Section 2000-2017 2018 Winds of Change in Latin America : How will - - PowerPoint PPT Presentation

DARIO CHEMERINSKI

Senior Project Manager dchemerinski@gmail.comil

Latin America Section

2000-2017

2018

Winds of Change in Latin America:

How will post-TPP Alliances, Free Trade & Anti-Populism Policies reshape the Tuna Industry in the next 5 years ?

Agenda Today

• 1. Latin America in International Perspective

➢Recent Economic Performance 2017

• 2. Trade Initiatives deepening Regional Integration
• 3. Strategic Issues Post TPP affecting the Tuna Business
• 4. Consumption Trends & Habits

➢Innovation as Engine for Growth in Latin America

• 5. Latin America Market for Canned Tuna: a New Era of

Open Cooperation with Asia Pacific ?

• 6. Conclusions and final remarks/questions

WINDS: There are new winds of change in Latin America, as populism is being

replaced by modern open trade policies and young politicians.

TRENDS: We will review macro and micro trends towards 2020 , that will affect

the fish & tuna consumption.

FOCUS: We will focus on the new reality uniting the 2 Blocs in Latin America….. LOOK: With a closer look at the Pacific Alliance countries + Ecuador, we will

review implications in their relationship with Asia-Pacific

Main Concepts for today...

This presentation will argue that cooperation intra-blocs has improved and is gaining speed. But a lot must be done, opening trade, reducing import tariffs and removing barriers.

Global Hunger is disappearing...

Latin America in International Perspective

• 1. 9% of World GDP >> usd 3.5 trn
• 2. Population 480m in 33 countries
• 3. Life expectancy to reach +80yrs
• 4. Urbanization already at 85%

BUT...

Latin America... Still lagging behind in Reforms

Rigid labour markets Insufficient financing Poor infrastructure Complex & inefficient tax systems Lack of skilled labour Poor competition Bureaucracy

Source Ranking by EIU

Economic Performance 2017

• 1. South America, Central & Caribe growing at 2% year

➢Champion is Paraguay at + 5% a year ➢Worst is Venezuela -7% a year

• 2. Latin America´s growth is highly dependent on Exports

➢Commodities (Food, Minerals, Oil) dominate the trade

• 3. All countries are tackling corruption, crime and drugs

Liberal Governments are replacing Populist ones across Latin America Population in Latin America will reach 500m GDP will continue to grow at average 3%, low inflation rates Middle class will become 50% of the total, thus surpassing the low class

Latin Outlook for 2020

✓Brazil´s and Mexico´s continental relevance will rise. ✓Chile, Argentina, Colombia & Peru gaining global relevance ✓Although Pacific side will grow faster than Atlantic side.

Union of all Latin American countries is in progress

What about Tuna in Latin America ?

• 1. Latin America consumes 15% of all

world´s canned tuna

• 2. Imported 135.000 TNS in 2016

Big business

• 1. Latin America produces 25% of global output
• 2. Ecuador is the second largest exporter in the

world + 200.000 tns !

Tuna is a ....big business !

TUNA CATCH BY FLAG

2016 %

1.

ECUADOR 281.000 tns 47% 2. MEXICO 137.000 tns 21%

3.

PANAMA 68.000 tns 11%

4.

VENEZUELA 35.000 tns 5%

5.

OTHERS 87.000 tns 16 %

TOTAL

610.000 tns 100%

Ecuador- Transformation of Tuna

TUNA INDUSTRY

2015 Use

Processes… 450.000 tns

RAW MATERIAL

▪ Exports... 65.000 tns

FROZEN LOINS

▪ Produces... 185.000 tns

CANNED TUNA ▪ Exports…

140.000 tns

+90 countries ▪ Domestic

45.000 tns

2.8 kgs per capita ! TOTAL VALUE

1 BN DOLLAR

20 plants 116 vessels

Catch in Latin America- 2016 by Species

38% 51% 8% 2%

CATCH 2016

YELLOWFIN SKIPJACK BIGEYE

OTHERS

SKIPJACK

YellowFin

Consumption Trends & Habits Innovation as

engine for growth in Latin America

Innovation....

as Engine for Growth in Latin America

✓How to increase the low per capita consumption ? ✓How to get closer to new customers ? ✓How to benefit from the “ready-to-eat” trend ? ✓How to increase frequency of purchases ✓How to make it all-year-round product ? ✓How to make tuna more attractive as protein ?

