); sophisticated electronic devices such as automotive GPS satellite tracking devices; combination mechanisms used for safes and access control; and armored glass. PHILIPPINES The Philippine government has issued a 16point defense plan to strengthen intelligence, harden soft targets and manage the consequences of terrorist attacks. The policy framework is expected to spur new regulations regarding the safety and security situation in the Philippines, and increase sales of equipment and services. Sector players note that the Philippine market has become more price-conscious in recent years. As a result, the local market puts price consideration as an equally important element (other than product quality) in the decision to buy safety and security products. Given the Philippine market's affinity for US products and their brand-conscious nature, new suppliers of safety and security products can leverage on these two unique characteristics of the market, but only to a limited extent. Suppliers would have to convince both distributors/selling agents and the end-users of the advantages and benefits of new products. Product warranties and after-sales service may count in most, but not all, sub-sectors because some buyers may buy on price given budget considerations. US companies may have to employ a "push" strategy in penetrating this particular market sector. Most potential buyers may not be aware that such products exist and what benefits or advantages come from using those products. The following sub-sectors present promising opportunities: Information and Data Security Products and Services (firewalls, intrusion detection and response systems, anti-virus software, vulnerability assessment services and other related products and services); Building and Properties Safety and Security (burglar / intrusion alarm systems; access control systems including exit devices and swipe cards; surveillance systems (particularly closed circuit TVs or CCTV; fire alarm / fire detection systems; building automation; emergency evacuation systems); and Physical and Personal Security (protective gear and equipment). 18 SAUDI ARABIA The market for non-defense related security equipment continued to expand during 2000 and 2001 by approximately 7%. Imports of security systems and instruments are estimated at $141.2 million in 2001. New projects in the oil and gas industry, the proposed privatization of some government entities, the implementation of new banking security regulations and tighter security at high risk private industries, will all ensure an expanding market for security products and systems. The oil industry, using predominantly American products, is the major nonmilitary end-user of security equipment. American products, seen as top of the market, hold an approximate 66% market share. However, European suppliers are making inroads into the market, particularly in the private sector. Cost cutting is a major concern, and American companies must be aggressive in order to retain their market share. SOUTH AFRICA According to the latest available statistics, levels of recorded crime increased during 2000 and beyond. The public has voiced concerns over the ability of SAPS (South African Police Service) to control crime levels, and has, as a result, turned to the private security industry. In addition to visible policing, i.e. the protection industry, substantial investments have been made in the security equipment industry, particularly the high-tech end of the industry, e.g. CCTV and digital surveillance equipment, sophisticated access control systems (smart card technology), IT systems, etc. South African companies produce basic security equipment. U.S. security companies wishing to enter the South African market will find, despite a high level of domestic and international competition, that many sales opportunities do exist - particularly for those companies offering new and innovative security products. In addition, barriers to trade do not exist in this sector although import permits are required for certain equipment. The use of CCTV and digital recording systems will be the strongest area of growth in South Africa for the next few years. Users, in both domestic and commercial markets have a preference for video surveillance. The use of CCTV surveillance has proved to be very successful in establishing the identity of perpetrators at crime scenes. CCTV's are already widely used in many commercial venues such as hotels, casinos, banks, utilities, shopping centers and central business districts. Another growth area is access control where demand is growing for improved methods of controlling movement to PC's, networks and related equipment. In addition, access control, identification of vehicles, location management and maintenance recording, as well as time and attendance control requires appropriate technology. SPAIN Security has long been an important issue in Spain, well before the September 11 events. Recent international events will only reinforce security measures to be adopted at public and private entities such as at airports and on airlines, plus provisions for government and other official buildings, companies and other critical facilities. The market growth, including the demand for sophisticated equipment such as high-end biometric systems, provides an opportunity for U.S. manufacturers in this area. 19 There are several factors driving the increased sales of security products and services in Spain. One of these factors is the geographic proximity to North Africa, making Spain a logical gateway for illegal immigration and drug traffic. Finally, there remains the ever-present menace of ETA, the Basque terrorist group. There is also an increased demand for private security services. The Spanish private security services sector estimated that in 2003, over 90,000 security guards and close to 1,000 companies were authorized to offer their services in this market, with total revenues estimated at $3 billion. The number of companies active in this area has grown by 21% since 1996. An important market trend