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May 2007

PERU. INVESTMENT OPPORTUNITIES IN. May 2007. Japan and Peru today: Trade. Peru’s main exports to Japan (2006): Copper Zinc Fishmeal Silver Japan’s main exports to Peru (2006): Motor vehicles Transport equipment Electronic devices Car and truck tires. WHY INVEST IN PERU?. 2004. 2005.

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May 2007

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  1. PERU INVESTMENT OPPORTUNITIES IN May 2007

  2. Japan and Peru today:Trade • Peru’s main exports to Japan (2006): • Copper • Zinc • Fishmeal • Silver • Japan’s main exports to Peru (2006): • Motor vehicles • Transport equipment • Electronic devices • Car and truck tires

  3. WHY INVEST IN PERU?

  4. 2004 2005 2006 GDP (var%) 4,8 6,4 8,03 Private Investment (var %) 9,1 13,9 20,1 Public Investment (var %) 5,7 12,2 13,0 Employment in companies with over 10 employees (var %) 2,7 4,5 7,3 Exports (var % in US$) 40,9 35,3 36,9 Imports of capital goods (var % in US $) 19,6 29,6 35,4 GDP of the construction sector (var %) 4,7 8,4 14,7 Tax Collection (var %) 13,6 14,3 27,8 Credit System of the Private Financial Sector 4,7 7,9 16,6 Pensions Funds (var%) 17,5 25,5 41,3 IGBVL General Index of the Stock Exchange Market of Lima (var %) 52,3 29,4 168,3 Investment plays an important role in the country’s Economic Growth and signals a promising future Source: Central Reserve Bank of Peru, National Institute of Statistic and Information and SUNAT.

  5. Peru 8,03 6,4 5,2 5,2 3,9 Sustainable economic growth with annual forecasted rate greater than 8% 8 6 GDP Growth (Annual variation %) 4 Developed 2 World 0 80 82 84 86 88 90 92 94 96 98 00 02 04 06 Source: International Monetary Fund and the Central Reserve Bank of Peru.

  6. 23 750 0,7 22 000 0,6 17 336 0,5 17 000 0,4 12 000 41% 37% 0,3 35% 9 090 7 714 6 955 7 026 0,2 7 000 18% 0,1 10% 2 000 0 2000 2001 2002 2003 2004 2005 2006 Exports in millons US$" % Exports Growth (base 2000)" Annual Exports growth greater than 30% Accompanied by private investment growth (average annual % variation) 25.0 25.0 Private Investment grew Private Investment grew 20,1% in 2006* 20.0 20.0 Private Private Investment Investment 12 809 15.0 15.0 10.0 10.0 5.0 5.0 0.0 0.0 - - 5.0 5.0 - - 10.0 10.0 05 05 06 06 01 01 02 02 04 04 03 03 Source: Central Reserve Bank of Peru. * Forecasted

  7. Rise in the commercial exchange (Millions of US$) Increase in the imports of capital goods ( Millions of US$) Capital goods for the Industry Transport Equipment Others Source: Central Reserve Bank of Peru.

  8. Peru is progressively reducing its fiscal deficit (% of GDP) By increasing its central government tax revenues 2,5 2,5 2,0 1,5 1,0 0,5 0.0 0,0 -0,5 -0,4 -1,0 -1,5 -1,1 -2,0 -1,7 -2,3 -2,5 -2,5 -3,0 -3,3 -3,5 2006 2007* 2004 2005 2000 2001 2002 2003 Source Central Reserve Bank of Peru. * Forecasted by the Ministry of Economics and Finance Source: SUNAT

  9. Exchange rate in Latin America Inflation in Latin America (Annual var. %) (Index January 2001=100) Peru Peru Peru 205 Argentina Argentina Brasil 30 Brasil Brasil Chile 185 25 Chile Chile Colombia 165 Mexico Mexico Mexico 20 145 15 10 125 5 105 0 85 2000 2001 2004 2005 2002 2003 - 5 01 06 03 02 04 06 - - - - - - E A N A N M Source: Bloomberg and Central Reserve Bank of Peru . Source: Central Reserve Bank of Peru, Brasil, Chile, Mexico and Argentina. ... in a framework of macroeconomic stability ...

  10. 17 275 18 000 0,5 0,45 16 000 14 097 0,4 12 681 14 000 0,35 12 000 10 194 9 598 0,3 8 613 10 000 8 180 22,5% 0,25 8 000 0,2 11,2% 6 000 24,4% 0,15 11,4% 6,2% 4 000 0,1 2 000 0,05 Net International Reserves (Milions of dollars) 5,3% 0 0 2000 2001 2002 2003 2004 2005 2006 Net International Reserves (in US$ Millions)" Annual Variation Source: Central Reserve Bank of Peru. With increasing Net International The careful and responsible management of our Reserves that represent more than 12 economic program has allowed us to keep our months of imports country risk index among the lowest in the region. JP Morgan Index EMBI+** Updated 23 March, 2007 Source : Bloomberg

