Invest in Peru

Invest in Peru
The Chinese General Chamber of Commerce
22th October 2008
Ambassador Jaime Pomareda
INVESTMENT
OPPORTUNITIES IN
Consul General of Peru in Hong Kong and Macao
PERU OFFERS:
Basic macroeconomic equilibriums
Inflation between 1,5% and
3,8% in the last 7 years.
Forecasted Fiscal Surplus 2%
GDP Growth of 8% for 2006 and
expected to be close to 8% for
the next years.
Globalized Economy with access
to regional commercial blocks.
CAN, APEC, Mercosur, EU and
USA, (Annual US$ 38 Bil.)
Investment climate and policies
stable and based on
international principles.
Legal Stability
32
International
Agreements.
Important role of investments in
Peru´s Economic Growth
From 9.1% of GDP in 2004 to
20.1% in 2006
Investment
Sustainable economic growth with annual forecasted
rate greater than 8%
Peru
8
8,03
(Annual variation %)
GDP Growth
6,4
6
5,2
5,2
3,9
4
Developed
2
World
0
80
82
84
86
88
90
92
94
96
Source: International Monetary Fund and the Central Reserve Bank of Peru.
*Forecasted by Central Reserve Bank of Peru (9th February 2007), Ministry of
Economy and Finance and the National Institute of Statistic and Information.
98
00
02
04
06
Annual Exports growth greater than 30%
Accompanied by private
investment growth
(average annual % variation)
23 750
22 000
25.0
0,7
0,6
17 336
0,5
17 000
6 955
7 026
7 714
7 000
9 090
41%
20.0
Private
Investment
15.0
0,4
12 809
12 000
Private Investment grew
20,1% in 2006*
35%
37%
0,3
10.0
0,2
5.0
18%
0,1
10%
1%
2 000
2000
2001
0
2002
2003
Exports in millons US$"
2004
2005
0.0
2006
% Exports Growth (base 2000)"
-5.0
Source: Central Reserve Bank of Peru.
* Forecasted
06
05
04
03
02
01
-10.0
During the last 5 years (2001-2007)
621 new products were exported
29 new markets
2,093 new enterprises
Source:
Source: SUNAT
Rise in the commercial
exchange
Increase in the imports of capital
Goods
(Millions of US$)
( Millions of US$)
40 000
4500
35 000
4000
30 000
3500
3000
25 000
2500
20 000
2000
15 000
Capital goods for
the Industry
1500
10 000
1000
5 000
500
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Total Exports (US $ mill.)
Total Imports (US $ mill.)
Source: Central Reserve Bank of Peru.
Transport Equipment
Others
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Peru is progressively reducing its
fiscal deficit
By increasing its central government
tax revenues
(% of GDP)
2,5
2,5
14 000
13 134
12 123
2,0
12 000
0,3
31,1%
1,5
10 247
8 915
8 038
0,5
0.0
8 000
6 968
7 501
7 696
0,15
18,3%
7 821
14,9%
0,1
14,0%
0,0
0,05
6 000
7,7%
-0,5
-0,4
-1,0
1,6%
0
4 000
-0,05
-0,1
-1,1
-2,0
-1,7
-2,5
-2,5
-2,3
-13,3%
-0,15
0
-0,2
1998
1999
2000
2001
2002
2003
2004
2005
Central Government Tax Revenues (in US$ MM)
% Annual change in the Central Government Tax Revenues
-3,0
-3,5
2,6%
2 000
-1,5
-3,3
2000 2001 2002 2003 20042005 2006 2007*
Source Central Reserve Bank of Peru.
* Forecasted by the Ministry of Economics and Finance
0,25
0,2
10 000
1,0
0,35
Source: SUNAT
2006
17 275
18 000
0,5
0,45
16 000
14 097
0,4
12
681
14 000
0,35
12 000
9 598 10 194
0,3
10 000 8 180 8 613
22,5%
0,25
8 000
0,2
24,4% 11,2%
6 000
0,15
11,4%
6,2%
4 000
0,1
2 000
0,05
5,3%
0
0
2000 2001 2002 2003 2004 2005 2006
Net International Reserves (in US$ Millions)"
The careful and responsible management of our
economic program has allowed us to keep our
country risk index among the lowest in the region.
350
JP Morgan Index EMBI+**
(Milions of dollars
Net International Reserves
With increasing Net International
Reserves that represent more than 12
months of imports
EMBI+ Peru
Latinamerica
300
250
200
150
100
Nov- Dic-05 Feb- Mar- May- Jul-06 Ago- Oct-06 Dic-06 Ene- Mar05
06
06 06
06
07
07
Annual Variation
Updated 23 March, 2007
Source: Central Reserve Bank of Peru.
