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WHY ARGENTINAFEBRUARY 2019
ARGENTINA HAS STRONG FUNDAMENTALS
Large and diversified economy
3rd largest GDP in LatAm, USD 475 Bn*
3rd highest GDP per capita (PPP), USD 20,500
~43 Mn pop (~60% under 35). Access to 270 Mn pop in Mercosur
Vast availability of natural resources
8th largest country in the world, with 53% of agricultural land
Top global exporter of soybean, corn, lemon, lithium, among others
750.000 Km2 of high potential mining areas and 340 projects at initial stage
2nd largest shale gas and 4th largest shale oil reservoirs in the world
*Source: World Economic Outlook, IMF
High quality human capital
Educated middle class and qualified labor force
#1 in English Proficiency and #2 in Human Capital Index in Latin America
2
National Productive Plan. Key reforms and initiatives
GOVERMENT HAS IMPLEMENTED SPECIFIC MEASURES TO IMPROVE BUSINESS CLIMATE
• Capital Markets Law
• Sovereign financial needs met until end of 2019
• Renewable energy tenders oversubscribed
• New Public-Private Partnership (PPP) law
COST OF CAPITAL
ENERGY & INFRASTRUCTURE
• Productivity agreements by sector
• Reduction of labor risk law
• Antitrust law
• SME Promotion law
LABOR COSTS
OPEN COMPETITION
• Income tax reduction plan in execution
• Reduction of revenue tax in provinces
• More than 60 markets for 100 products opened or re-opened
• Argentina hosted G20 Summit 2018
TAX & FISCAL EFFICIENCY
INSERTION TO THE WORLD
• Strong incentives to train technology professionals
• Specific incentives for software development
• Plan to reduce costs of 1% of GDP by business simplification measures
• Instituted process to establish corporations in 1 day (SAS)
INNOVATION & TECHNOLOGY
EASE OF DOING BUSINESS
3
MORE THAN USD 300 BN OF INVESTMENT OPPORTUNITIES ACROSS SECTORS
USD Billion
55+
INFRAESTRUCTURE
ROADS & HIGHWAYS 17
RAILWAYS 11
AIRPORTS & PORTS 6+
WATER & SANITATION 6
TELCO NETWORKS 5+
REAL ESTATE 5+
URBAN MOBILITY 4
OIL & GAS 170
MINING 30+
RENEWABLE ENERGY 15
HYDRO POWER 10
THERMAL ENERGY 6
NUCLEAR ENERGY 2
POWER GRID 3
IRRIGATION 5
ANIMAL PROTEIN 4
FORESTRY / PULP 2
AQUACULTURE 1
AUTOMOTIVE INDUSTRY
FOOD & BEVERAGE
CONSUMER PRODUCTS
MACHINERY & EQUIPMENT
BASIC MATERIALS
TOURISM
PROFESSIONAL SERVICES
BIOTECHNOLOGY
PHARMA
SOFTWARE DEVELOPMENT
230+
ENERGY & MINING
10+
AGRIBUSINESS
10+
MANUFACTURE / INDUSTRIAL GOODS
5+
VALUE ADDED SERVICES
4
ACTIONS ARE IN PLACE TO REACH FISCAL SURPLUS
FEDERAL DEFICIT REDUCTION IS ACCELERATING SUCCESSFUL FISCAL AGREEMENT WITH PROVINCES
FISCAL SURPLUS BY PROVINCE
-4.3%-3.9%
-2.4%
0.0%
1.0%
2016 2017 2018 2019 2020
PRIMARY FISCAL SURPLUS, % OF GDP