✓Let´s check 5 (five) LATIN examples....

ECUADOR

BRANDING/ Premium IMAGE

MEXICO

Plastic Coloured Cups/Young consumers

PERU

Quality of the Oil/Health & Taste

NEW BRAND LAUNCHED BY THE #1 VEGETABLE OIL COMPANY in PERU SOLID, CHUNK, FILLETS & Ventresca

CHILE

Easy-peel cans/ Practicality

COSTA RICA

Combination with Sauces/Eating Habits

Post-TPP: a New Latin Era of Cooperation with Asia-Pacific & China ?

The “new” TPP treaty

➢ Originally signed in 2016, was cancelled by Trump in 2017 and reapproved and signed again in March 2018 without the US !  The goal of the TPP–is to make it easier for countries to export ➢ It does so by removing “barriers to trade,” like import taxes & regulations.  TPP will help economic Reform in some Latin American countries too

ALL-TUNA Producers Importers Exporters VIETNAM

PERU

MEXICO

MAIN TPP BENEFICIARIES TUNA BUSINESS

Impacts post-TPP: The Unkown

1 year

• VIETNAM
• Opening new

markets ?

• Increase catch &

production scale ?

3-years

• ECUADOR
• Join Pacific

Alliance ?

• Join TPP ?
• Target for M&A ?

5-years

• CHINA
• THAILAND
• TAIWAN
• SOUTH KOREA
• Joining TPP ?

TPP – some considerations about China

• 1. TPP is a free trade agreement, and China is not yet a free economy.
• 2. Japan will lead the region, with new rules and forming alliances
• 3. TPP increases the pressures within China for economic reforms.

▪ While promoting the OBOR One Belt One Road to reach Europe faster !

Economic relations have strengthened significantly over the past 15 years. Trade flows regions have grown tenfold since 2000 The rise of China has been an important driver but S. Korea & India are growing too

Latin America & Asia Pacific Closer Economic Ties...

Regional Outlook ahead…

 Canned Tuna

 Changes to happen “quality-wise” (less grated, more solid, more salads) ✓ Per capita consumption will grow in Colombia & Argentina mostly ✓ Mexico…becoming center of Innovation, size of the industry is the key ✓ Brazil? A big market….when import taxes go down !

 Related to Asia…..

✓ As barriers go down, Thailand, Vietnam, China and possibly Philippines to challenge dominance of Ecuador ✓ Fact 1: Vietnam has doubled exports to Mexico in first half 2017 ✓ Fact 2: In 2017 big rise in Thai exports to Peru & Chile.  Related to CHINA …..

The Inevitable Rise of China in Latin America

China´s 4 ROLES

MAIN PARTNER & INVESTOR

FUTURE TPP Member

HUGE FOOD IMPORTER

RISING TUNA POWER

 Turn Trade into a Sustainable Engine of Growth

➢Reduce the existing obstacles to trade ➢Greater regional and bloc trade integration ➢Broad political backing is crucial ➢Stronger links w/Asia to create better conditions for entrepreneurial initiative

THE ASIAN WAY for Latin America

✓ Free Trade: will increase growth and create new opportunities ✓ Anti-Populism Policies: will increase regional integration ✓ Post-TPP Alliances: will reshape significantly...

the Tuna Industry in the next 5 years

CONCLUSIONS

Winds of Change in Latin America

THANK YOU INFOFISH !

Khob khun ขอบคุณ krab

DARIO CHEMERINSKI

Senior Project Manager dchemerinski@gmail.comil