INVESTMENT OPPORTUNITIES

INVESTMENT OPPORTUNITIES
MINISTRY OF TRADE & INDUSTRY
Why Invest in Panama
• Dollar as legal tender since 1904.
• There are no exchange controls or restrictions on the free movement of
currency.
• No restrictions for foreigners purchasing properties.
• Infrastructure projects in process.
• Qualified and available labor force.
• Best credit access country in Latin America.
• International credit institutions qualified Panama's credit ratings as BB+
and Ba1 (2006).
• FTA’s open new business opportunities
Solid Economic Growth
• The Foreign Direct Investment publication mentions Panama as the
country with best economic potential for the year 2007.
• 2006 was the 4th consecutive year of robust growth.
• Panama has been qualified as the No.1 country with lower costs of living,
according to ECLAC, and lower operating costs for companies.
• Panama is covered by OPIC, MIGA, IDB among others.
• Treaty for the Promotion of Commerce (TPC) with the United States. Free
Trade Agreements with Singapore, Taiwan, El Salvador, Chile and
Honduras. Finish negotiations with Guatemala, Nicaragua, Costa Rica.
•New negotiation with: European Union, Caricom, Canada.
GROWTH OF
GDP OF PANAMÁ
Solid Economic Growth
11.2%.
8.7%
7.2%
2004-2005
2005-2006
GDP economic growth (2007)11.2%
Perspective of growth for 2008 between 9% & 11%
GDP US $16,966.1 B (Dec. 2007)
GDP per capita US $5,080 (Dec. 2007)
Inflation (2007) 6.1%
Average 5 year period less than 2.5%
•
•
•
•
•
•
2006-2007
Construction Boom
Increment of our exports
Strong public finances
Investment Climate
Turism
Comunications
Gross Domestic Product
10.6%
10.0%
10.2%
Agriculture
Manufacture
Services
Other industries
69.2%
Source: Comptroller General’s Office.
Canal 6%
Ports 1.4%
Economic Drivers of Panama
Drivers
The Real Estate Market
Construction
Overview
Transportation, telecomm.
Financial intermediation
Rentable
Area (M2)
Vacancy
Rate
%
Gross
Return %
Office Market
318,830
9.10
13.04
Commercial Market
610,319
0.85
12.99
Industrial Market
570,000
7.00
13.12
High-end Residential
Market
811,500
3.04
11.01
Hotels and restaurants
Wholesale and retail commerce
Manufacturing
Electricity, gas, water utilities
Agriculture, fishing
Government
3000
2
4
6
8.1
8
10 12 14 16 18 20
Panama Canal investment in Expansion
%
Foreign Direct Investment
18
16
14
12
10
8
6
4
2
0
FDI Million
2500
2000
1500
1000
500
0
2002
2003
2004
FDI
2005
%PIB
2006
% of GDP
-
Investment in Panama
ECLAC
Foreign Direct Investment
2004
2005
FDI reached US$2,560M in 2006,
2006
El Salvador
459
457
312
Honduras
293
190
300
Nicaragua
186
230
290
Guatemala
155
168
325
Costa Rica
557
609
1610
Panamá
1,012
1,027
2007 US$1,825
Foreign Direct Investment
2,400
2,560
Panama has positioned itself as the
No1. destination for FDI in the region
517
1999
The FDI in Panama has been the
highest in Central America and the
Caribbean together in 2006
792
393
2000
1,012
1,027
2004
2005
99
2002
2003
2006*
Fuente. Contraloría General de la República. * Datos estimado en base a inversiones observadas
Solid Economic Activities
International Banking System
 Dollar as the legal tender
 Average Inflation rate in last 5 years
2.5%
More than 87 banks with assets of
US$68,742 M (Dec.2007)
Colon Free Zone
1680 acres and expanding
250,000 annual visitors
2,462 companies (2007) –
International Commercial Exchange of
US$16,159 M (Dec.2007)
Logistics Platform and Connectivity
Bermuda
Miami, FL
Mexico
Belize
Bahamas
Puerto Rico
St. Croix
Curaçao
Aruba
Venezuela
Colombia
Cayman Is.