FIRST HALF 2017 FIRST HALF 2018
9 PROVINCES WITHPRIMARY SURPLUS
20 PROVINCES WITHPRIMARY SURPLUS
5
ARGENTINA’S ECONOMY HAS BECOME MORE COMPETITIVE
ARGENTINA’S CURRENCY DEPRECIATED VS. PEERS
Note: Basis 100 dated on Dec 2015.Source: Central Bank of Argentina, ITCRM (Índice de tipo de cambio real multilateral)
10098
159
136
May
-16
Ap
r-1
6
Dec
-15
Oct
-16
Au
g-1
6
Mar
-16
Jan
-16
Ap
r-1
7
Feb
-16
Mar
-17
Jun
-18
Jul-
17
Jun
-16
Jul-
16
Jan
-18
Sep
-16
No
v-1
6
No
v-1
7
May
-17
Dec
-16
Jan
-17
Feb
-17
May
-18
Oct
-17
Au
g-1
7
Dec
-17
Jul-
18
Jun
-17
Au
g-1
8
Sep
-18
Feb
-18
Oct
-18
Sep
-17
No
v-1
8
Ap
r-1
8
Dec
-18
Mar
-18
Jan
-19
36%
AR$ MULTILATERAL EXCHANGE RATE INDEX*
6
OPPORTUNITY TO PARTICIPATE IN ARGENTINA’S ENERGY REVOLUTION
7
• 2nd largest shale gas and 4th largest shale oil resource in the world
• Opportunities to partner or bid
• Room to build midstream infrastructure
• Vast offshore potential
DESIRED VACA MUERTA HAYNESVILLE MARCELLUS EAGLE FORD WOLFCAMP
TOC (%) >2 3-10 0.5-4 2-12 3-5 3
THICKNESS (M) >30 30-450 60-90 10-60 30-100 200-300
RESERVOIR PRESSURE (PSI) HIGH 4,500-9,500 7,000-12,000 2,000-5,500 4,500-8,500 4,600
Vaca Muerta is a high quality resource compared to other world class basins
NUMEROUS MINING PROJECTS TO BE DEVELOPED
• Argentina is one of 3 countries in Lithium triangle
• Opportunities in copper, gold, silver, etc.
• 750,000 Km2 of high potential mining areas
• 183,000 Km2 of already granted mining rights
- 25 advanced prospects
- 14 production mines
GOLD
COPPER
URANIUM
POLYMETALLIC
LITHIUM
LEAD-ZINC
IRON
PROSPECTIVE AREAS
8
EXCEPTIONAL CONDITIONS AND PLANS FOR RENEWABLE ENERGY
• Solar conditions in the North and wind conditions in the South among the best in the world
• Government law to double renewable capacity to 10 GW by 2025
64%43%
30%
27%
2015
10%
2%20%
2015 2025 (projected)
% OF POWER CONSUMED
THERMAL HYDRO NUCLEAR RENEWABLES
10 GWADDITIONALCAPACITY
33 GW 54 GW
9
OUTSTANDING POSITIONING IN GLOBAL SERVICES
• Exceptional talent for high added-value activities
• Highly competitive cost structure
• Advantageous time zone
4 OUT OF 11 “UNICORNS” IN LATAMARE FROM ARGENTINA
>5000 EMPLOYEES
1000 - 5000 EMPLOYEES
100 - 1000 EMPLOYEES
<100 EMPLOYEES
30+ TECH HUBS ACROSS THE COUNTRY
10.000+ EMPLOYEESTOP GLOBAL SERVICE FIRMS ALREADY ESTABLISHED SHARED SERVICE CENTERS
10
ARGENTINA IS THE TOP TOURISTIC DESTINATION IN THE REGION
INTERNATIONAL
Total expenditure (USD): 5.1 Bn
#1 position in LATAM in Country Brand Awareness
DOMESTIC
• Trips: 51.4 Mn
• # tourists: 18.2 Mn (41% of population)
• Average stay: 5.1 days
• Total expenditure (USD): 9.3 Bn
Source: Secretary of Tourism / INDECUNWTO & Central Bank.