is the demand from customers for integrated solutions, covering on-site and immediate response personnel, electronic security and alarm systems and fire-related security. In the next few years, the concentration of large firms capable of offering integrated value-added services to customers is likely to increase. Main users of security/safety equipment are: national police; regional police; urban police; customs, anti-fraud, etc.; firemen and civil protection; army, navy, air force; airports and harbors administrations and management organizations; embassies and consulates; and the banking, insurance, telecommunications industries. Spain is a very good market given that U.S. products enjoy an excellent reputation as being state-of-the-art. Teaming with a Spanish counterpart should be considered as one option to develop a better market access strategy. SWEDEN The Swedish market for safety and security equipment has grown significantly in the recent years and the current turnover reaches $3.8 billion. The estimated growth percentage age in 2004 is 15%. The 9-11 changed the whole concept of security thinking even in Sweden and added a more tangible threat of both conventional and cyber terrorism and NCB attacks. In addition to the traditional security issues, concerns such as BCP, airport and hotel security and protection against biological agents came into focus. The most promising sub-sectors are equipment for both domestic and corporate security and protection, ranging from simple alarms and protective devices to complex LSM-systems that integrate fire alarm, passage control, area control and CCTV. In the IT security market the largest subgroups are firewalls, identification systems, anti virus programs, PKI, intrusion detection and backup equipment. U.S. products enjoy a good reputation in the Swedish market. The main competitors are domestic manufacturers and German and U.K. suppliers. There are no trade barriers or market impediments for security and safety equipment. TAIWAN Taiwan's crime statistics indicate that the number and severity of crimes are sharply increasing. In response to the worsening crime situation and the weakening confidence in the Taiwan authorities' ability to contain serious crime, the safety and security business is enjoying a booming market. In 2002, the market size for safety and security products in Taiwan totaled $987 million, up 6.6% from 2001, despite 20 the worldwide economic downturn. Increased demand for security and safety equipment is expected not just from the rise in demand from the private sector (on-going commercial and residential building construction projects, expanding large wholesale and retail areas, high-tech manufacturing facilities), but also from the public sector (e.g., military, law enforcement, Coast Guard, Customs, emergency preparedness, and energy supply facilities). THAILAND Thailand is a growing market for both public and private security and safety equipment. Although Thailand produces and exports some basic products such as locks, safes and alarms, the demand for almost all high-end, sophisticated security and safety equipment in Thailand is satisfied by imports. The import market registered 5-10% growth rate from 2000 to the present and will likely grow at the same rate in 2002-2003, while the export market showed a continuous negative growth rate. The Thai market is especially receptive to high-tech products and offers excellent opportunities for U.S. manufactured equipment. In the aftermath of the September 11th attacks, there is heightened awareness of potential security threats. Additionally, work continues on the New Bangkok International Airport project, which will require state-of-the-art systems. U.S. products in strong demand over the last three years include access control systems, electrical signaling equipment for traffic control, metal detectors, X-rays machines, fire extinguishers, fire fighting vehicles, and CCTV and digital video recording systems. American suppliers have captured 10-15% of the market for imported security and safety equipment, but face strong competition from Japan, China, Taiwan and Korea, especially in the low-end equipment market for access control systems, burglar alarms, and video surveillance systems. The demand for safety products is expected to rise in 2003 and beyond, once the standards for safety and occupational health in the workplace are published by the Ministry of Labor and Social Welfare. TURKEY The total market for safety and security equipment and services is estimated at about $250 million per year. More than 90% of the overall market consists of imported products. Although this sector is relatively new, safety and security equipment and services awareness is rapidly growing, and is a priority for factories, industrial plants, banks, and private citizens. According to industry contacts, the total market is expected to grow by a minimum 25% annually in the next two years. Turkish demand for safety and security systems is very much focused on technically advanced, electronically controlled products and systems. The market for improved, more advanced products and services will continue to grow steadily in the corporate sector (plant and office security) and is expected to grow strongly in the residential sector. Areas of particular demand will be in fire and theft alarms (particularly central alarm systems), improved locks and access control systems, and property and vehicle protection equipment. U.S. made safety and security products are widely recognized for their efficiency and top quality, representing the best engineering and design. However, at the same time U.S. prices are the highest in the market. As Turkish consumers become more aware of the need for enhanced safety and 21 security, Turkish imports of U.S. safety and security equipment and services are anticipated to rise substantially over the two years. The United States may increase their market share in this sector, if U.S. supplier can provide attractive and versatile payment options such as financing or installment