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WHY

WHY. ARGENTINA. INDUSTRIAL VALUE CHAIN OPPORTUNITIES. MARCH 2019. OUTSTANDING OPPORTUNITIES TO PARTICIPATE IN VALUE CHAIN OF SPECIFIC INDUSTRIES. AUTOMOTIVE. 11 top automotive producers already in the country Regime for the development of autoparts manufacturers. RENEWABLE ENERGY.

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WHY

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  1. WHY ARGENTINA INDUSTRIAL VALUE CHAIN OPPORTUNITIES MARCH 2019

  2. OUTSTANDING OPPORTUNITIES TO PARTICIPATE IN VALUE CHAIN OF SPECIFIC INDUSTRIES AUTOMOTIVE • 11 top automotive producers already in the country • Regime for the development of autoparts manufacturers RENEWABLE ENERGY • Exceptional wind and solar conditions • Government law to double renewable capacity to 10 gb by 2025 OIL & GAS • 2nd largest shale gas and 4th largest shale oil reservoirs in the world • National plan to double oil and gas output by 2025

  3. AUTOMOTIVE INDUSTRY IN ARGENTINA

  4. AUTOMOTIVE INDUSTRY IS HIGHLY DEVELOPED THERE ARE 11 MANUFACTURING FACILITIES • PRODUCTION: 557,971VEHICLES* 10% of thevalueadded of themanufacturingindustry #22 world’ s largestproducer #3 Latam’ s largestproducer ROSARIO (SANTA FE) CÓRDOBA LABOR 78,000WORKERS EL PALOMAR (BUENOS AIRES) 150,000+ in auto-partsmanufacturers EXPORTS 15COUNTRIES 500+ MANUFACTURINGCOMPANIES OF AUTO-PARTS • INVESTMENTS: USD 3,2BN+ IN 2018-2020 Sources: ADEFA, ANFAVEA, OICA and Ministry of Labor *Averageproduction in theperiod 2013-2018 ** Average sales in Argentina and Brazil in theperiod 2013-2018

  5. THE GOVERMENT HAS A STRATEGIC PLAN IN PLACE FOR THE AUTOMOTIVE INDUSTRY THE NATIONAL GOVERNMENT HAS A PLAN IN PLACE FOR THE AUTOMOTIVE INDUSTRY • HISTORICAL AGREEMENT FOR THE AUTOMOTIVE INDUSTRY – “PLAN 1 MILLÓN” • Involvingnationalgoverment, unions and automotivecompanies • REGIME FOR THE DEVELOPMENT OF AUTOPARTS MANUFACTURERS • Increasing integration of localy manufactured autoparts by providing specific tax incentives VISION PRODUCTIVE COMPLEMENTARITY WITH BRAZIL SPECIALIZATION NEW MARKETS DEVELOPMENT PLAN 1 MILLION 2013-2016 2019 2023 ANNUAL PRODUCTION 600 K 750 K 1 MN NATIONAL INTEGRATION LEVEL SCALE PRODUCTIVITY DEMAND OF LOCAL AUTO PARTS COST 35% 40% 25% 5

  6. SPECIFIC OPPORTUNITIES IN AUTOPARTS MANUFACTURING SHORTAGE OF SUPPLY AND INCREASING DEMAND, PRODUCT LOGISTICS BARRIERS AND THE DEVELOPMENT OF NEW TECHNOLOGIES REPRESENTS SOME OF THE GAPS IN THE SECTOR THAT NEED TO BE TACKLED BODY PARTS (PROCESS OF HOT-STAMPING) PARTSOF SEATS BATTERIES AND ITSPARTS HEADLIGHTS GEAR BOX GLASS ELECTRONIC CONTROLLERS/ SENSORS PARTS OFWIRE HARNESS ONBOARD COMPUTERS/ INFOTAINMENT MOTOR BLOCK ANDOTHER ALUMINUM FOUNDRYPARTS TIRES ALLOYWHEELS SHORT TERM LONG / MEDIUM TERM 6

