ESTC 2011 Presentation by Scott Liggett, Beach Renourishment
ESTC 2008: The Opportunity for Marine Tourism Development in Chilean Patagonia
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Transcript of ESTC 2008: The Opportunity for Marine Tourism Development in Chilean Patagonia
Chilean Economic Development Agency
(CORFO)
Promoting Innovation in the Chilean Economy
CORFO, the Chilean Economic Development Agency, founded in 1939, is a government organization that deals with the economic development of the country, through investment attraction and the promotion of competitiveness of domestic companies.
1 2 3 4Investment Innovation Quality &
ProductivityFinance
Lines of Work
Staff: 49515 regional offices along ChileRepresentation in the US, Canada, Spain, Italy, Germany, Sweden and New Zealand.Endowment: US$ 4,1billionAnnual Operation Budget (2008): US$ 1,2 billion
CORFOCORFO’’ss pioneering spirit has played a significant roll in expanding the country’s economic development by promoting investment, innovation, business and cluster development, coupled with a focus on quality and productivity.
CORFOCORFO oversees a variety of programs aimed at generating the economic development of Chile, through the promotion of inward investment and the advocacy of competitiveness for domestic companies.
Chile at a Glance
Why Invest in Chile?
Dairy Industry in Chile
Incentives for Investors
Contents
Investment Opportunities
Chile & New Zealand
Chile at a Glance
“Increased productivity also involves innovation and the incorporation of new products and technology into our exports.
I want a country that exports not only copper but software for the mining industry; that exports not only fruit but food packaging and conservation techniques; not only salmon but vaccines to prevent fish diseases.
The public sector will increase its spending on research and development by 50%. Our Our goal is for our country to spend more than 1% of GDP on researchgoal is for our country to spend more than 1% of GDP on research and and development by its Bicentennial in 2010.development by its Bicentennial in 2010.””
President Michelle Bachelet
Why Invest in Chile?
Why Invest in Chile?
Latin America’s most competitive, peaceful, and stable economy
A transparent and low-risk business climate
World-class telecommunications infrastructure
Outstanding access to Latin American markets
Extensive network of Free Trade Agreements with Asia, Latin America, the EU, and the US
Competitive human resources
An ‘e-ready’ society
Exceptional quality of life
Competitive business costs
Government support
“
Chile’s Business Environment
The most stable and competitive economy in Latin AmericaRanked 1st in the region by WEF in World Competitiveness Index 2006
Ranked as Best Place to do Business in the region by EIU in 2006, 4th among emerging countries and 19th in global ranking
Lowest country risk in the region (Moody´s, Fitch and S&P)
Strong, transparent institutions and regulatory framework are an example for the region
Ranked best in the region by Transparency International in its Corruption Index, tied with U.S. in 20th place in global rankings
Ranked 1st in the region by World Bank in terms of “Ease of Doing Business”, and 28th worldwide
Positioned as a gateway to the worldFree trade agreements covering over 90% of the world GDP
Low tax burden and extensive network of double taxation treaties
Main International Indexes
The World Economic ForumWorld Economic Forum ranks Chile as Latin America’s mostcompetitive economy. Chile continues to enjoy a favourablebusiness environment position within a selective group of 125economies worldwide.