payments. Major third-country suppliers to the Turkish market are Germany, The United Kingdom, Israel, Italy, Taiwan, and Canada. UNITED ARAB EMIRATES The UAE market offers excellent opportunities for US security systems and equipment firms, with the Ministry of Defense and the Ministry of Interior (including the Civil Defense Department, Border Guard and Coast Guard) as the main consumers. Dubai Airport is one of the busiest in the world and as a world-class facility in the post-9/11 era; airport security is a top priority for the airport authority. Dubai's bustling ports are also interested in increased security, particularly as the Dubai Port Authority, which includes Dubai Customs, proceeds with the US Customs' Container Security Initiative. The municipal police departments of Abu Dhabi and Dubai each have approximately 15,000 police officers, with Special Operations Commands and SWAT teams. The Dubai Police Department in particular is a modern one, preparing for the IMF/World Bank meetings in September 2003. The UAE is aware of the fast pace of improvements in security and police equipment and technologies worldwide and they wish to make the best use of the latest technologies. All agencies involved in security or law enforcement want the best tools available to do their jobs and are well funded for quality equipment. US safety and security systems and equipment enjoy a very good reputation in the UAE market, especially sophisticated high-tech equipment. The UAE's coastline stretches for 1300 km and the UAE has numerous islands especially in the Emirate of Abu Dhabi. Like many prosperous nations located near less-prosperous nations, the UAE struggles to combat the smuggling of illegal aliens along its coastline. Coastal surveillance systems are generating significant interest for that purpose as well as for the security of the UAE's numerous offshore oil platforms. With new and modern marinas being established in the numerous beach resorts, luxury boat ownership has also been on the rise, offering very good opportunities for all types of marine security systems, including boat-locating systems, GPS navigation systems, collision avoidance systems, and low-light or night-vision devices. Security officials are continuously developing new plans to improve security around sensitive areas and installations, as well as to protect prominent government officials. These plans usually require identification and access control equipment, perimeter security, monitoring and control devices, video monitors, CCTV cameras, warning and signaling devices, personal protection devices and accessories, armored and emergency response vehicles, and checking, searching and investigation equipment, including x-ray inspection equipment. There is a fast-growing awareness about the need for up-to-date commercial and personal security and safety systems, combined with a surge in infrastructure development in both the public and private sectors. The increase in visitors, including those for global meetings, keen interest in the latest 22 technological developments, and the UAE government's concern for the security of their residents all combine to add momentum to the expected growth in this sector over the next few years. Many UAE residents are now taking steps to better secure their homes and business establishments. This will also add to the substantial market growth expected over the next several years. Industry sources have reported 10-15% growth in the Security and Safety sector over the last two years and expect that this growth will continue. The International Commercial Security, Fire and Safety Exhibition and Conference (INTERSEC) in Dubai in January 2003 featured 125 exhibitors. INTERSEC 2004 is scheduled for January 25-27, 2004. A new trade show, Security & Safety Middle East, will debut in Abu Dhabi in the fall of 2003. The emirate of Sharjah will host MEPOL, in February 2004 at the Sharjah Expo Center. MEPOL will be supported by the US Department of Commerce and will specialize in safety and security products used by internal state security police, military, customs, civil defense, airports, and seaports. Information regarding upcoming "securityrelated" projects is difficult to obtain, because the UAE government does not release information regarding the scope or dollar value of its security projects. There are no real barriers for the import of security equipment into the country; however, the import of certain weapons and the installation of communications intercept and surveillance systems require prior permission from the Ministry of Interior. In addition, most crime control equipment requires US Department of Commerce or US Department of State export licenses for export from the US to the UAE. The US Commercial Service in Abu Dhabi has its own export control officer to advise US companies. In most cases, US security and safety firms will not deal directly with the agencies for the purchase of equipment. It is standard practice here for these agencies to issue tenders and seek bids from commercial companies to acquire products for resale to the government agencies. It is imperative that US firms be careful in selecting a local company to maximize opportunities to approach government ministries and equally imperative to be sensitive to the relationship the local firm has with the government agencies. Failure to perform or delayed performance can result in heavy fines and blacklisting for the local firms and this can have an adverse impact on opportunities for US firms. VIETNAM The total size of the safety and security equipment market is estimated to be $ 65 million for 2003, of which 60% consists of safety equipment. The market sees a growing demand in commercial sectors such as construction, commercial and residential buildings, banks, municipal fire prevention and fire fighting, maritime facilities, and airports. The demand for safety and security equipment in Vietnam is tied to the development of foreign-invested construction and property projects. The current growth of foreign businesses and of government