Argentina 6.70
Brazil 6.59
Chile 6.45
Peru 4.03
Colombia 4.03
Million arrivals
5% CAGR 2015-2018
• Hotel and eco/theme park opportunities identified in most provinces
• Unprecedented investments in air travel and infrastructure concluded
• Strong government support
1
2
3
11
TRADITIONAL SECTORS KEEP DRIVING THE ECONOMY
• Outstanding opportunities to participate in value chain of automotive, renewables and O&G industries
• Several engineering & construction opportunities
MANUFACTURING
• Ideal conditions to establish Pulp & Paper plants
• Aquaculture program under development
• Argentina recovering beef industry leadership
AGRIBUSINESS
CUYO:WINE, DRIED FRUIT.
CENTER/EAST:SOY, WHEAT, CORN, SUNFLOWER, PEANUT. CATTLE RAISING
PATAGONIA:FISH. FRUIT.
NORTHWEST:SOY, CORN, SUGAR CANE
NORTHEAST:RICE, SOY, CORN, YERBA MATE, TEA. FORESTRY. CITRUS INDUSTRY.
CÓRDOBA
EL PALOMAR(BUENOS AIRES)
ROSARIO(SANTA FE)
+ 500 Manufacturing Companies of auto-parts
11 manufacturing facilities
Air conditioning systems, suspension systems, transmissions, braking and engine components, tires, bateries, oil and air filters, pumps, seats, etc.
Sources: ADEFA, ANFAVEA, OICA and Ministry of Labor 12
4th MOBILEOPERATOR + MVNOs
FTTH + REFEFO
DATA CENTERS
CELL COVERAGEEXPANSION (TOWERS) 2,000 - 5,0001
2
3
4
1,400
1,000 – 3,000
Build a further 20 – 50K “neutral” cell towers to improve network coverage and quality
Complement ARSAT’s fiber optic network connecting homes (last mile) and illuminate ARSAT’s fiber optic network to reach 1,200+ towns
Develop a regional hub for massive data centers
600 – 1,200Create a 4th Mobile Network Operator.10-15 new players acquired MVNO licenses during the past 2 years
TELECOMMUNICATIONS PRESENT OPPORTUNITIES OF USD 7 BN+
USD Billion
13
UNDER CURRENT ADMINISTRATION, COMPANIES ANNOUNCED INVESTMENTS FOR MORE THAN USD 135BN+
Canada8.2
US8.7
México3.3
Argentina81.0
Brasil1.9
UK4.0
Germany1.2
Spain5.8
France3.6
Italy2.2 China
3.8
USD Billion
* From 12/11/15 to 07/20/2018. Only includes projects with declared investment amounts.
Japan1.0
14
INVESTMENT ANNOUNCEMENTS BY SECTOR
55.5
12.610.6 9.8 9.1 8.5 7.7 6.7 5.4
3.5 2.9 1.6 1.3 0.4
OIL &
GA
S
MIN
ING
REA
L ESTATE
REN
EWA
BLE EN
ERG
Y
PO
WER
GEN
ERA
TION
TMT
TRA
NSP
OR
TATIO
N &
INFR
ASTR
UC
TUR
E
MA
NU
FAC
TUR
ING
CO
NSU
MER
GO
OD
S
AG
RIB
USIN
ESS
FINA
NC
IAL
HEA
LTH
RET
AIL
KN
OW
LEDG
EB
ASED
SERV
ICES
USD Billion
* From 12/11/15 to 07/20/2018. Only includes projects with declared investment amounts. 15
OUR SERVICES:
We promote the internationalization of Argentine companies and facilitate private investments in Argentina
HOW WE CAN HELP
IDENTIFICATION OF OPPORTUNITIES AND
LOCATION
NETWORKING DUE DILIGENCE SUPPORT
FACILITATION IMPROVEMENT OF BUSINESS CLIMATE
AFTERCARE
16
FOR MORE DETAIL ABOUT INVESTMENT OPPORTUNITIES
SELECTED INVESTMENT OPPORTUNITIES
WHERE IN ARGENTINA
WHY ARGENTINA BY SECTOR
DOING BUSINESS IN ARGENTINA
17
Phone: +54 11 5239 [email protected]