Web of trade agreements provides access to more than 90% of OECD
economies
Source: Direcon www.direcon.cl
Web of double taxation agreements covers most of OECD economies
Chile is a Gateway to the World
CanadaUSA
Iceland
Mexico
El SalvadorCosta RicaGuatemalaNicaraguaHonduras
Panama UruguayParaguayAngentinaBrazil
EuropeanUnion
NorwaySwitzerlandLichtenstein
SouthKorea
Japan
China
Brunei
New ZelandAustralia
Singapore
India
CanadaUSA
Mexico
Cuba
ArgentinaBrazil Paraguay
Spain Norway RusiaPortugal Denmark PolandUK Sweden CroatiaFrance Finland HungaryNetherlands Czech RepublicSwitzerland Belgi|umIrelandItaly
Russia
SouthKoreaThailand
MalaysiaChina
New ZealandAustralia
SouthAfrica
In negotation In negotation
VenezuelaColombiaEcuador Peru
A “Foreign Investor-Friendly” Environment
Strong regulatory framework and dominance of the rule of law
New Intellectual Property Law:The law includes the possibility of patenting microorganisms and genes Clinical Trials subject to approval by the National Health AuthorityBiosafety and bio-prospecting regulations Currently being developedIP in Chile managed by the Intellectual Property Department
Industrial Property Law incorporates commitments under the WTO’s TRIPs agreement:
Regulates industrial rights related to innovations Protection of trade secrets submitted to health agencies
Foreigners protected by:Universal Copyright Convention Berne Convention Rome Convention Inter-American Copyright ConventionInternational Commercial Arbitration Law (UNCINTRAL)
Highly Skilled Workforce
Technology Related
156,759
Business Related 89,433
Basic Science 24,278
Law 41,874
Source: Ministry of Education (www.mineduc.cl), 2006
608,043 (7% annual growth)
Offshoring
The 2006 A.T. Kerney survey placed Chile 7th in global country ranking attracting investments.
Chile's strength lies in the costs of doing business, particularly in terms of financial and tax expenses.
Our Long Term Agenda
To turn Chile into the “nearshore platform of choicenearshore platform of choice” within Latin America• Best academic center for professionals within the region• Most attractive place for offshoring professionals to live and work• A highly cosmopolitan, vibrant offshoring hub• A strong web of partnerships between global and Chilean firms
To generate 100,000 offshoring jobs within 5 years100,000 offshoring jobs within 5 years
To reach US$ 5,000 million in offshoringUS$ 5,000 million in offshoring exports by 2012
Investment Opportunities
Going Beyond Natural Resources (Chile’s Macro-regions)
Chile’s diverse climate and topography explain the richness and range of natural resources, which are distributed throughout the entire country.
Phase 1:Phase 1:Offshoring ClusterAquaculture ClusterMining Cluster Tourism Cluster
Phase 2: Phase 2: Processed Foods ClusterFruticulture ClusterFinancial Services ClusterSwine-Poultry Cluster
Chile’s Cluster Segmentation
Pérez, Carlota (Sussex), 2007
Chains Clusters
Mining
Fruticulture
Wine
Salmon & Mussels
Tourism
Source: Based on Carlota Pérez presentation at CORFO in 2005
Cluster Development: Towards value creation
Foreign companies
New developmentcenter
Natural Resources
Industry
Traditional Market
New Markets
Knowledge Know howI+DTechnology transfer
New ventures& Spin-off
Technology Investment Attraction Program : “Priority on Value Creation”
This Investment Attraction Program offers a range of incentives to help companies successfully establish in Chile.
NIVEL I:Basic using capacities
NIVEL II:Capacity to manage and use existing
NIVEL III:Development capacityto adapt and integrate
NIVEL IV:Design and Development capacity
NIVEL V:R&D based companies
of acquired technology
technologiesfor specific purposes
solutions incrementally in products and processes
High levels of applied knowledge in engineering
Technology development and transfer to the country
Valu
e
Low High
Food Industry
Today, Chile is ranked 17 out of more than 200 countries in the value of its exported food.
Chile is at an excellent position to move forward and establish itself as one of the ten principle food providers worldwide, within the next 5 years.
There are only four countries in the world whose GDP consists of more than 10% of foodstuffs, which is the case in Chile. Chile is surpassed by only Belgium and New Zealand.
Investment Opportunities in Food Industry
Precision agricultureTraceabilitySeed developmentFunctional foodsBioenergyProcess automationGrassland management and fertilizationDevelopment of diets and food products
Fruit Industry
Chilean agriculture has enjoyed a record growth in diversification, production, and investment, with a threefold value increase in its exports.
Agricultural production reached over US$ 2.4 billion in 2003, with fruit production accounting for 61%.
Between 1974 and 1986, fresh fruit production grew by 1200%.
Today, Chilean fruit is exported to over 70 countries, with the United States as the main destination for its fresh fruit.
Chile’s strategic positioning in the Southern Hemisphere allows it to provide fresh fruit during the US and European winter season.
