Colombia Outlook And Investment Potential Nov06
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Colombia Outlook And Investment Potential Nov06

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Colombia Outlook And Investment Potential Nov06 Colombia Outlook And Investment Potential Nov06 Presentation Transcript

  • ah CONSULATE GENERAL OF COLOMBIA SYDNEY
  • Colombia: Outlook and Investment Potential DID YOU KNOW THAT...
    • Colombia owns the Latin America’s biggest coal mine: El Cerrejon, which is one of the biggest coal mines in the world?
    • Around 400 transnationals, with US$26.6 billion of annual sales, run their operations in Colombia?
    • More than 50% of the flowers sold in the USA come from Colombia?
    • Colombia is the world's third largest banana producer?
    • Colombia ranks fourth in the world in palm oil production, drinking water supplies and nickel?
  • Colombia: Outlook and Investment Potential WERE YOU AWARE THAT:
    • Colombian novel prize in literature, Gabriel Garcia Marquez, is one of the most read novelists in the world? (One of his books sold more than 500.000 in 3 years)
    • One of the major Colombian painters and sculptors, Fernando Botero, has exhibited his works at the Champs
    Elysées in Paris, Central Park in New York, St. Mark's Square in Venice and in the Paseo de Recoletos in Madrid?
    • The Nasa Neuroscience Director is the Colombian scientist Rodolfo Llinás?
  • 1. GENERAL INFORMATION GENERAL INFORMATION ABOUT COLOMBIA
    • Official Name: Republic of Colombia
    • Total Area: 1,141,748 Km 2
    • Land Frontiers : Venezuela, Peru, Ecuador, Brazil and Panama
    • Coast Lines: Atlantic and Pacific Oceans
    • Population: 44 million inhabitants
    • Capital : Bogotá, 8 million inhabitants
    • Government: Democratic. Presidential election every 4 years
    • Official Language: Spanish
    • Religion: Freedom of religion (Catholicism)
    • Currency: Peso (COP$ 2,320=US$ 1 - average 2005)
  • 1. GENERAL INFORMATION 1.1. STRATEGIC LOCATION Sydney 14.380 km Los Angeles 5.660 km Manila 17.290 km New York 3.980 km London 8.470 Km Madrid 8.030 Km Johannesburg 11.470 km Quito720 Km. Caracas 1.030 Km. Lima 1.890 Km. Santiago 4.250 Km. B. Aires 4.690 Km Rio 4.540 Km Seattle 6.700 Km
    • Easy access to all markets
    • Mid point between North and South America
    • Geographic and environmental diversity
    • Less than 9 hours in airplane from the principal cities of the continent.
    • Air trasportation costs to United States are the lowest compared to its main competitors
  • 1. GENERAL INFORMATION 1.2. MULTIPLE PORTS TEN PORTS : 2 PORTS - PACIFIC OCEAN 8 PORTS- ATLANTIC OCEAN Buenaventura is an important port in the Pacific Ocean that facilitates de trade exchange with Asian countries and Australia.
  • 1. GENERAL INFORMATION 1.3. MULTIPLE REGIONAL DEVELOPMENT AREAS
    • COLOMBIA IS DIVIDED IN FIVE MAIN ECONOMIC REGIONS:
    • Caribbean Region
    • Tourism, commerce, agriculture, mining, port activities, fishing and industry
    • Pacific Region
    • Forestry, mining, fishing, agriculture, industry, commerce, cattle, port activities.
    • Andean region
    • Industry, oil exploration, agriculture, commerce, services, farming, tourism, mining.
    • Orinoquia Region
    • Agriculture, mining, forestry, fishing, oil exploration, cattle, commerce
    • Amazon Region
    • Forestry, ecotourism, fishing, agriculture
    • Interesting market opportunities for investors.
    • Several development areas throughout the country
    • Country's risk diversification by region.
