With war dragging on in Ukraine, German companies may be looking to redirect their supply chains toward more reliable, stable markets.
That makes it a great time to reinforce transatlantic friendships exemplified by North Rhine-Westphalia‘s trade and investment office officially opened in Atlanta Wednesday, officials said during an opening ceremony long delayed by COVID-19.
“This war will lead to a reorientation for many German businesses,” said Felix Neugart, CEO of NRW.Global Business, the state’s investment and trade arm. The organization boasts 17 global offices including three in the U.S.: Chicago, San Francisco and now, Atlanta.
Russia’s invasion of Ukraine, which has led to energy price hikes and sourcing hiccups for German firms, is coming on top of the existing factors pulling them into U.S. market, Mr. Neugart told Global Atlanta in an interview at the Metro Atlanta Chamber just before a packed event that highlighted a German state pitching itself as “Europe’s Heartbeat.”
“There has already been interest, and this has been increased and propelled” by the focus on infrastructure spending, Mr. Neugart said. “Then you have the issue of supply chains, which was there before through COVID and through this Russia crisis has been again at the forefront of challenges for companies. There is huge potential for mutual economic cooperation in terms of investment and trade, and this requires, at least in my view, a direct connection.”
While it mainly focuses on wooing companies in the Southeast U.S. to North Rhine-Westphalia, the state doesn’t shy away from helping its own companies set up shop abroad to sell their products and services
“We believe it’s two sides of the same coin. It’s not like outbound investment is bad, inbound investment is good — this is not something that we subscribe to. We believe that it’s about creating partnerships, and then it works both ways,” Mr. Neugart said.
Georgia takes a similar approach, operating offices abroad that promote exports, market its tourism assets and recruit investment — a prime example being its European office in Munich.
Perhaps NRW’s collaborative spirit comes from having undergone a decades-long shift from heavy industries like coal, steel and chemicals toward innovative sectors that depend on research fueled by 68 universities with 760,000 students — including 30,000 STEM graduates per year.
The state was also formed 75 years ago in the aftermath of the Second World War, bringing together three regions that hadn’t previously been connected at a time when Germany had to rebuild its economy and reorient toward the world.
“It is born with a spirit of free world trade and is the spirit of the free world, and it has been born at the beginning of a period of economic growth, of high standards of living and peace,” said Johannes Velling, head of digitalization and foreign trade for the NRW Ministry of Economic Affairs.
That sentiment is once again relevant today, as Europe is once again facing war, Mr. Velling told the audience.
“It is the right time to build bridges over the Atlantic, to build bridges between the U.S. and Europe, between Georgia and North Rhine-Westphalia, between Atlanta and Düsseldorf,” said Mr. Velling. “German companies right now in Russia and in Ukraine are shut down, and they will redirect that business to countries where we have reliable partners.”
North Rhine Westphalia (Nordrhein-Westfalen in German) is located in the west of the country bordering the Netherlands and Belgium. With about 18 million people, it is both the most densely and heavily populated state in Germany. It’s also home to the Rhine-Ruhr region, a metropolitan area comprising cities like Bonn, Cologne, Düsseldorf, Essen, Duisburg and others across a 100-mile span. Taken as a mega-city, it would be the third largest metro area in Europe after Paris and London (barring cities in Russia).
NRW’s diversified economy and diverse population, underpinned by a strong educational community and a growing tech sector, will feel familiar to Georgians, Mr. Neugart said, noting that these synergies drove the decision to focus on Atlanta as its beachhead in the Southeast. Complementary sectors include agriculture, high-tech, food processing, energy and biotechnology, a segment where the NRW delegation had held meetings with industry associations earlier in the day.
“There’s never a 100 percent match,” Mr. Neugart said. “But there are many, many connection points.”
Those include industry ecosystems focused on cybersecurity in Bochum and Bonn, manufacturing in Aachen and a statewide focus on hydrogen and electric-vehicle battery technology in Münster, where 700 million euros in federal and state funding has flowed toward a battery production research center.
Touchpoints also include companies like TKE, the former Thyssenkrupp Elevator, an NRW-based firm that recently unveiled its new headquarters and test tower in Cobb County, as well as RWE Group, an energy innovator which once produced wood pellets in southern Georgia and in 2019 inked a power-purchase agreement with Georgia Power for an 1,800-acre solar plant and storage project south of Albany.
Other NRW investors in Georgia include GEDIA and KIRCHHOFF in the automotive sector and Kloeckner Metals, the Roswell-based U.S. subsidiary of steel supplier Klöckner & Co SE, which hails from Duisburg. The trade flows in both directions: 20,000 foreign companies make their home in NRW, including 1,900 from the U.S.
Melanie Moltmann, the consul general of Germany for the Southeast in Atlanta, said she’d spent a decade in NRW as a child, a state that reminds her of her new home in Georgia in the way it blends industrial centers with bucolic rural areas. They also complement each other in providing stellar support to inbound investors, Ms. Moltmann said.
“This is the place to be,” she said of the Southeast U.S. “I’m a bit biased, being posted here to Atlanta, but what I can say is that doing business here for German companies is rewarding, profitable and relatively easy — I say ‘relatively’ because it’s not always the easiest thing to go abroad and start your business.”
Daniel Dueren, the NRW.Global Business office lead in Atlanta, said he has already found 10-15 companies interested in expanding into NRW since he began building relationships eight months ago. Three of them gave brief pitches at the event — oil absorbents provider Green Boom, coal ash cleanup company Upshots (both based in Georgia) and Boston-based battery materials company 6K Energy.
The Atlanta delegation included officials from the city of Düsseldorf, which along with Mr. Neugart and representatives from the NRW state government met with Delta Air Lines in hopes of persuading the airline to restart the nonstop flight linking Atlanta with the German city.
—
Learn more about NRW.Global Business here.
Contact Mr. Dueren at daniel@nrwglobalbusiness-usa.com
The Pendleton Group is the presenting sponsor of Global Atlanta's Economic Development Channel. Subscribe here for monthly Economic Development newsletters.
