Investment Opportunities in Peru: Business

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Investment Opportunities in Peru Business
Environment
Ismael Benavides F. Minister of Agriculture,
Government of Peru
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Peruvian GDP growth by sector
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Peru offers a favorable legal framework for
foreign investment

• Non discriminatory treatment
• Unrestrictive 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 investment agreements and member of
  ICSID and MIGA

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Investment Opportunities
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Textile sector
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• ? 1st world producer of Alpaca and Vicuna fiber.
• High quality of Peruvian Pima cotton.
• Large importer of cotton
• ? Textile exports of US 1 456 millions.
• Some renown brands served Peruvian industries
• ? Recognized quality as full package supplier
  of the best international brands of knitted
  cotton fabrics.

A/X (ARMANI EXCHANGE) ABERCROMBIE FITCH
ARMANI JEANS CHRISTIAN DIOR GIORGIO ARMANI
GEOFFREY BEENE CALVIN KLEIN DKNY DONNA
KARAN INT. EDDIE BAUER GUESS IZOD LACOSTE
LEVY STRAUSS CO MASSIMO DUTTI OAKLEY
PERRY ELLIS INTERNATIONAL POLO RALPH LAUREN
SAKS INC. TOMMY HILFIGER VANITY FAIR
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Fishing Aquaculture sector
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• ? 1st world exporter of fishmeal and fish oil,
  also is developing products for direct human
  consumption.
• ? Great hydrobiological richness catch 8 million
  MT of annual exploitable biomass (mainly
  anchovy).
• ? Large export growth of frozen, canned and
  processed fish products.
• ? Rapid development of the marine and continental
  aquaculture.
• ? Multiple species not yet entirely exploited.

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Forestry sector
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• ? 2nd largest natural forest areas of Latin
  America (Amazon forest).
• ? 53,5 million Hectares with forestry potential,
  10 million Hectares for reforestation and other
  areas for plantations.
• ? Developing of tropical hardwoods in the
  Rainforest and softwoods in the Highlands of the
  country.
• ? Investment opportunities in lumber industrial
  complexes.

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Agriculture sector
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Agriculture for Development

• Agriculture can offer pathways out of poverty if
  efforts are made to increase productivity in the
  staple foods sector connect smallholders to
  rapidly expanding high-value horticulture,
  poultry, aquaculture, as well as dairy markets
  and generate jobs in the rural nonfarm economy.

• World Bank, World Development Report 2008

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Poverty Index (2001 2007)
Coast The biggest poverty reduction in Peru was
registered in rural coast given the agricultural
modernization.
Highlands On the opposite the poverty remains
sticky in the Andean regions given lack of
agriculture development (technological
obsolescence, infrastructure deficit and property
atomization)
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Agricultural Exports 1994-2007
How we are growing
Millions of US FOB

• Total
• Non traditional
• Traditional

Source Aduanas / Prepared by MINAG Does not
include wood.
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Exports destinations - 2007
Source Peruvian Customs / Prepared by MINAG
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Main Agricultural Exports - 2007
Source Peruvian Customs / Prepared by MINAG
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Agricultural Linkages

• The development of the agricultural sector is
  critical for the Peruvian economy
• Is a leading force for employment creation (a
  third of the Peruvian labor force)
• It has the most dynamic non traditional exports
  path (35)
• Is currently involved in a high rate investment
  path
• Offers a very competitive platform for internal
  food supply
• And configures the critical force for poverty
  reduction (WDR, 2008)
• The FTA implementation will foster these linkages

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COMPARATIVE ADVANTAGES

• Geographical
• Perus location in the southern hemisphere is
  also favorable because it permits to export
  farming products to the large consumption market
  in the northern hemisphere, namely United States,
  European Union and Japan, taking advantage of the
  season contrast between both hemispheres

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COMPARATIVE ADVANTAGES

• 2. Long Harvest Seasons

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COMPARATIVE ADVANTAGES

• 3. Seasonality
• The weather and edaphology diversity in Peru, not
  reaching extreme temperatures in different
  seasons as in other countries, is optimum for
  agricultural activity.
• This permits to have a very varied product supply
  in a good number of cases and also uniformed
  amounts in our supply along the year, because
  production can be complemented in some different
  areas in the countrys territory.
• 4. Weather Conditions
• Peruvian climate, concerning main markets in the
  world, is a key aspect in for Peruvian
  agriculture competitiveness in the international
  context.
• Out of the 108 types of climates existing in the
  world, Perus territory shows up to 84 types,
  which permits the great diversity of crops,
  husbandry and forest species our fields offer.
  Besides, the coast, from which most of agro
  exports come out, is a natural greenhouse due
  to the effect of the cold Humboldt current and
  the Andes mountain range on the coastal weather.