  • 1. GENERAL INFORMATION 1.4. POLITICAL STABILITY
    • Colombia is Latin America’s oldest and most stable democracy.
    • President Uribe has reached a popularity index of 67%
    • The Government has set up three basic policies:
      • Democratic security
      • The struggle against corruption and political chicanery
      • Economic and social reactivation
    • The existence of subversive groups does not influence the internal democratic stability.
    • Many State actions against illegal armed groups are already taking place, thanks to a Democratic Security Policy conducted by President Uribe, supported by the international community.
    • The Government, the congress and the civil society have been working together to neutralize subversive groups.
  • 1. GENERAL INFORMATION 1.5. SECURITY IMPROVEMENT Public Security Index, Citigroup Colombia (2000-2006) The policy for Democratic Security has achieved significant successes in 24 months of government, with regard to a reduction in the murder rate, kidnaps, terrorism, massacres and human rights violation.
    • Democratic Security Policy has strengthened the Colombian military capacity, in terms of force, means, resources and credibility.
    • The individual demobilizations of guerrillas totaled 8.977 (Until December 2005)
    • Kidnappings decreased by 51.80% in 2005.
    • Terrorism decreased by 27.3% in 2005.
    • Victims caused by massacres decreased by 2.7% in 2005.
  • 2. CURRENT ECONOMIC SITUATION IN COLOMBIA Colombia: Outlook and Investment Potential
  • 2. ECONOMIC SITUATION 2.1. ECONOMIC GROWTH GDP Growth: Colombia Good Performance in Latin American context. Third greatest in Latin America. In 2005, the economy grew 5.13% GDP per capita: US$ 2,277 Fuente: Comisión Económica para América Latina y el Caribe – CEPAL, DANE Colombia vs. Latinoamerica (1980-2005) %
  • 2. ECONOMIC SITUATION 2.2. ECONOMIC STABILITY Inflation Rate Colombia had an inflation of 4,85% during 2005 . The savings and lending rates have shown a stable performance , as they reached 6.3% and 12%, respectively, in January 2005. Interest rates 1997-2005 4.85% 1994- January 2006
  • 2. ECONOMIC SITUATION 2.3. ECONOMIC STABILITY Finance obligations Colombia has never experienced defaulted on its international debts or financial obligations. 11.8% 12.10% Unenployment rate 27% Imports grew 54.6% 21% Exports grew 44% 43.5% Private investment increased 2005 2004 Some economic indicators
  • Colombia: Outlook and Investment Potential 3. CURRENT BUSINESS OPPORTUNITIES AUSTRALIA-COLOMBIA
  • GDP in Latin America (2005) Current Prices, US$ Millions Fifth largest economy and third largest population in Latin America Source: International Monetary Fund and World Bank, *Data for Colombia in 2005 from Bank of the Republic (Central Bank) and DANE Colombia Among the Andean countries, Colombia has the second-largest economy and the largest population. Population in Latin America (2005) Millions of persons Colombia Market size Qualified human capital 3. BUSINESS OPPORTUNITIES 3.1 MARKET SIZE
  • Source: The World Competitiveness Yearbook 2006-IMD Qualified human capital Availability of trained workforce (0= not available; 10= available) Ranking (61 countries) 26 39 44 40 57 12 Competent managers (0= not available; 10= available) Ranking (61 countries) 3 6 29 37 40 55 Colombia Colombia 3. BUSINESS OPPORTUNITIES 3.2. HUMAN RESOURCES AVAILABILITY
  • Remuneration manufacturing industry US$/hour (Including benefits) Source: The World Competitiveness Yearbook 2006-IMD Remuneration service professionals US$/year (Department Managers) 43 35 13 11 10 5 18 19 16 56 35 22 19 17 9 12 10 Colombia 19,500 Ranking (60 countries) Ranking (60 countries) Colombia Qualified human capital 3. BUSINESS OPPORTUNITIES 3.3. LOW LABOR COSTS
  • 3. BUSINESS OPPORTUNITIES 3.4. INVESTMENT GRADE RATING ACORDDING TO THE LEADING CREDIT RATING AGENCIES Chile Mexico Standard & Poor‘s Chile*** Mexico Colombia* * Peru** Brazil** Argentina * Venezuela** A - BBB- BB BB- B+ CCC+ SD Investment Grade Chile** Mexico*** Colombia* Brazil** Peru ** Argentina ** Venezuela** Moody’s Baa1 Baa2 Ba2 Ba3 B1 Caa1 Ca Investment Grade Colombia Peru Brazil Argentina Venezuela Fitch A - BBB- BB BB- B B DDD Investment Grade Colombia has the third best rating on foreign currency sovereign bonds * Negative Outlook ** Stable Outlook *** Positive Outlook
  • 3. BUSINESS OPPORTUNITIES 3.5. INVESTMENT AND EXPORT TRADE INCENTIVES
    • Free Trade Zones
    • Geographical zones with tax, foreign exchange and procedural incentives.