Ecuador
Brazil
Maya 1
Most globalize economy of the
region. Global Chronicle.
Peru
Bolivia
Arcos 1
SAC
Paraguay
MAC
Pan American
ArgentinaUruguay
• Access to 144
maritime routes with 80
destinations.
• Transit of +14,000
ships
Connectivity as efficient as in New York
city.
Routes that pass through the canal
Logistics Platform and Connectivity
Modern port
infrastructure
movement of 4
million TEUs 2007
• COPA Airlines HUB of the
Americas that transports
cargo and passengers to 21
countries and more than 40
destinations with 134 daily
flights.
• Most modern and newest
fleet of the Continent
• Modern airport
infrastructure.
The connectivity contributes to a
more competitive and efficient
system.
• Daily cargo and
passengers movement.
• Container movement
capacity of 1M TEUs yearly
• Serves as a dry canal.
Port System
International Companies that have port concessions:
•Manzanillo International Terminal (MIT) Stevedoring Services of America– Atlantic
•Colon Container Terminal (CCT) Evergreen – Atlantic
•Panama Ports -Balboa Terminal Hutchinson Wampoa’s - (PPC) –Pacific
• (PPC)- Port of Cristobal –Atlantic
•Total movement in 2007 more than 4.1 M teu`s
Successful negotiations for the port expansion for $1,500 MM in investment,
to raise the capacity to 9MM Teus
FUTURE PROJECTS
Construction of a new port in the Pacific by Port Singapore Authority (PSA) starting in 2008 with a
capacity of 450,000 teus
Panama as a Home Port for Cruise Line Royal Caribbean in Dec. 2008
Connectivity of the Canal
Bremerhaven
Tilbury
Felixstowe
Rotterdam
Osaka
Hamburg
Nagoya
Dunkerque
Thamesport
Halifax
Shanghai
Zeebrugge
Seattle
NJ/NY
Kwangyang
Tokyo
Qingdao
Wilmington
Le Havre
Pusan
Shimizu
Newport News
Antwerp
Oakland
Keelung
Charleston
Baltimore
Port Said
Yantian
Miami
Savannah
Yokohama Los Angeles
Hong Kong
Everglades Marseilles
Kobe
Long
Beach
New
Orleans
Colombo
KingstonColon Container
Hakata
Terminal
Chabang
Veracruz
La Spezia
Kaohsiung
Manzanillo (Mx)
Manzanillo
.
Buenaventura
Tanjung Priok
Puerto Limón
Balboa
Doniambo
Guayaquil
Callao
Manta
Arica
.
Singapore
Tahiti
Iquique
Brisbane
Coquimbo
Sydney
Antofagasta
Valparaíso
San Antonio
..
.
Auckland
Melbourne
San Vicente
Free of Natural Disasters
Hurricane map of the region.
• No hurricanes
• No seismic movements
• No volcano activity
Investment Opportunities and The Panama
Canal Expansion
Due to the Grown International
Demand
More Panamax ship to be used in the Canal
THE PROJECT
Third Set of Locks and Vessel Dimensions
Existing Lock
New Lock*
12,000
Chamber Length 305m (1,000’)
Vessel Beam 294.3m (965’)
Chamber Length 427m (1,400’)
Vessel Beam 385.8m (1,265’)
*These dimensions were defined for a typical 8,000 TEU vessel
*Courtesy of
OPPORTUNITIES IN THE ENERGY SECTOR
Investment Opportunities: Energy
Sector
Hydro generation
Bioenergy
Refineries
Guajira
Cartagena
Tank storage
Panama will become
a regional energy
hub
Colon
Gas Interconnection
Legal Framework: Oil Free Zones
• Panama has successfully implemented an attractive
promotional tax regime for the establishment of Oil Free
Zones within its territory that has been in place since
1987
• Companies already doing business in 7 petroleum free
zones include Exxon/Mobil, Shell, PIMPSA,
Chevron/Texaco, Glencore and others.
• The highlights of the regime include the exemption of
every tax, tariff, contribution, duty or toll caused by the
import, export and re exportation of crude oil and its byproducts to or from the free zone.
