#18 - Business news from the Economic Mission of the French Embassy in Denmark [fr]

#18- Business news from the Economic Mission – September 2021

Disclaimer - The Economic Mission strives to provide accurate and up-to-date information and will correct, to the extent possible, any errors that are brought to our attention. However, it cannot be held responsible for the use and interpretation of the information contained in this publication.

Industry

Bavarian Nordic receives €108m for the development of a new vaccine against COVID-19
Bavarian Nordic, a Danish pharmaceutical company founded in 1994, will benefit from a DKK 800 million (€108 million) state aid measure for the development and production of its booster vaccine against COVID-19, which entered phase two on 23 August. The European Commission has approved this support plan under the temporary framework for state aid, which exceptionally allows for flexibility in the rules governing state aid measures. The Danish government announced that it would "concentrate its efforts" on Bavarian Nordic’s vaccine and would not issue a call for tenders for the production of other vaccines in the country. For Bavarian Nordic, the funds should be released gradually. DKK 80m (€10m) has already been granted to the Danish laboratory. The remaining DKK 720M (€98M) are conditional on certain objectives. These include validation of the third phase, aimed at confirming the safety and demonstrating the efficacy of the vaccine, and the launch of large-scale production. If the company proves profitable, the government advance will be repaid (in the form of cash or vaccines) and a capped return on investment may be paid out. Until then, Bavarian Nordic will need to obtain approval from the European Medicines Agency for a marketing application by 2022. European Commission, Finans

A second Danish vaccine against COVID-19 will be tested on people in 2022
The second Danish COVID-19 vaccine, Covaxix, developed by the Danish Statens Serum Institute (SSI), will be available for population testing in 2022. The SSI claims that its model is responsive and that its vaccine is versatile, proving to be highly effective against the Delta variant and can be mobilised in the event of influenza epidemics. It is funded by the Danish government to the tune of DKK 31 million (€4.1 million) for phases one and two. However, funding for phase three, during which the drug is tested on several thousand people, is not in place. Delays in delivery are being experienced due to production difficulties in the busy US factories. Although no start-up date has been given, the vaccine will be reserved for the Danish market. Ritzau

Mærsk enters into a partnership with European Energy for green methanol Mærsk, a subsidiary of the world’s largest shipowner, A.P. Møller-Mærsk, has entered into a partnership with Reintegrate, a subsidiary of Danish renewable energy specialist European Energy, to supply it with zero-carbon green methanol. With a view to achieving carbon neutrality by 2050, Mærsk has chosen this fuel to power the eight container ships ordered from the South Korean shipyard Hyundai Heavy Industries, which are due to be delivered in 2024 at a cost of €1.4bn. The new ships, which can also run on conventional fuel, could reduce Maersk’s carbon footprint by 3%. However, this strategy is puzzling scientists: in addition to being twice as expensive to produce as traditional fuel, biomethanol is scarce and European Energy will not be able to provide enough fuel for Maersk’s future fleet. In the short term, the shipowner might be forced to use fuels from a fossil fuel-based power-to-Methanol process. Its French competitor CGA-CGM has opted for liquefied natural gas (LNG). Berlingske, Berlingske, Børsen, Les échos

Danish giant DSV Panalpina has completed the acquisition of Global Integrated Logistics (GIL)
On 23 August, Danish transport and logistics giant DSV Panalpina completed the acquisition of Global Integrated Logistics (GIL) from Agility Logistics, a Kuwait-based logistics company. The total purchase price was DKK 30 billion (€4 billion), which is one of the largest acquisitions by a Danish company to date. With the acquisition of GIL, DSV will reach a turnover of DKK 142 billion (€18.9 billion) and a total of 70,000 employees. DSV thus considerably strengthens its position and becomes one of the three largest transport and logistics companies in the world. It is also the third largest Danish company in terms of turnover, behind A.P. Moller-Maersk and Novo Nordisk. Børsen

Energy

Denmark extends its green energy collaboration to three new countries including France
Over the past decade, Denmark, which accounts for only 0.1% of global CO2 emissions, has chosen to pursue green energy collaborations with 16 countries, including the United States, China, India and Japan. Three new countries are stepping up their bilateral cooperation with Denmark in this area: Kenya, Poland and France. The Franco-Danish relationship will include "supporting the French authorities in developing and regulating the offshore wind market effectively". New Franco-Danish business partnerships are expected to emerge in the renewable energy market. As for the Danish authorities, they will share their historical, social and political experiences of so-called "green" energy.
KEFM