    • Special Economic Export Zones
    • 5 cities with specific flexible labor regulations in addition to similar incentives as in FTZ
    • Only for new investment
    • Paez and Quimbaya Zones
    • Special and limited regimes for areas affected by natural disasters with tax exemptions.
    Plan Vallejo Import-Export mechanism for the production of exports with customs and VAT exemptions New Customs Legislation Special set of export incentives In force since on July 1st, 2000 Custom Statute, Decree 2685 of 1999. VARIOUS MECHANISMS OPERATE IN COLOMBIA TO PROMOTE INVESTMENT AND EXPORT ACTIVITY THROUGH A SERIES OF SPECIAL INCENTIVES.
  • 3. BUSINESS OPPORTUNITIES 3.6. PRIVILEGED ACCESS TO GLOBAL MARKETS Andean Community (CAN) Free Trade Zone Common External Customs Tariff Chile - CARICOM Free Trade Agreements G-3 Free Trade Agreement with Mexico and Venezuela ALADI Partial-Scope Agreements Free Trade Zone CAN - MERCOSUR Free Trade Zone World Trade Organization –WTO Multilateral Treaty , Member since 1995 TRADE AGREEMENTS
      • ATPDEA (EEUU) Unilateral agreement
      • More than 6.100 Duty Free products.
    • ANDEAN GSP (European Union)
      • Unilateral agreement
    • Most Industrial and Agricultural Products are Tariff-Free.
    TARIFF PREFERENCES Foreign investors in Colombia can receive the benefits of important trade agreements and tariff preferences, that have given to Colombia privileged access to world markets, representing a competitive advantage for Colombian exports. TLC with United States is under discussion.
  • 3. BUSINESS OPPORTUNITIES 3.7. COLOMBIA’S FOREIGN INVESTMENT REGIME
    • Foreign Investment Regime:
    • Free remittance of profits
    • Equalitarian treatment
    • Universality principle (restrictions: defense and national security toxic, radioactive dangerous waste disposal activities)
    • International Agreements for foreign investment protection:
    • OPIC (Corporation of Private Investment in Foreign Countries)
    • MIGA (Multilateral Agency of Investment Guaranty)
    • ICSID (International Center to solve disagreements related to investment)
    • Bilateral Investment Treaties (BIT’s) under discussion
    • Registered on the Intellectual Property World Organization
  • 3. BUSINESS OPPORTUNITIES 3.8. FOREIGN DIRECT INVESTMENT IN LATIN AMERICA Colombia: Fourth Foreign Direct Investment destination in Latin America 2006 Trend Report: PROEXPORT
  • Trend Report: PROEXPORT 3. BUSINESS OPPORTUNITIES 3.8. FOREIGN DIRECT INVESTMENT IN COLOMBIA
  • 16% 14% 12% 8% 8% 10% 6% 5% 3% 4% TOTAL*: US $32,444 MM 16% * Excluding the petroleum sector and reinvestment of profits Source: Bank of the Republic (Central Bank) Main investment partners Accumulated FDI by country* (1994 – 2005) % of Total The main foreign investors in Colombia are: 3. BUSINESS OPPORTUNITIES 3.9. FOREIGN DIRECT INVESTMENT BY COUNTRY OF ORIGIN