Source: Bloomberg
Peru offers a favorable legal framework for foreign
investment ...
Non discriminatory treatment.
Irrestrictive access to most economic sectors.
No performance requirements.
Free transfer of capital.
Free competition.
Guarantee for Private Property
Freedom to purchase stocks from locals.
Freedom to access internal and external credit.
Freedom to pay royalties.
Network of investments agreements and member of ICSID and MIGA
Stable tax regime
Reduced tariff structure and low tariff dispersion
Legal Framework: Constitutional provisions, “Law for the Promotion of Foreign Investment”, Legislative Decree N° 662,
“Framework Law for Private Investment Growth”, Legislative Decree N° 757, “Law for the Promotion of Pr ivate Investment
in Infrastructure and Public Service Works”, Approved by Supreme Decree N° 059-96-PCM
Free market access
to:
Andean
Community
of
Nations
Chile
MERCOSUR
Mexico
United States
European Union
Thailand
Trade Promotion Agreement with Singapore
under negotiations
Peru has concluded the
negotiations for the
Trade Promotion
Agreement (TPA) with
the United States, and
started in 2008
negotiations for a FTA
with China
Companies from all over the world are already investing in Peru
• Telefónica de
•
•
•
•
•
•
•
•
•
•
•
•
•
España
Banco Bilbao
Vizcaya
Endesa Desarrollo
S.A.
Repsol – YPF
Melia
BHP
Firth Ind.
NZ Dairy Products
Mount Isa Mines
Newcrest
Shougang Corp.
Marubeni
Matsushita
Mitsui
•
•
•
•
•
•
•
•
•
•
•
•
Honda Motor
Daewoo Corp.
Mitsubishi
SK
Falabella
Ripley
Mantos Blancos
Empresas
Pizarreño
Empresas
IANSA
Costa S.A.
Noranda
Teck Corp.
•Cominco
•HydroQuebec
•Barrick
•Newmont
•Cyprus Minerals
•Nextel
•Citibank
•Duke Energy
•PSEG
•Entergy
•Aguaytia Energy
•Cargill
•Kraft Perú
•Procter & Gamble
•Kimberly Clark
•Group Mexico
•Group Portales
•Group Bimbo
•Zeta Gas
•Nestle
•Asea
•Brown Boveri
•Aventis
•Saint Gobain
•Sodexho
•Schneider Electric
•Pechyney
•Degrémont
•Holbah II Ltd.
•Shell
•Stet Mobile
•Adrien
Including some of the major international firms
Advantages of the Agribusiness and Agro exporter sector
84 green zones of the total 104 worldwide.
8 million hectares of fertile lands.
Because is located in the southern hemisphere
has access off season windows in the most
important markets at premium prices (USA, Europe, Asia)
Non traditional agribusiness exports with 19% growth rate (2006*).
1st in world’s productivity of mango,
asparagus and sugar cane,
among the first ten in grape, avocado and coffee
1st world exporter of asparagus and dried paprika.
700
600
500
400
300
200
100
0
1997
1998
Mango
Skilled workforce available.
1999
Paprika
2000
2001
Avocado
2002
Grape
2003
2004
Artichoke
2005
2006
Asparagus
Advantages of the Fishing & Aquaculture sector
8 million MT per year of exploitable biomass.
1st world producer of fishmeal (2 two million Ton per
year since 1993) and fish oil (150,000 Ton per year).
FishMeal Exports (in millions of US $)
Oil Fish Exports (in millions of US$)
One of the richest seas of the world home for more than
2,500 species.
1 400 000
160 000
1 200 000
140 000
120 000
1 000 000
100 000
800 000
Wide variety of microclimates allowing development of
many fishing and aquaculture species.
80 000
600 000
60 000
400 000
81% useful species could be processed and traded.
Main species:
anchovy, sardine, hake, eel, horse mackerel,
squid, octopus.
king prawn, scallops, trout, great potential of
Amazonian species and ornamental fishes.
200 000
20 000
0
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
40 000
Advantages of the Mining sector
1st producer of gold, zinc, tin and lead in Latin America, 1st producer of silver, and third in
copper in the world.
Different projects ready to be transferred to private investors, i.e. state mining project just
awarded in concession: Michiquillay (US$ 450 Million)
Foreign investors have achieved internationally recognized results (e.g. Alto Chicama prize
PDAC – Prospectors and Developers Association of Canada, for the best discovery in the
world).