Conclusion: 0 taxes for investors
Project of Gas Pipeline
Guajira
Cartagena
Colon
-Gas Pipeline between Colombia and Panama
• Inclusion of Venezuela
• Demand studies for Panama of 150 MDCF
Locations for Refineries
.
1-MaríaChiquitaCentro Energético
2- Puerto
1-Armuelles
Armuelles
1- Location: Maria Chiquita – Colón Province (Atlantic).
Developer: Centro Energético de Las Américas
2- Location: Puerto Armuelles – Chiriquí Province (Pacific)
Private Developer
Puerto Armuelles
• Existing Facilities:
PTP Pipeline
– Only transistmical pipeline in the area
with an extension of 131km.
– Throughput capacity of 800MBD
– Storage capacity of 2.9MB on each
side.
.
Puerto Armuelles
Natural deep water port in the region,
with a water draft of 80¨ feet
Berths with capacity for VLCCs of 320,000 DWT
with 2.3MMBBl
Centro Energético de Las Américas
in María Chiquita, Colón
.
Industrial Energy Park
Refining Capacity up to 250.000 bpd
LNG regasification plant up to 1.2 Bcf/d
Petrochemicals & chemicals
Ethilene and propilene plant
Services
Centro Energético de Las Américas
in María Chiquita, Colón
Industrial Park
.
Marine facilities (port, pipe-lines, buoys)
Centralized utility services: -water,
Tank farms
power, -hydrogen, -vapor.
Site and headquarter offices
fuel gas -waste treatment.
Warehouse and machine shop.
Training & amenity center.
Logistics and transportation .
resembling the
Jurong Park Concept:
Business Model:
Condominium
Investment Opportunities
Electric Energy
Electric Energy Opportunity
•
Installed Capacity

1,507.2 MW
» 845 MW (56%) Hydropower
» 662 MW (44%) Geothermal
•
Power Generation (gross)  5,576.6 GWh
»
»
»
»
2,823 (50%) Hydropower
2,753 (49%) Geothermal
Bunker
Diesel and Marine Diesel
•
Exports to Central America  178.94 GW (3.21%)
•
National Grid is connected to potential site
• There is a need of at least 200 MW to
supply local consumption by 2007
• In addition, several new megaprojects
will be in need of power supply
•Canal Expansion
•Mining Projects
• Port Development
As of today, energy is
as high as 13ct kw in
the spot market.
Electric Energy Opportunity
300
MW
ES
HO
300
MW
100.0
TICUANTEPE
• An electric energy
integration project that
begins in June, 2006.
CR
300
MW
CAÑAS
300
MW
NI
300
MW
PL.NI.
Line of 230 KV
between all countries
MODELO
ENERGÉTICO
GU
• Through SIEPAC,
Panama will have access
to Guatemala, Honduras,
El Salvador, Costa Rica
and Nicaragua.
PA
PARRITA
SIEPAC
Fecha
entrada:
Mayo
2007
RIO CLARO
VELADERO
CO
Operation of a wholesale power generation market.
Line of 1830km, with capacity for up to 300 MW
Possiblity to
export power to 5
countries.
Investment Opportunities
Mining
Deposit Information
•
Deposit potential 1,300 million tons of mineral rock with a medium grade of
0.76% copper, using a 0.4% copper cutoff grade.
.
•
Estimated reserves 24 billion lbs. of copper.
•
Mineralization Copper Mineral: Chalcopyrite, Other Minerals of
molybdenum, gold, and silver.
•
Deposit Description Typical copper deposit (porphyry) with a leached
surface, an oxidized enrichment zone, a supergenic enrichment zone and a
primary sulphide zone. The supergenic zone can be beneficiated by leaching
or by combined process. The rest of the deposit requires flotation.
•
Product Copper concentrate.
The Estimated Reserves are 24 billion pds of copper
Investment Opportunities
City of Knowledge, Panama-Pacifico
Special Economic Area an Reverted
Areas
Howard: Special Economic Area
Panama Pacific
The new urban and commercial district of
Panama
L&R signed a contract with GOP to be the Master
Developer of 2,750 acres in July, 2007.