Vestas announces platform for suppliers and customers in the renewable energy industry
Vestas, the Danish wind turbine company which turnover reach ten billion euros, has announced that it will be setting up a platform for industry players in the renewable energy sector by the end of the year in Europe. Called Covento, it will replace the current platform, Shop.Vestas, and will house a digital aftermarket that will list products, spare parts and services from Vestas and third-party vendors. Vestas sees the secondary market for onshore and offshore wind, solar, storage and power-to-X as a "multi-billion euro" market opportunity. Schneider Electrics, a global leader in digital energy solutions, has already announced its presence on the future platform. Vestas’ goal is to deploy Covento in the US and Canada by 2022.
Windpower, News Cision

Employment

Record employment rate in Denmark raises spectre of overheating economy and labour shortage
On 20 August, the Danish Employment Minister, Peter Hummelgaard (Social Affairs), announced a record increase in new hires in May and June 2021 of 35,000 and 25,000 respectively (five consecutive months of increases). In July 2021, unemployment was at its lowest level since the beginning of the crisis, at 4.3%, below its structural level. With some experts fearing an overheating economy and a shortage of labour, Mr Hummelgaard stressed the need to train workers in construction and industry. These two sectors, together with trade, communication & IT and business services, have accounted for 90% of new private recruitment since October 2020. According to the Minister, an increase in the level of training would indeed facilitate the matching of demand and supply of labour, deteriorated by long-term inactivity linked to the COVID-19 crisis, and would reduce some frictional unemployment. Although the situation is not considered "worrying", the government has nevertheless called the social partners and the municipalities (KL) to discussions on labour shortages, which are weakening the recovery potential of the Danish economy. Mette Frederiksen outlined a package of reforms designed to increase the supply of private jobs in the short and long term. In particular, she announced a reduction in benefits for young graduates and encouraged them to "take the first job offer" that comes their way. Finans, Berlingske, Politiken

The number of civil servants in Denmark exceeds all expectations
The end of August was marked by the record number of civil servants in Denmark: 862,000 in September 2021 according to the Ministry of Finance. This news has provoked the ire of private employers who believe that this means fewer hiring opportunities for their sectors, which are suffering from a marked labour shortage. The public sector is a major contributor to job creation: 44,492 more public employees were counted in June 2021 than in February 2020. Danish civil servants now account for 29% of the country’s workforce, a figure that has risen due to government hiring to cope with COVID and the vaccination campaign. Nicolai Wammen, the Danish Finance Minister, believes that all these jobs will naturally spill over into other sectors, notably the hotel and restaurant industry. As a reminder, French civil servants represent 14.5% of the active population, i.e. 3.8 million permanent government employees. Børsen

Environment

Danish and international companies launch CO2 storage project under the North Sea
A consortium of 29 Danish and foreign companies are launching the GreenSand Project, which aims to harvest CO2 from Denmark’s largest emitters and store it in depleted oil and gas reservoirs under the North Sea. Once the system is developed and implemented, it will be able to store around eight million tonnes of CO2 per year. To finance a first version of the solution, the consortium will rely on a state loan of almost DKK 200m (€27m). In addition to this, the member companies will themselves inject DKK 300 million (€40.5 million). While CO2 Capture Storage (CCS) is an effective and secure solution, it is not sufficient to achieve the Danish target of 70% reduction of CO2 emissions by 2030. Moreover, there is still uncertainty about its profitability in view of the evolution of the carbon price and the subsequent investment of DKK 16 billion (€2.13 billion) over 20 years announced by the Danish government. Finally, many similar competing projects are underway abroad, such as Northern Lights, which is 80% financed (€650M) by the Norwegian government.
Finans

Two new generation sorting centres to open in Denmark by 2022
Europe’s two largest electronics sorting centres will be built in Denmark in 2022 - one in the west by Hansen Recycling, the other in the east by Stena Recycling. The result of an initiative involving 900 Danish producers led by a non-profit organisation, Elretur, these centres will collect and repair 3,500 tonnes of so-called "white" products (compared to 500 currently) out of the 39,000 tonnes per year. This green initiative is in line with the evolution of European and national regulatory frameworks for sorting, managing unsold goods and programmed obsolescence, which the Danish business community welcomes well. There is not only an ecological but also an economic interest in sorting electronic products. These centres will allow chips, precious metals and rare earths to be recovered and reintegrated into the production cycle. The whole products will be returned to the market under guarantee. Berlingske, Børsen

Dernière modification : 17/09/2021

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