  • 3. BUSINESS OPPORTUNITIES 3.10. FOREIGN COMPANIES IN COLOMBIA Some Strategic Alliances / Acquisitions Type Sector Colombian Company Foreign Company Country Acquisition Public Services Procesos y Diseños S.A John Wood Group Pcl Scotland Acquisition Mining Intercor Consorcio CZN UK Capital /Expansion Commerce Carulla Newbridge Andean Partners US Capital / Expansion Mining Gas Natural S.A Gas Natural Spain Capital / Expansion Communications Comcel America Movil Mexico Capital / Expansion Communications Caracol Radio Grupo Prisa Spain Joint Venture Food Services Colombina Joyco Spain Local Market Pharmaceutics Nucleotronics Bio Products Laboratory UK Joint Venture Basic drainage Aguas de Cartagena Aguas de Barcelona Spain Internet Communications/IT Bavaria UOL Brazil Technological Transference Insurance Colseguros Allianz France/Germany Capital / Expansion Commerce Exito Casino France Distribution Food services C. Nacional de Chocolates Mavesa Venezuela Capital / Expansion Communications Celumóvil Bell South US Acquisition Financial Banco Ganadero BBVA Spain Acquisition Financial Banco Real ABN-AMRO Netherlands Expansion Automobile CCA Ford Motor US
  • 3. BUSINESS OPPORTUNITIES 3.11. AN EXAMPLE OF POSITIVE EXPERIENCE BHP BILLITON BHP Billiton owns a third of Latin America’s biggest coal mine: El Cerrejon. The biggest coal mine in the world, located in the province of La Guajira on the Colombian Caribbean coast. It produces the lowest cost coal supplying the Atlantic basin. Billiton's owns 99.9% of the nickel mine Cerro Matoso. Cerro Matoso is located in the province of Córdoba, in northern Colombia. An integrated nickel mining and smelting operation, Cerro Matoso combines one of the richest lateritic nickel deposits in the world with a low-cost ferronickel smelter. Cerro Matoso is one of the world's lowest cost, major ferronickel producers.
  • 3. BUSINESS OPPORTUNITIES
    • TELECOMMUNICATIONS
    • ELECTRIC ENERGY PROJECTS
    • HIGHWAY CONCESSIONS
    • MASSIVE TRANSPORTATION SYSTEMS
    • OIL SECTOR
    • RECOVERY OF THE MAGDALENA RIVER
    INFRASTRUCTURE INVESTMENT 3.12. MAIN PROJECTS TO INVEST IN COLOMBIA
    • GAS
    • COAL
    • MINING
    • FORESTRY
    • TOURISM
    • SOFTWARE
    • AGRO INDUSTRY AND FISHERY
    • OIL PALM AGRO INDUSTRY
    ATTRACTIVE SECTORS 3. BUSINESS OPPORTUNITIES 3.12. MAIN PROJECTS TO INVEST IN COLOMBIA
  • 4. EXPORTS TRADE BALANCE COLOMBIA - AUSTRALIA Total trade between Colombia and Australia has had a decrease in the last years. In 2005, the total trade was (A$m) 49 EXPORTS Australia to Colombia IMPORTS Colombia to Australia Source: DFAT (Department of Foreign Affairs and Trade Australia
  • 4. EXPORTS 4.1. TRADE BALANCE AUSTRALIA EXPORTED US$22 MILLIONS IN 2005 TO COLOMBIA. Source: DFAT (Department of Foreign Affairs and Trade Australia
  • 4. EXPORTS 4.2. POTENTIAL PRODUCTS TO EXPORT TO COLOMBIA
