Business Opportunities EMBASSY OF PERU Melbourne, 7 March 2013 1 - PowerPoint PPT Presentation

PERU: Business Opportunities EMBASSY OF PERU Melbourne, 7 March 2013 1

Business Opportunities in Peru ALABC- Melbourne 7 March 2013 1. Peru’s growth based on strong fundamentals 2. Investment climate 3. Prospects and Closing remarks

South America’s fastest growing economy GDP growth in last twelve years Peru Central Reserve Bank estimates Peru’s GDP growth for 2012 at 6.3% or higher, and forecasts GDP expansion for 2013 at 6,3%

Peru is the economy with the highest GDP growth in the region over the last decade

The Peruvian economy continues showing high growth rates. Per capita GDP in 2011 was 36% above the previous 1975 maximum Per Capita GDP (1975 = 100) 160 136 140 120 100 100 80 60 68 40 20 0 1991 2001 1951 1953 1955 1957 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1993 1995 1997 1999 2003 2005 2007 2009 2011

Investment in 2012 est. 26% of GDP Construction is booming in the Andean nation amid investment in mines, power plants, infrastructure and homes.

Peru well-placed in global economy

Poverty continues to decrease significantly & growth is boosting employment

Lowest annual average inflation rate in Latin America & constantly improving investment grade in the region INVESTMENT GRADE AA- AA- BBB Baa2 BB- Peru has obtained Investment Grade from the three main credit risk agencies: Standard & Poor’s, Moody’s and Fitch.

The Central Bank of Peru has accumulated international reserves as a precautionary measure & public sector has been, on average, in surplus in the last six years Source: Peru Central Reserve Bank – as of February 2012

A healthy debt level in relation with its international reserves

Business Opportunities in Peru ALABC- Melbourne 7 February 2013 1. Peru’s growth based on strong fundamentals 2. Investment climate 3. Prospects and Closing remarks

INVESTOR’S Peru occupies the second place in the region in the PERCEPTION Ease of Doing Business ranking, published by the World Bank. Doing Bussiness June 2012 Rank Country 37 Chile 43 Peru 45 Colombia 48 Mexico 124 Argentina 130 Brazil 139 Ecuador

Market expectations are in the optimistic range Sources: Apoyo & BCRP

Although at lower rates, imports have been growing at double digits in recent months

Friendly investment environment  Non discriminatory treatment.  Unrestrictive access to most economic sectors.  Free competition.  Free capital transfer.  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.  Peru participates in the Investment Committee of the OECD.

Announced investment projects amounts to US$ 35 billion for 2012-2013

Special Regimes: The Legal Stability Agreements The Peruvian Government grants Requirement: Minimum investment of US$ 5 million in any economic sector . US$ 10 million for hydrocarbon and mining sector. Validity: 10 years. Concessions:Term according to the contracts life (Max. 60 years).

"'In this world nothing can be said to be certain, except death and taxes“ B.F.

Business Opportunities in Peru ALABC- Melbourne 7 March 2013 1. Peru’s growth based on strong fundamentals 2. Investment climate 3. Prospects and Closing remarks

Located right in the middle of South America and the World, Peru has an strategic location that allows easy access to Southeast Asian markets and the United States. Also, as a member of the Asia-Pacific Economic Cooperation (APEC) and the Andean Community enjoys the advantages of being integrated to these markets. • Germany • Begium & Luxembourg • Denmark ASIA • Spain • Canada * • Finland • United States * ATLANTIC • France • Australia OCEAN • Netherlands • China * • Italy • Korea Peru has signed • Norway • Malaysia Bilateral Investment • Cuba • Portugal • Singapore * Treaties and Free • El Salvador • United Kingdom • Thailand Trade Agreements, • Czech Republic • Japan which consolidate • Romania our policy of • Sweden openness. Moreover, • Switzerland OCEANIA PERU Peru has signed • Argentina • Ecuador PACIFIC Double Taxation OCEAN • Bolivia • Paraguay Agreements with • Chile * • Venezuela Brasil, Chile and • Colombia Canada. * FTA A STRATEGIC LOCATION

Investment Opportunities:

Agri Agribu busine siness ss  Natural greenhouse.  Seasonal window in the most important markets.  Projections expect the 90,000 ha. currently used for agro exports to double as consequence of large irrigation projects in portfolio.  Over US$ 3 billion in exports of fresh and processed products to more than 113 countries.  Organic and natural products with high export value.