Fresh Fruit Exports (1977-2003)
1977 2003
1.700
100
milli
on d
olla
rs
Chile is a worldwide exporter of 11 agricultural products, including:
•Grapes (1st worldwide)•Blueberries (1st)•Avocados (2nd)•Prunes (2nd)•Raspberries (2nd)
Meat Industry
Chile’s favorable sanitary conditions are a great advantage for the raising of animals and the exportation of meat as Chile is considered free of health risks, as the Foot & Mouth Disease and BSE or “mad cow disease”.
Beef production is an activity with potential for greater development and productivity, both in terms of primary production (cattle-raising and feeding) and in the industrial phase (slaughtering and meat processing).
The production of meat, exceeds 1,200 tons, of which 46% corresponds to poultry, 34% to pork, and 18% to beef.
• The meat industry is projected to grow almost 600% between 2003 and 2010.
• The production of poultry has been the most dynamic in the last 5 years. The poultry industry has seen a 71% increase in growth.
• Tariff and quota free beef exports to the US began January 1st, 2007. The EU has enjoyed a tariff of 0% since 2003 with an annual amount that has seen an increase of 100 tons per year (over the original amount of 1,000 tons).
Dairy Industry
The Chilean milk industry has reported significant advances in the last 30 years and the future prospective are very bright and encouraging.
The dairy industry doubled its production in the ‘90s and has continued this upward trend at a rate of over 7% annually.
According to estimates, Chile could increase its current production threefold by 2010 with the implementation of adequate technology.
The natural conditionals in Chile are ideal for the development of the Dairy industry as a first-class product and a new member of Chile’s top exports.
• The dairy industry is projected to grow 364% between 2003 and 2010.
• Cheese exports to the US grew 400% in 2004 as a result of the FTA.
• Chile is a member of the commercial organization Dairy Global Alliance along with five other countries: Argentina, Brazil, Uruguay, New Zealand and Australia.
Mining IndustryChile produces more than 36% of the world´s copper production from mines and a third of molibdenine production.
With respect to non-metals mining, it is the only world producer of natural saltpeter, and supplies more than 50% of the world´s iodine production as well as more than 45% of lithium carbonate.
In 2004, 16 thousand 780 million dolars of mining exports represented more than half of Chilemore than half of Chile´́s exports.s exports.In 2005, copper exports reached a record of 18.307 million dollars, 21% more than in 2004.The mining industry directly contributes around 8% of Chile´s GDP.
Fraser Report:Ranking of regulatory –mining potential among 64 mining districts
96 pts.
70 pts.
81 pts.
72 pts.
43 pts.
Mexico
Brazil
Peru
Argentina
Chile1°
8°
13°
16°
43°
Renewable Energy IndustryCORFO offers instruments to finance studies:
3 Contests to present NCRE projects (2005-2007)More than 100 projects have been approved If implemented, there is a potential to produce over 800 MW.Estimated investment of over US$ 1.2 millionSubsidies estimated at US$ 4.500.000
Economic study on the impact of “Ley Corta I y II”:Improves the internal rate of retunr by an average of 2%Great opportunities for small hidraulic, biogas and eolic projects.
Energy Projects
22
12 11
1
1821
6
0
14
29
5 5
0
5
10
15
20
25
30
35
Hydro Eolic Biomass Geothermal
2005 2006 2007
Forestry Industry
The forestry sector accounts for 3.8% of the country’s GDP.
Chile is ranked 17th in the world’s forestry exports.
Cellulose (or wood pulp) is the main forestry product and Chile is the world’s 5th-largest exporter and the 7th worldwide producer.
Exports of products with greater added value have increased over 20% per year during the last five years.
Forestry Exports (1994-2004)
1994 2004
3.500
1.500
X m
illion
dol
lars
Aquaculture Industry
Chile is currently the world’s second largest farmed salmon producer, after Norway, with exports worth over $1.4 billion USD.
Today’s salmon cluster is made up of some 200 companies—including equipment, food, vaccine suppliers, transport companies, quality control and certification centers, training centers, and other professional services.