    • EDUCATION (Aproximately 2000 colombian students in Australia)
    • WINE
    • INFORMATION TECHNOLOGY
    • E-COMMERCE SERVICES
    • SOFTWARE
    • MEDICAL EQUIPMENT
    • TELECOMMUNICATION SERVICES
    • TOURISM
    • AIR CRAFT SPARE PARTS
    • CHEMICALS
  • 5. IMPORTS 5.1. TRADE BALANCE IN 2005 AUSTRALIA IMPORTED US$28 MILLION FROM COLOMBIA. Calima Pty Limited has been distributing its 100% Colombian Coffee to the industry for the last 2 years, increasing a broader awareness of the culture, and heritage of Colombia through a number of high profile cafes/restaurants in Sydney, and expanding to other cities. Source: DFAT (Department of Foreign Affairs and Trade Australia
  • 5. IMPORTS 5.1. TRADE BALANCE IN 2005 AUSTRALIA IMPORTED US$28 MILLION FROM COLOMBIA. Calima Pty Limited has been distributing its 100% Colombian Coffee to the industry for the last 2 years, increasing a broader awareness of the culture, and heritage of Colombia through a number of high profile cafes/restaurants in Sydney, and expanding to other cities. Source: DFAT (Department of Foreign Affairs and Trade Australia
  • 5. IMPORTS 5.2. THE 25 COLOMBIAN COMPANIES WITH MORE EXPORTATIONS Out of the 25 colombian companies with higher exports. Australia already has a very important investment in two of them (Cerro Matoso and Cerrejon). Australian investors have ample business opportunities with several other companies. The potential products are: chemicals, fertilizer, chocolates, biscuits, confectionery, dairy products, construction materials, etc.                                                                                                                         
  • 5. IMPORTS 5.3. OTHER IMPORTANT PRODUCTS TO IMPORT
    • LEATHER
    • EXOTIC FRUITS
    • FLOWERS
    • ORGANIC PRODUCTS
    • COFFEE
    • CONFECTIONERY
    • WOMEN’S CLOTHES AND UNDERWEAR
    • BANANA
    • CRAFTS
    • LIQUOURS (RUM)
  • 5. IMPORTS 5.4. WHY COLOMBIAN PRODUCTS IN AUSTRALIA?
    • COLOMBIAN EXPORTING COMPANIES ARE CERTIFIED INTERNATIONALLY BY ORGANIZATIONS SUCH AS THE ISO (International Organization for Standarization)
    • PRODUCTS ARE COMMERCIALLY COMPETITIVE, WITH FLEXIBLE PRICING ISSUES
    • COLOMBIAN COMPANIES ARE WILLING TO NEGOCIATE ADVANTAGEOUS AGREEMENTS FOR AUSTRALIAN COMPANIES
    • OPEN MIND FOR NEW BUSINESS
  • 6. CONCLUSION
    • COLOMBIA IS AN EMERGING MARKET IN THE ANDEAN REGION WITH AMPLE OPPORTUNITIES FOR INVESTMENT
    • GREATER NUMBER OF INCENTIVES TO TAKE ADVANTAGE OF BY INVESTING IN COLOMBIA
    • BETTER INFRASTRUCTURE, IMPROVEMENTS IN DATA AND TELECOMMUNICATIONS TECHNOLOGY, POLITICAL AND SOCIAL STABILITY, OFFER A SUITABLE ENVIRONMENT FOR INVESTMENT IN COLOMBIA
    • THERE ARE MANY INTERACTIVE BUSINESS OPPORTUNITIES BETWEEN AUSTRALIA AND COLOMBIA ON TRADE, JOINT VENTURES AND PRODUCTION.
  • ADDITIONAL INFORMATION www.proexport.com.co www.coinvertir.org www.banrep.gov.co www.mincomercio.gov.co