Peru has received investments of US$ 1.3 billion (1992-2005), and additional investment
commitments for US$ 6.6 billion.
High potential in the non-metallic mining industry in: common salt, phosphates, diatomite,
pyrites, kaolin, pyrophilite, baritina, dialomite and clays.
Peru ranks among the most attractive countries , related to geological potential.
Mining Sector Advantages
Production Ranking 2006
Latin America
Worldwide
Copper
2
3
Gold
1
5
Zinc
1
3
Silver
1
1
Lead
1
4
Tin
1
3
Molybdenum
2
4
Bismuth
2
3
Tellurium
1
2
Peru has an outstanding
competitive position in worldwide
mining, leading this sector in Latin
America
Mining exports
(US$ million)
Source: Ministry of Energy and Mining of Peru
Molybdenum production has
•
risen by 28% in 2005, and it became
the third export metallic mining
product (US$100 million/month)
Bismuth production totaled
•
1000 MT and Tellurium
production 28 MT, in 2005.
14 716
14 000
12 000
9 760
10 000
7 124
8 000
6 000
4 000
2 731
2 747
3 008
3 220
1997
1998
1999
2000
3 205
2001
3 809
4 690
2 000
0
Source: Central Reserve Bank of Peru
2002
2003
2004
2005
2006
Mining Sector Advantages
Mineral
Cooper
Gold
Zinc
Silver
Lead
Iron
Tin
Molybdenum
Others
Total
Exports (In US$
millions)
2005
2006
%
3 360,30
3 165,50
805,1
280,6
491,4
216,1
269,8
1149,4
21,2
9 759,40
79,6
27,9
147,3
70,6
45
18,5
23,1
-27,1
13,6
50,8%
6 034,40
4 048,30
1 991,30
478,6
712,6
256
332,1
838,3
24,1
14 715,70
Source: Central Reserve Bank of Peru
In 2006, Peruvian mining exports
grew more than 50% .
Almost US$ 2 billions of Zinc were
exported.
Ranking of mining exporting companies –
2006
( over 500 millions exports)
Company
US$
Millions
1
Southern Peru Copper
Corporation
2 837
2
Compañía Minera Antamina S.A
2 805
3
Minera Yanacocha S.R.L.
1 615
4
Doe Run Peru S.R.L.
1 016
5
Minera Barrick Misquichilca SA
990
6
Bhp Billinton Tintaya S.A.
554
7
Sociedad Minera Cerro Verde
S.A.A.
534
N°
Source: ADEX Datatrade
Advantages of the Textile Sector
High quality of Peruvian Pima cotton.
1st producer of fine Alpaca and Vicuna fiber.
Highly competitive products based on quality.
Development of a Peruvian textile chain enabling rapid service to “full
package” orders.
Opportunity to benefit from the ATPDEA – Andean Trade Promotion and
Eradication of Drugs Act / Free Trade Agreement, to enter the USA apparel
market.
High skilled employees, monthly wages from US $ 130 to US$ 300
Export growth from US$ 400 mil. (1995) to US$ 1.4 Billion in 2006
Peruvian companies are producing for prestigious labels such as…
- Abercrombie & Fitch
- New Balance
- Adolfo Dominguez
- Ara Intersales – TNS Mills
- Armani Exchange
- Calvin Klein
- Cole
- Donna Karan Inc.
- Duck Head Apparel Co.
- Eddie Bauer
- Guess
- Inditex / Zara
- Izod
- JC Penney
- J. Meneses Group Inc
- Massimo Dutti
- Nautica
- Lacoste
- Lands End
- Levy Strauss and Co.
- Oakley
- Palacio de Hierro
- Paul Davril Inc. / Kenneth
- Perry Ellis International
- Polo Ralph Lauren
- Ragman
- Reebok
- Russel Corporation
- Saks Inc.
- The Gymboree Corp.
- Tommy Hilfiger
- Vanity Fair
Advantages of the Forestry sector
Forest Reserves of 53.5 million hectares.
6 million hectares for reforestation.
Seventh biggest forestry reserve in the world.
High quality woods: mahogany (sweitenia macrophylla), tropical cedar
(cedrela odorata), and cumula (virola sp.)
Forestry concession process.
Forestry potential. Possibility to increase by 17 times the current supply of
wood.
Forestry exports have increased from US$ 26 MM in 1996 to US$ 168
MM in 2005. This shows a growth rate of 26% per year the last 9 years.
Peru has potential to export US$ 3 bn per year in woods and by-products.
Investment
Opportunities
in Infrastructure
Chachapoyas
Paita Port T.
Piura
EPS Grau
Cajamarca
Road infrastructure
Airports
Salaverry Port T.