Though streamlined, there are still some shortcomings in the industry. Technology is vital in the continued development and meeting the growing product demand in the increasingly selective North American and Asian markets.
Salmon Exports (1990-2005)
1990 2005
1.200
milli
on d
olla
rs
100
Salmon production accounts for 95% of the aquaculture industryThe value of Chile’s salmon exports has grown 1,000% in the last fifteen years. According to estimates, the salmon industry supplier market, excluding food production, is worth $400 million USD.
Strategic view: some key features on the Salmon Industry
IDB (2003): the largest natural cluster in the world. It is estimated that over 500 companies are involved in the cluster.Scattered production has fostered merging of companies. Currently two groups represents 29% of production.62% ownership to locals, and 38% foreign investors.If concessions are fully used, production could grow 39%. 72% production costs represented by feeding.Fish meal, oil, and pigments represent 95% of feeding costs.Improvements in food conversion rates and substitution of animal by vegetable proteins: the strategy against high prices.At the cutting edge of development, R&D is the only way to secure long-term competitiveness.Public-Private R&D projects (1990-2007: US$158 million):
1990-2005: US$24 million 2006-2007: US$134 million
Investment Opportunities: Value-creation
Losses related to diseases:Endemic pathogens. Over US$ 600 millions last per yearDevelopment of new vaccines.
Diets:Elaboration of new diets based on vegetable proteins v/s fish meal and oils.New functional foods, pigments and vitamins.
Genetics: Improving fish genetics to increase smolt production, disease management and controls, and conversion rates.
Environment:Management and technology development to avoid eutrification, sediment contamination and industrial wastes.Environmental analytics to develop technology and provide services for monitoring and chemical analysis, on fish as well as the environment.Improvement of water supplies (natural and potable).
Logistics: Transportation (wellboats), infrastructure, connectivity and security problems.
CORFO’s Financial Incentives
Regional Investment Incentives
Applies for Pre-Investment Studies
This incentive applies to all regions in Chile except for metropolitan Santiago.
To be eligible, your project must fulfill the following criteria:• New Investment Projects must involve a minimum investment of US $400,000. Expansion Investment Projects must involve a minimum investment of US $250,000.
• Financial support: CORFO offers matching funds for studies required for evaluating the feasibility of your investment project.
• Maximum: up to 50% of the total cost, 2% of total investment, with a ceiling of US $60,000.
Area-specific Incentives
Grants and Tax Incentives:D.F.L. 15D.L. 889Arica PlanTocopilla LawAustral PlanNavarino and Tierra del Fuego Laws
Special Economic Zones:Arica an ParinacotaValparaisoArauco, Lota and CoronelAustral Zone and Palena Province
Launched in 2000 by CORFO, to attract and facilitate technology-intensive foreign investments.
The Program encourages foreign investment by offering a range of services to help companies set up successful ventures in Chile.
To date, the program has assisted over 50 companies in establishing offshore operations in Chile, ranging from international services (contact centers and shared service centers) to world class biotech companies.
High Technology Investment Program
Applying for Financial Incentives
Whether your investment project is located in Santiago or elsewhere in Chile, you can apply for financial incentives to support project development.
To be eligible for financial incentives, a project muse fulfill at least the following criteria:
The project must be proposed by a foreign company or institution.The project must involve research activities and technological development, adding value to the economy. Projects must considerminimum investment of US $500,000.Applications must be made before the project location is decided.
Application Process
Pre-investment Phase
All incentives are rendered in the form of refunds
Investment Phase
CORFO’s Innovation Incentives
CORFO funds joint activities of technological centers and businesses in areas of strategic impact and public interest.
It enables Chilean companies to innovate, both in products and processes; to use top quality technological equipment and gatherthe world’s most advanced information through research abroad and the hiring of international experts.
Furthermore, CORFO promotes the start up of new ventures providing grants to seed capital projects and business incubators.
CORFO’s Innovation Incentives
CORFO’s main Innovation Incentives are:
Contact Us
Head Office
Contact Us
Investment Representatives Abroad
THANK YOU!For further information please visit our website at:
http://www.investchile.com