LATIN AMERICA Region of Contrasts & Opportunities

1. LATIN AMERICARegion of Contrasts & Opportunities International Festival of Business 15th July, 2014

2. LatAm Macro Overview

3. The UK traditionally has strong links with Latin America (in 1808, 40% of UK exports went to LatAm!), but these links weakened in the 20th Century • Other European countries trade much more with LatAm (Germany trades 4 times more than the UK with LatAm) • This indicates huge potential to grow trade with LatAm. Both the private & public sector have now realised this and are pushing for increase in trade • Several of the most-watched emerging markets are in LatAm (Brazil from BRICS, Mexico from MINT, Colombia from CIVETS) • Regional GDP growth of 3% in 2013 (source: ELAC) LatAm Overview: Opportunities #IFB2014 #LatAm

4. The Region • 19countries • 1 in North America • 2 in the Caribbean • 6 in Central America • 10 in South America 21 million square kms or 14.1% of the earth's surface GDP US$ 5.6 trillion in 2012 Population of 589 million Per capita Gross National Income US$ 9,070 (Source World Bank/ECLAC)

5. Macro snapshot

6. Pro-Mexico Video

7. The Power of the Pacific Alliance What is it and why?

8. An ocean of opportunities… • Combined market of over 200 millionconsumers • Over half of LatAm Global Trade • Depth & Breadth of FTA’s provide platform for growth with USA & Asia • Main sectors • Natural resources • Financial & Bus. Services • Software & IT services • BPO • Food & Drink • Consumer goods

9. Ease of doing business & market access

10. FCO LatAm Economic Indicators Index OFFICIAL

11. Why Colombia?

12. Regional Opportunities Case studies of Success

13. Colombia: Regional economic sectors Caribbean Region • Caribbean:tourism, logistics, petrochemicals, construction materials, import/export platform to the Caribbean/Atlantic. • Central/Andean: services, high value-added manufacturing, hub to cover domestic market, specialized agroindustry. • Pacific:manufacturing, agroindustry, logistics, biotechnology, export platform to the Pacific Rim. • Orinoquia: agriculture, forestry, biofuels, hydrocarbons. • Amazon:conservation, ecotourism (Leticia). Infrastructure & Transport Central / Andean Region Oil & Gas Pacific Region Orinoquía Region Retail Financial & Professional Services Amazon Region UK Opportunities

14.  "quality you'd expect at prices you wouldn't"

15. Mexico: Regional Economic Sectors Aerospace & Automotive • Aerospace & AutomotiveWith an average 20% annual growth rate since 2004, Mexico has become a global leader in aerospace sector, boasting 270 companies and supporting entities Oil & Gas Oil and GasMexican production at almost 2.5 Million barrels per dayLast year’s Energy Reform and secondary allow for private investment Retail Healthcare & Life Sciences RetailGrowing middle class drive demand for consumer electronics, clothing and household goods Healthcare and Life SciencesThe Federal Commission for Protection Against Sanitary Risk has been working hard to reduce the barriers to entry for new medicines entering the country. Demand for services & products is high

16. Chile: Regional Economic Sectors • North (Atacama Desert): mining, mainly copper of which Chile is the world’s largest producer. Also Lithium and Molybdenum. Related Energy and Water. The climate is similar to Northern Africa. • Central Valley, with capital Santiago and Valparaíso (port and seat of Congress): Renewable Energy, Infrastructure, mining, manufacturing, agriculture, wine, agribusiness,, retail and financial services. The climate is similar to Madrid and Rome • South: Renewable Energy, forestry, salmon farming, fishing, agriculture and, in Concepción, petrochemicals and steel production. This region is rainy and similar to the UK. • Fjords and Tierra del Fuego: tourism, agriculture, aquaculture, fishing, gas and oil production, coal mining, wood pulp & board. This sector is snowy and windy, very similar to Scandinavia. Antofagasta Mining Fishing Agriculture 16% of GDP 11% of GDP Manufacturing Services Agriculture Cattle Breeding 75% of GDP Santiago 49% of GDP Concepción 7% of GDP 9% of GDP Forestry Fishing Agriculture Mining

17. "…building an organ that is a match for you, is available for you, is something that wasn’t even fathomable ten or 15 years ago…"

18. Growing LatAm Presence of UK Brands

19. Recommendations • Latin America has a wide mix of business opportunities for UK plc: • Vast divergence in market size and business environments across countries and country groups (e.g. Mercosur, Pacific Alliance, the Caribbean and Central America). • We must look at different ways to maximise UK opportunities in different markets and regions, even within markets. • Brazil remains the number one prospect in terms of market size and growth potential, but its business environment remains weak: • Its size means continued opportunities for exports and investment, but low competitiveness, high protectionism and corruption could hinder UK success. • BUT Pacific Alliance countries provide the best balance of opportunities in terms of both growth outlook and ease of doing business. • Encouraging businesses in key sectors could bring quicker wins in these economies than in other markets.