spending on infrastructure in Vietnam has stimulated the safety and security equipment market. Primary sales of safety and security equipment have occurred in the construction market, where development of transport (roads and bridges), power (thermal and hydro), oil and gas (plant and pipeline), environment (water drainage), and buildings 23 (hotels and commercial sites) has outpaced other types of development projects. Foreign development companies have been the predominant buyers. In addition to the state budget, the Government can rely on substantial assistance from outside sources, particularly Official Development Assistance (ODA), to initiate safety and security upgrades in government-dominated sectors such as banking, maritime, power, oil and gas, and transport. Fire fighting and fire protection equipment is in demand, especially after the tragic fire with high casualties at a shopping center in Ho Chi Minh City late 2002. The city government has approved VND 100 billion (approx. $6.5 million) for the Fire Department to purchase fire fighting equipment in 2003. The Hanoi government also earmarked $3 million to upgrade the fire brigades' capacity this year. Monitoring and access control devices for buildings are best prospects. More than 95% of Vietnam's security safety equipment/systems are imports since the supply of domestic equipment by local companies is limited. Local manufacturers can only produce low- end items such as locks, safes, safety gloves, ropes, etc. Competition in this sector is intense. Major suppliers include the EU, Japan, Canada, China, Taiwan, and Russia. Although late in entering the market, U.S. equipment is highly regarded, especially high-tech equipment such as security X-ray machines where American companies maintain an estimated 17 - 20% share of the market. Security equipment import taxes range from 0 - 40%, depending on the components and the manner in which the components and systems are imported into Vietnam. Building-related equipment and systems with foreign investor's capital contribution can be imported duty free. The Government strictly monitors the sector with tightened control by the Decree 14/2001/ND-CP which rules that foreign organizations are not allowed to provide security services. They are, however, permitted to produce and repair equipment and tools used for security purposes. The import or export of security equipment requires approval from the Ministry of Police. 24 IV. TRADE EVENTS SECURITY AND SAFETY EQUIPMENT Trade events, such as trade shows, trade missions and catalog shows, offer excellent opportunities for face-to-face interaction with foreign buyers and distributors. Of the many U.S. and international events held throughout the year, some are vertical (single industry theme) and some horizontal (many industries represented). The events organized or approved by the U.S. Department of Commerce can be especially useful for first-time or infrequent participants – they require less lead time to register and typically involve more handholding. The Trade-Event Scheduling Web sites listed below allow selective searches for upcoming events by industry, location, type and date. They typically provide the event organizer, event descriptions and costs, and people to contact for more information. To find upcoming events for Security & Safety Equipment, use industry search terms security, safety, and the like. Schedules for U.S. Government Organized or Sponsored Events Domestic USDOC Events: http://www.export.gov/comm_svc/us_event_search.html International USDOC Events: http://www.export.gov/comm_svc/intl_event_search.html USDA (Food & agriculture) Events: http://www.fas.usda.gov/scripts/agexport/EventQuery.asp Schedules for Commercially Organized Events Expo 24-7 (http://www.expo24-7.com/default.asp) TSNN (http://www.tsnn.com/) ExpoWorldNet (http://www.expoworld.net/) Exhibition Center - Foreign Trade Online (http://www.foreign-trade.com/exhibit.htm) 25 V. AVAILABLE MARKET RESEARCH SECURITY AND SAFETY EQUIPMENT All reports listed below are in depth, country-specific surveys of the market for a specific industry sector or sub-sector, written by U.S commercial staff in these countries. Each report analyzes demand trends, the competition, business practices, distribution channels, promotional opportunities, and trade barriers. All the reports can be obtained in print or electronically for $25.00 from: CENTER FOR INTERNATIONAL TRADE DEVELOPMENT 13430 Hawthorne Blvd, Hawthorne, California 90250 USA Phone (310) 973-3173 Fax (310) 973-3132 E-mail: mkogon@elcamino.edu Safety and Security Equipment Components Security Equipment Homeland Security Personal Security Equipment Law Enforcement Equipment Security Equipment and Services Electronic Security Equipment Acces Control Systems Safety/Security Equipment Alarms and Detection Equipment Safety and Security Industry Alarms and Detection Equipment Security and Safety Equipment Safety and Security Equipment Safety Equipment Close-Circuit Television Argentina Argentina Australia Australia Australia Brazil Brazil Canada 4/23/03 10/1/02 4/2/03 5/21/01 6/1/99 3/17/03 4/5/00 5/30/03 Czech Republic 3/27/03 Chile Chile Chile Hong Kong Indonesia Israel Italy 2/2/03 9/28/01 7/1/99 9/11/01 6/5/03 1/29/03 9/30/03 26 Safety and Security Equipment Industrial/Commercial Security Products Safety and Security Equipment Industrial Security Security Industry/CCTV Market for Safety and security Services and Equipment Safety and Security Equipment and Services Security and Safety Equipment Security Products and Systems Security/Safety Equipment Safety and Security Market Safety and Security Equipment and Services Security and Safe Equipment/Services Safety and Security/Access Control Equipment Security and Safe Equipment Security/Safe Equipment and Systems Jamaica Mexico Philippines Saudi Arabia South Africa Spain Sweden Sweden Taiwan Thailand Turkey Turkey United A. Emirates Vietnam Vietnam Vietnam 3/19/03 10/21/99 4/7/01 3/6/00 8/1/99 4/23/03 3/21/03 11/30/99 8/29/03 9/3/02 5/30/03 10/1/02 2/1/00 8/1/03 3/20/03 7/1/99 27