Plans for Howard:
Investment of at least US405 M in the next 8
years and other $300M in the next 32 years.
Intermodal development for storage and
logistics that will connect a 8,500 f of landing strip
with the Panama Canal
Development of a scientific, industrial and
business parks
Call Centers
Developments of a urban, touristic, industrial
and commercial facilities.
20 to 25,000 employment
Reverted Areas
Reverted areas:
•
97 has. of available prime
land
•
7,000 buildings and
infrastructure next to the
Panama Canal.
•
The largest availability of
land for sale and rent.
City of Knowledge and the
Technopark
City of Knowledge
•
International complex for the
education, innovation, research
and development center.
•
Created
to
promote
the
installation of facilities that will
have synergy with International
Universities, Research Centers
and International Organizations.
•
Offers services to promote
technology transference, and
added value to national and
international businesses that will
supply advanced technology in
order to develop innovative
products or services that are
international in their projections.
MEGA PORT- FARFÁN-PALO SECO
Farfán Pacific Port - Palo Seco
The government has promote the design, construction, operation and
administration of the new port terminal in the Pacific entrance to the
Canal
The port will have an
approximate area of 112
hectares, including a wharf of
600 meters of length for 750
of width and with capacity for
the installation and operation
of 18 derricks size Post
Panamax.
Cosco Pacific Limited and Ports America Group initiated negotiations on the
development of a port of containers and it is estimated it will produce 3,370
direct employments. The first phase will have a capacity of managing of 1.7
million containers and final capacity of 7 millions.
Investment Opportunities
Construction
Construction
Construction Industry participation in the National
 GDP: 5% (2007)


2003
2004
2005
2006
2007(p)

(millions US Dollars)

883.4 473.8 931.0 1,007.5 1,302.9
 Growth up to December 2006: 8.2%
 Growth up to December 2007(p): 29.33%
 More construction in Panama in 5 years than in
Miami in the last 10 years.
 IPAT approved in 2007, 49 hotels projects for $664M
CONSTRUCTION
INDUSTRY
Construction
$1,261
$857,5
$932,8
2007
25.4% m ore than 2006
2005
2006
2007
More than 200 residential and commercial projects
Investments during 2007 exceeded $2 billion
Mortgage lending in 2007 reached $1 billion, which reflects the
granting of 25,000 mortgages.
The first trimester of 2008 US$ 357.8 M in construction permits
Investment Opportunities
TOURISM
Panama – Tourist Destiny
Panamenians Ethnic: Kuna Ayala, Embera Wounaan, Ngöbe Buglé,
Kuna de Madugandí, Kuna de Wargandí
Five indigenous regions
Panama – Tourist Destiny
Beaches
Historical landscapes
Flora and Fauna
Panama- Turistic Destiny
 Visitors entering Panama
January – December 2006 1,215,083 visitors
January – December 2007 1,428,395 visitors
In the year 2007, 213,312 visitors entered Panama, more that
in 2006 during the same period (January- December).
 Visitors entering Panama
Tocumen International Airport (MPTO) 948,946 visitors
Paso Canoa´s, Costa Rica border
113,069 visitors
Maritime Ports
366,380 visitors
Total:
1,428,395 visitors
 Global Occupation in the hotels: 85.75% (January-December 2007).
Nowadays 16.000 available rooms exist.
 2007-2009 Project of 15 new hotels (3,000 rooms).
Cleaning of the City and the Bay of
Panama
OBJETIVES PROYECT
– Desarrollar sistemas de recolección y tratamiento de las
aguas residuales de la ciudad de Panamá, con el fin de
eliminar los riesgos a la Salud, producto de enfermedades
de transmisión u origen hídrico.
– Recuperar y devolverle a la población, los ríos y
quebradas de la ciudad de Panamá, que actualmente
representan, además de un riesgo para la salud pública,
áreas malsanas y negativas para el desarrollo urbano y a la
calidad de vida de sus habitantes.
To recover the Bay of Panama in order to offer the world a better
image of a city and a country that grows with a view to the sea,
respecting the environment and natural resources.