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COMPARATIVE ADVANTAGES

• 5. Availability and low cost Labor
• You can hire very qualified workers in Peru and
  pay quite lower salaries to those paid in the
  European Union or the United States, for example.
  In the cases of China and India, where labor is
  even less costly than in Peru, other factors in
  Peru counteract this advantage, such as yield per
  hectare and transportation cost to final market
  destination.

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COMPARATIVE ADVANTAGES

• 6. Quality management (GAPs, HACCP, Traceability)
  
• Food safety is truly guaranteed as well as the
  respect for international environmental
  protection standards, as well as those that
  protect the condition in which workers perform
  their jobs .
• Farm producers and exporters have certifications
  as EUREPGAP, HACCP, ISO 9000, among many of
  others, nowadays. They insure compliance with
  good agricultural practices international
  standards (GAPs) as well as the traceability of
  all of the products chain processes. They also
  certify compliance with standards concerning
  innocuousness, environment and labor laws
• Peru has well-known governmental entities to
  regulate the quality of products traded
  externally and internally (INDECOPI), regulation
  and phytosanitary control of foods in the field,
  industry and trade (SENASA) and certification of
  compliance with hygiene and environmental health
  standards in food exports (DIGESA).

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COMPARATIVE ADVANTAGES
7. Trade Agreements

• In Negotiation
• European Union
• EFTA
• China
• México

• Concluded
• USA
• Canada
• Singapore
• Andean Community
• Mercosur
• Chile
• Thailand

• Foreseeing (2009)
• South Korea
• Central America
• Japan
• Australia

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COMPARATIVE ADVANTAGES

• 8. Low land cost.
• 9. Large Extensions yet to be exploited.
• 10.High quality products with good image in the
  international market.

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• ? 1st world exporter of asparagus and 2nd of
  paprika.
• ? 1rst world's productivity of mango, asparagus
  and sugar cane.
• ? Specialized in growing high-value fruits and
  vegetables.
• ? 5 millions hectare of land, many of them with
  possibility to schedule crops periods due to
  optimum climate conditions.
• ? Announced investments boom for the development
  of biofuels (sugar cane and oil palm).

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Main Agriculture, Biofuel and Forestry
Megaprojects

• Irrigation Projects
• Olmos Project (27,000 has).
• Majes Siguas Project, 2nd Stage (38,000 has).
• Cachi River Project (5,000 has).
• Alto Piura Project (15,000 has).
• Lagunillas Puno Project (10,000 has).
• Land Sale and Private Initiatives
• Majes Siguas Project, 2nd Stage (1,000 has).
• Lands in Lima Region (8,000 has).
• Lima Ica Agricultural Development (25,000 has).
• La Libertad Private Initiative (1,000 has).
• Jequetepeque Zaña (4,000 has).
• Forestry Development and Biofuel Areas
• Piura Agricultural Park.

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Opportunities in the Coast
If you want a big farmthis is the place!
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Asparagus, green and white
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Artichokes, sweet onions, sweet potatoes
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Piquillo pepper , Paprika, Chili varieties
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Mangoes
Table grapes
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Avocados
Organic Bananas
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Pomegranates, mandarins and tangelos
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Opportunities in Highlands
Clean sky, bright sun, pure water, good soils
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Native Potatoes and Corns
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Quinoa and Kiwicha (amaranto)
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Processed Maca and Tara
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Sugar snaps
Snow Peas
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Chirimoya and passion fruit
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Berries
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Alpaca Finest wool
Suri
Huacaya
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Opportunities in Amazonia
A new world waiting for you
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Gourmet Coffee and Cocoa
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Forestry and lumber products
Mahogany
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Oil palm
Sugar cane - Ethanol
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Sacha inchi oil
Camu Camu
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Processed Cats claw
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Tropical flowers and foliages
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Remembering the Comparative Advantages

• Tropic Located country.
• Off Season Production.
• Solar Intensity Radiation.
• Quality of Products.
• Voluntary Irrigation Agriculture.
• Long harvest seasons.
• Hand labour availability.
• Large extensions to exploit.
• Low cost of the Land.
• Plenty of favourable ecosystems.

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Peru is PRODUCTIVITY
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Peru is QUALITY
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Peru is BIODIVERSITY
Camu camu
Cactus pear
Some native products
Amaranto
Lucuma
Soursop
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Contact information

• Agribusiness and Market Acces Unit
• UAAM
• Ing. Fausto Robles
• Adress Av. Alameda El Corregidor 155
• La Molina Lima 12, Perú.
• Phone [phone]
• E,mail froblesr_at_minag.gob.pe
• Ministry of Agriculture
• www.minag.gob.pe

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THANK YOU
Ismael Benavides F. Minister of Agriculture,
Government of Peru