Technology for biosciences, energy generation and supply,

environmental in Argentina

Thursday, 29th November 2012

Technology transfer in Argentina

• Argentina has few commercial ties to the UK compared to other technologically advanced countries such as China, Germany, Canada and the US (Exhibit 1)

• Export is key to Argentina, and concentrated in a few large companies whose productivity could be improved dramatically by technology (Exhibits 2-6)

• Focus on key native Argentine exporters best way to improve technology transfer (Exhibit 7)

Argentine export destinations (2011)

7 countries, ½ exports:

#1 Brazil (12.5%)

#2 China (10.0%)

#3 Chile (7.3%)

#4 Germany (6%)

#5 Canada (5.8%)

#6 Spain (4.8%)

#7 USA (4.8%)

…#? UK (not top 25)

Exhibit 1

Argentine exports (2011)

Source: http://www.aiera.org/link/Losgrandesexportadoresen2011.pdf

Only ONE industrial product in top 10, automotive, artificiallypromoted throughmatching Brazilianexports)

Of top 25 export items(95% of exports):-42% cereals, oilseeds;-23% mining; -17% oil & gas;-11% industrial goods-2% shellfish, milk

Exhibit 2

Argentine exportersTop 25 companies export 45% of total (top 273 85%)

Top 25 mostlycommodities:

12 grains, oil seeds;

6 oil & gas;

5 industrial goods (3 cars, 1 steel tubes & 1 aluminium);

2 mining

Exhibit 3

Energy generation & supply• Energy subsidies (0.90 USD/litre mogas vs 2.30 USD/litre in

Chile) cost government so much they no longer report how much they are importing. Increasing Argentine productivity is essential.

• Large reserves of shale natural gas and oil, but falls 2007-10 in proven reserves of crude (-15%) and gas (31%). YPF needs to produce 1/3rd more by 2017, which requires investment of 37.2BN USD.

• However, financing assets is going to be difficult– Repsol is saying they will sue anyone who takes on the YPF

assets that Argentina nationalized without compensation. Argentina is saying they will sue any oil & gas major exploring in Falklands, which they consider part of their reserves

– Argentine physical assets are also not secure (e.g. workers seized Cerro Dragon, single largest well in Argentina, and police didn’t expel them)

Exhibit 4Source: http://en.wikipedia.org/wiki/Gasoline_and_diesel_usage_and_pricing

Environmental

• Waste water treatment for agriculture (drought reduced farm yields 1/3rd last year, 2/3rd in North)

• Energy saving and renewable energy. Current energy subsidies will have to change because regime is running out of dollars. Sudden price rise will be like US hitting oil crisis of 1970s.

Exhibit 5

Biosciences

• Genetically modified grains (“no till” Monsanto soya with Roundup resistance has increased yields from dry Northern land, values have risen 5-10 fold)

• Enzymes for low energy processing and value from “waste” e.g. Marmite from yeast, since value add in Argentina low (62% of export low value add, 25% agro process, 13% industrial)

Exhibit 6

Suggested next steps• Develop business models that allow a win-win-win for UK innovators , Argentine

exporters and Argentine government

• Show how technology can improve productivity and margins of native Argentine exporters (29.2% of 2011 exports):– Minerals (7.3% of 2011 exports)

• Minera Alumbrera (5.8%)• Aluar Aluminio (0.8%)• Cerro Vanguardia (0.7%)

– Oil & Gas (9.2%)• Pan American Energy /Sur(5.3%)• Transportadora de Gas del Sur (1.3%)• YPF (0.9%)• Medanito (0.9%)• Tecpetrol (0.8%)

– Agribusiness (12.7%)• Aceitera General Deheza (2.7%)• Vicentin (2.2%)• Noble Argentina (2%)• Molinos Rio de La Plata (1.9%)• Nidera (1.6%)• Oleaginosa Moreno (1.2%)• Associacion de Cooperativas Argentinas (1.1%)

• Form collaborations with Argentine universities and research institutes to transfer knowledge and build up local capabilities (c.f. 300M USD investment by Monsanto in Cordoba to develop GM maize)

Exhibit 7