Fisheries  1st producer of fishmeal and fish oil in the world.  Extensive fishing coast and “water mirrors” that offer adequate conditions for the development of marine and continental aquaculture.  Distribution of Peruvian fisheries products to over 100 countries.  Trend towards product diversification.

Fo Forestry restry  Great biological diversity and highly valued timber.  78, 8 million ha. of natural forests.  2nd country with the largest natural forest area in Latin America.  Development of hard tropical timber in the forest and soft timber in the highlands.  Investment opportunities in industrial timber complexes.

Te Textil xtile  Recognized quality of Peruvian pima cotton.  1st world producer of the finest South American camelids fibers.  Long textile tradition favors workforce professionalization and training.  International recognition as “full package” supplier of the best brands in the world.  Sound trend towards exports growth.

Mining  Polymetallic country: 2nd in copper, 3rd in zinc and 1st in silver reserves worldwide.  11.52% of the territory is subject to mining concessions, and only 1.28% is used for mining exploration and exploitation.  2nd silver and copper producer worldwide.  1st gold, tin, zinc and lead producer, and 2nd copper, silver and molybdenum producer in Latin America.  Peru is one the few countries with non-metallic mineral deposits, such as mercury, selenium and cadmium.  In 2011, mining exports grew by 23.25%  Peru ranks 6th globally for mining exploration investment with Canada, Australia & USA, being top three.

En Energ ergy  Energy matrix mostly based on renewable sources.  In the last five years, the energy production has increased in 40.3% due mainly to the thermoelectric generation growth with annual average rate of 16%.  Main economic groups that comprise 62% of energy production in Peru are Globeleq, Suez and Duke Energy.  Great energy potential. Renewable energy sources to explore.

Pe Petroc troche hemica mical  Peru has important natural gas reserves.  Natural gas production reached 401,169 million cubic feet in 2011.  Petrochemical industry merges with natural gas production and other hydrocarbons using the “Upstream Integration” Development Strategy.  Peru has oil fields which have not been explored yet.  US $ 17,150 million from private investment will be assigned to the construction of ammonia, urea and ethylene plants in the southern region of the country.

To Tourism urism  Machu Picchu: One of the New Seven Wonders of the World.  Diversity of natural landscapes.  Destination for bird and orchid watchers.  Lima is the gastronomic capital of Latin America.  Significant investment from hotels of international recognition.  Investment opportunities in the 8 prioritized tourist destinations: North beaches, Amazon Rivers, Amazonas-Kuelap, Moche Route, Lima, Nazca-Paracas, Colca Valley and Lake Titicaca.

Real Real state state  Housing deficit affects 25% of population.  Annual growth of construction sector for 2010 was 18%.  There are several programs for housing financing based on households socio-economic conditions and income level.  Mortgage credits grew an average of 17% in the last 4 years (2008-2011).

Te Tech chno nologica logical l Se Services rvices  The lowest labor cost per operator in Latin America.  The contact centers services exports, data processing, application of IT program and similar are exempted from VAT.  The software sector had in the last 6 years an annual average growth of 15%.  The industry currently represents 15.574 positions, and it generates 29.665 direct jobs, and exports have tripled in 5 years.  The implementation of the Data Protection Law will strengthen the position of companies, making it possible to establish more trading links.

Coming opportunities for entrepreneurship with Peruvian businesspeople  Apparel “Peru Moda ” Lima 10 April www. perumoda .com  Tourism “Peru Travel Mart” Lima 23 May www. perutravelmart. com.pe  Mining “ Perumín 31” Arequipa 16 September www. convencionminera .com/perumin31/en  Agribusiness “ Expoalimentaria ” Lima 24 September www .expoalimentariaperu .com/en  Fishing “ Expopesca ” Lima 7 November www. thaiscorp .com/expopesca_new/site/index_en.php