Pucallpa
Chimbote Port T.
Ports
Telecommunications
IIRSA Center Branch
Road Network 4
Puerto Maldonado
Hydrocarbons
Regional Pipelines
Supply driking water for Lima
Interocean Road
Corridor
L.T
Machupicchu Cotaruse
Sanitation
Energy
Cusco
Pisco Port T.
Costa - Sierra
Nazca
Ayacucho
Arequipa
Juliaca
Ilo Port T.
Tacna
Investment Opportunities in Airports
PROJECT
Province Airports- Second
Group (6 airports Tacna,
Juliaca, Arequipa, Puerto
Maldonado, Ayacucho and
Nazca)
Total Estimated
Investment (US$ MM)
ESTIMATED
INVESTMENT
(US$ MM)
AWARDING TERMS
150
III Q 2007
150
Investment Opportunities in Port Terminals
PROJECT
Port Terminals (Muelle
Minerales en Callao, Paita,
Salaverry, Chimbote, Ilo,
San Martín Yurimaguas,
Iquitos, Pucallpa, etc)
Total Estimated
Investment (US$ MM)
ESTIMATED
INVESTMENT
(US$ MM)
321,2
AWARDING TERMS
I Q 2008, III Q 2007 Iquitos
and Pucallpa. Yurimaguas
and Minerals Ports to be
defined
321,2
Investment Opportunities in Hydrocarbons
ESTIMATED
INVESTMENT (US$
MM)
AWARDING TERMS
Gas Pipelines for transport
of Natural Gas to Ayacucho,
Ica and Junín.
200
III Q 2007
Pipeline to transport GLP and
Diesel from Pisco and Lurin
60
III Q 2007
PROJECT
Total Estimated
Investment(US$ MM)
260
Investment Opportunities in Telecommunications
ESTIMATED
INVESTMENT
(US$ MM)
AWARDING TERMS
200
II Q 2007
Mobile Telecommunication Band B
80
II Q 2007
Wide Rural Band (Access to Internet, public
telephony and residence telephony in 3 010
cities and 6 Regions (22 Departments).
17
II Q 2007
Rural Telecommunication Rural Internet
(access to Internet for 1,050 rural towns)
9
II Q 2007
PROJECT
Mobile Telecommunication Band D and E
Total Estimated Investment (US$ MM)
306
Investment Opportunities in Sanitation
ESTIMATED
INVESTMENT
(US$ MM)
AWARDING TERMS
Sanitation services in
Piura
and
Paita
provinces (water and
sewage services)
290
III Q 2007
Supply
for
drinking
water for Lima (30 year
concession)
286
IV Q 2007
PROJECT
Total Estimated
Investment (US$ MM)
576
Investment Opportunities in Agriculture and Energy
PROJECT
ESTIMATED
INVESTMENT (US$ MM)
AWARDING TERMS
Majes- Sigüas ProjectSecond Stage (water,
water ussage, sale of
lands,
hydroelectrical
development)
260
IV Q 2007
Transmission Line Machu
Picchu
–
Cotaruse
(conditioning of national
electric grid in South Peru)
42
III Q 2007
Total Estimated
Investment(US$ MM)
302
Advantages of Tourism Sector
Cultural and historical wealth and great biodiversity, which makes Peru a special
place in the world.
High potential to generate investment oriented to expand tourism services.
Possibility in developing private investment not only in tourism infrastructure, but also
in providing traveler services.
Peru is promoting the northern tourist circuit which offers new investment
opportunities.
Important increase of foreign arrivals (1.7 million in 2006, 3.7 projected for 2013)
Peruvian gastronomy is one of the most delicious and varied in the world.
Investment Opportunities in Tourism
ESTIMATED INVESTMENT
(US$ MM)
AWARDING TERMS
Playa Hermosa- Tourist
complex (70 Ha. Tumbes)
27
To be defined
Civic and Trade Center of
Lima (Operation of 120,000
Sq. Mt. FOR 20 YEAR)
20
III Q 2007
Chaco – La Puntilla Tourist
Complex (Paracas)
7
II Q 2007
System of Cable Transport
Tingo – Kuelap (Cable car)
6,5
IV Q 2007
Quistococha National Tourist
Park
(trasformation
in
Amazonian Theme Park)
5
IV Q 2007
PROJECT
Total Estimated
Investment (US$ MM)
65,5
Invest in Peru
The Chinese General Chamber of Commerce
22th October 2008
Ambassador Jaime Pomareda
Consul General of Peru in Hong Kong and Macao
INVESTMENT OPPORTUNITIES IN