Components of the Main Plan
2007 – 2016 $321M
•Compilation Sewer System: Networks, Collectors and minor Pump
Stations. $67M
•Transport Sewer System: Collectors and Major Pumping
Stations and drive line. $50millones.
•Treatment and Final Disposition Plant: Plant of waste water
Treatment in Juan Diaz. $156 Million.
•Rehabilitation of the Existing and Combined Sewer
System: Separation and construction of new sewer
collectors system. $18 million.
Road Infrastructure Development
Coastal Band - Avenue Balboa
Highway and Road Panama-Colon
Bridge on the Changuinola River
Road Infrastructure Development
Highway and Road Panama-Colon
Emblematic
projects
promoted by the
National
Government for
the development
of important road
infrastructures in
the Republic of
Panama, among
them the second
stage of the
Highway
Panama - Colon
for $ 215.8
million and a new
road of 70 km.
Bridge on the Changuinola River Provincia
of Bocas del Toro
This one is the
third largest
bridge
constructed in
the Republic of
Panama with a
length of 458
meters and to a
cost of $7 M
Dollars, of
major
importance
since it is the
principal entry
to Port
Armuelles., in
the Province of
Chiriqui.
Bridge on the Changuinola River Provincia of Bocas del Toro
The Coastal Band Project and
New Viability
INVESTMENT OPPORTUNITIES
COLLATERAL BUSINESS ACTIVITIES
RELATED TO THE NATIONAL ECONOMIC
DEVELOPMENT
Investment Opportunities
Construction cranes
Steel – 256,000 TM
Production and Installation of Asphalt
Stone and Rubble – 3.5M m3
Protection and security equipment
Cement – 1M tons
Investment Opportunities
Heavy equipment
Buying and renting cars
Fuel and Lubricants
Engineering Works
Repairs
Medical Equipment
Investment Opportunities
Security
Portable Bathrooms
Fumigation
Telecommunications
Waste Management
Training Services
Investment Opportunities
Reforestation
Restaurants
Hotels
Boat Rental
Housing
Marine communications
Equipment
MUSEUM OF BIODIVERSITY
Museum of Biodiversity
 Government supports this
project of scientific, cultural
investment.
 Center for the learning and
scientific exchange
 Center of promotion of the
biodiversity of Panama
 It will be a symbol of the
environmental protection
Designed by:
Frank Gery
New Project of Massive
UrbanTransportation System
Modernization of Urban Transportation
Transmovil
• Project
1,500 new buses for Panama City
to improve public transportation, avoid traffic
congestion, create more parking space, offer facilities for
pedestrians and disabled, installation of new intelligent
traffic lights and modern infraestructure.
• Approximate Investment: $220 millions
• Time: phases that go up to 18 months, starting 2009
• Initial Route: Via España and Transistmica
• Objetive: To satisfy the demand of 1,300,000 users
Masive Urban Transportation System:
Principale Routes
.
SAN ISIDRO
PEDREGAL
Three
principal
routes have
been
considered
for the initial
project.
CERVECERÍA
5 DE MAYO
Investment Legal Frame
Investment Legal Frame
•Regional HQ Law No. 41, August 2007
•Colon Free Zone Law No. 18, June 1948
•City of Knowledge Law Decree No. 6, February 1998
•Panama-Pacifico Special Economic Area Law No. 41, July 2004
•Export Processing Law No. 25, November 1992
•Call Center Law No. 54, October 2001
•Film Law No. 36, July 2007
•Legal Stability for Investments Law No. 54, July 1998
Prívate and Public Investment
Private and Public Investments
OXY-QP
AES
Harkem
Energías
Colon Free Zone
Howard
Estimated Port
Expansion:
400 M
Employment: 450
Hewlett Packard
Caterpillar
PSA
Megaport
Panama Ports Company
Gantrap
MIT
CEMEX
CCT
Free Trade Agreements
Free Trade Agreements
• FTA´s with: El Salvador, Taiwan, Singapore, Chile.
• Concluded negotiations with: USA, Honduras, Costa Rica,
Nicaragua and Guatemala.
• Future negotiations with: European Union, CARICOM (14
countries) and Canada.
THANK YOU!!!
Web: www.mici.gob.pa