  11. Peru offers a favorable legal framework for foreign investment • Non discriminatory treatment. • Irrestrictive access to most economic sectors. • No performance requirements. • Free transfer of capital. • Free competition. • Guarantee for Private Property. • Freedom to purchase stocks from locals. • Freedom to access internal and external credit. • Freedom to pay royalties. • Network of investment agreements and member of ICSID and MIGA Legal Framework: Constitutional provisions, “Law for the Promotion of Foreign Investment”, Legislative Decree N° 662, “Framework Law for Private Investment Growth”, Legislative Decree N° 757, “Law for the Promotion of Private Investment in Infrastructure and Public Service Works”, Approved by Supreme Decree N° 059-96-PCM

  12. Peru has concluded the negotiations for the Trade Promotion Agreement (TPA) with the United States Free and preferential market access to: • United States • European Union • Mexico • Chile • Andean Community of Nations • MERCOSUR • Thailand* Trade Agreements under negotiation or consideration: Singapore Canada EFTA China

  13. Main Investment Opportunities by Sectors Forestry Plantations Agribusiness and Agro exports Fishing and Aquaculture Textile and other manufactures Mining and Hydrocarbons Tourism and other services INFRASTRUCTURE

  14. Sowing opportunities… Agribusiness sector

  15. Productivity of the Peruvian Agribusiness Products Position by Product Product World Latin America Mango 1 1 Asparagus 1 1 Sugar Cane 1 1 Grape 3 1 Avocado 5 4 Coffee 6 4 Paprika pepper 10 3 Agribusiness Products Agribusiness exports (US$ MM) Exports of Agribusiness products (Millions of US$ FOB) Agribusiness Exports Markets (2006)

  16. Fishing and Aquaculture Power

  17. ... Fishing and Aquaculture Advantages ... "El Niño“ Phenomenon Source : PROMPEX. Species under-worked with high potential: Horse Mackerel, Mackerel, Giant Squid or “Pota”, among others. Source : Prompex. • World’s first exporter of fishmeal (1,8 to 2 million tons per year), since 1993. • World’s first exporter of fish oil (more than 150 thousand tons per year), since 1999. Source: FAO, TradeMap and UNCTAD.

  18. Mining Sector

  19. Production Ranking 2006 Latin America Worldwide Copper 2 3 Gold 1 5 Zinc 1 3 Silver 1 1 Lead 1 4 Tin 1 3 Molybdenum 2 4 Bismuth 2 3 Tellurium 1 2 Mining Sector Advantages Peru has an outstanding competitive position in worldwide mining, leading this sector in Latin America Mining Mining exports exports ( ( US$ US$ million million ) ) Source: Ministry of Energy and Mining of Peru Molybdenum production has • risen by 28% in 2005, and it became the third metallic mining export product (US$100 million/month) Bismuth production totaled • 1000 MT and Tellurium production 28 MT, in 2005. Source: Central Reserve Bank of Peru

  20. Knitting and Sewing the future …

  21. Trademarks served by Peruvian Industries Abercrombie & Fitch Izod Kenneth Cole Textile Exports – 2006 Main Markets Adolfo Dominguez JC Penney Polo Ralph Lauren Ara Intersales J. Meneses G. Perry Ellis International Armani Exchange Massino Dutti Ragman Calvin Klein Nautica Reebok Donna Karan Inc. New Balance Russell Corporation DKNY Lacoste The Gymboree Corp. Duck Head Apparel Lands End Tommy Hilfiger Eddie Bauer Levy Strauss Vanity Fair Guess Oakley Saks Inc. Inditex/Zara Palacio de Hierro Textile and Apparel Sector Textile Exports (Millions US$) Source: BCR “Proximity to the USA and same time zone provide Peruvian exporters shorter delivery and replenishing times” Source: PROMPEX

  22. Forestry sector

  23. Forestry Sector Peru is a country with excellent conditions for forestry. Its rich natural resources place it second in Latin America and tenth in the world. Forestry Exports (US$ Millions) Source: Operational Exporting Plan . Maximize. 2004 • Forestry exports have increased from US$ 26 MM in 1996 to US$ 168 MM in 2005. This shows a growth rate of 26% per year the last 9 years. • Peru has potential to export US$ 3 bn per year in woods and by-products. Source: SUNAT.

  24. EPS Grau Road infrastructure Airports Ports Telecommunications Supply driking water for Lima Hydrocarbons Sanitation Energy Costa -Sierra Investment Opportunities in Infrastructure Chachapoyas Piura Paita Port T. Cajamarca Salaverry Port T. Pucallpa Chimbote Port T. IIRSA Center Branch Road Network 4 Puerto Maldonado Regional Pipelines Interocean Road Corridor L.T Machupicchu - Cotaruse Cusco Pisco Port T. Ayacucho Nazca Arequipa Juliaca Ilo Port T. Tacna

  25. Bet on the future … Tourism Sector

  26. Peru Strong figures Strategic location Excellent opportunities

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