  7. RENEWABLE ENERGY IN ARGENTINA

  8. FOSTERING RENEWABLES IS A STRATEGIC GOAL FOR THE GOVERNMENT • THE GOVERNMENT IMPLEMENTED THE FOLLOWING STRATEGY • New lawestablishesthatrenewableenergiesaccountfor 20% of thenationalelectricenergyconsumptionby 2025 • RenovAr Program: Public tenders • Private Market: private agreements, self-generation or co-generation 33 GW 54 GW 10 GW ADDITIONAL CAPACITY • RENOVAR TENDER RESULTS Source: Ministry of Energy 8

  9. LOCAL CONTENT LEGAL FRAMEWORK TO PROMOTE LOCALIZATION As of september 2017 new tariffstructure and content ruleswere introduce in order to promotethewind turbine manufacturerslocalization in argentina, and fosterthedevelopment of suppliervaluechain I. 20% FISCAL CREDIT • Renewableenergyfarmsthatreach 30% of lcd(*) are eligible for fiscal creditequivalent to 20% of thevalue of alltheirlocal components • II. WIND TURBINES RULE • Increasing local addedvaluefor wt followinganintegrationtableau: • 35% up to june 2020 • 45% from july 2020 up to december 2021 • 50% from january 2022 up to december 2023 • III. TARIFF INCREASE FOR WIND TURBINES • 14% tariffwasintroducedforwind turbines IV. 0% TARIFF FOR NON PRODUCED DOMESTICALLY PARTS AND COMPONENTES OF WIND TURBINES • Manufacturersshallfollow local content rules but are able to import at 0% tarifftheparts and componentes thatcannot be localized in the short run LOCAL WIND TURBINES COMPETITIVENESS IS LARGELY INCREASED VS. IMPORTED OPTIONS (*) Local Content Declared at the Renovar Auctionsforanyrenewableenergy Project Source: Ministry of Production 9

  10. WIND TURBINES DEMAND ESTIMATION • ACTUAL CAPACITY DISTRIBUTED AMONG TOP MANUFACTURES • POTENTIAL DEMAND ESTIMATION • DELIVERY LEAD TIMELINE FOR AWARDED PROJECTS 890 MW 348 MW DEC 2019 JUN 2020 JUN 2019 2018 ~ 500 MW ~ 950 MW ~ 400 MW ~ 600 MW 247 MW 1.5 GW 195 MW REMAINING TENDERS TO REACH MANDATORY 20% OF RE IN ENERGY MATRIX IN 2025 2.1 GW 200 MW 1.5 GW INSTALLED CAPACITY WITH PRIVATE PPAS IN 2025 185 MW 170 MW 5.1 GW WIND CAPACITY TO BE INSTALLED 2019 – 2025 2.235 MW TOTAL 10 Source: Ministry of Energy of Argentina, Private estimation by AITPA

  11. OIL & GAS IN ARGENTINA

  12. UNCONVENTIONAL OIL & GAS • 2nd largest shale gas and 4th largest shale oil reservoirs in the world • Quality of the resource matches top global basins • National plan to double gas and oil output by 2025 • Top players already present in the country performing exploration and production projects • Significant increase in oil & gas wells 2224 1619 1118 Source: Sec. of Energy. 12

  13. VACA MUERTA WILL FOSTER A SIGNIFICANT INDUSTRIAL DEVELOPMENT • The development of Vaca Muerta willincreasedemand in oilservices, capital goods, logistics, chemicals, materials and maintenance 13

  14. HOW WE CAN HELP We promote the internationalization of Argentine companies and facilitate private investments in Argentina OUR SERVICES: NETWORKING DUE DILIGENCE SUPPORT IDENTIFICATION OF OPPORTUNITIES AND LOCATION FACILITATION IMPROVEMENT OF BUSINESS CLIMATE AFTERCARE 14

  15. FOR MORE DETAIL ABOUT INVESTMENT OPPORTUNITIES WHERE IN ARGENTINA SELECTED INVESTMENT OPPORTUNITIES WHY ARGENTINA BY SECTOR DOING BUSINESS IN ARGENTINA

  16. Francisco Urangafuranga@inversionycomercio.org.arMariano Milletmmillet@inversionycomercio.org.ar María Melinsky mmelinsky@inversionycomercio.org.ar Francisco Lafuenteflafuente@inversionycomercio.org.ar Phone: +54 11 5239 4490 welcome@investandtrade.org.ar

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