Argentina: A Strategic Investment
Destination to Meet the Demand of
Global Markets
Agribusiness and Agricultural Machinery
Undersecretariat of Investment Development
Ministry of Foreign Affairs, International Trade and Worship
June 2011
Agribusiness: Global trends place it as a key sector
Global trends
-Population growth
-Food & energy demand
expansion
-Climate change
-Manufacturing and
services outsourcing
-R&D in emerging
markets
2
Agribusiness, the sector’s potential: A view from the demand
Evolution and Projection of Vegetable Oil Imports
(In kt)
16,000
European Union-27
China
India
•The demand for
foodstuff is expanding
rapidly in the last
years.
14,000
12,000
10,000
8,000
•Vegetable oils’
demand is increasing as
a result both of a
higher consumption as
food and its role in the
production of biofuels.
6,000
4,000
2,000
(p
)
20
16
20
15
(p
)
(p
)
20
14
(p
)
(p
)
20
13
(p
)
20
12
(p
)
20
11
20
10
20
09
20
08
20
07
20
06
20
05
0
Source: SUINV based on Agricultural Outlook OECD/FAO
3
3
Agribusiness, the sector’s potential: A view from the demand
Evolution and Projection of Powdered Skim Milk
Imports
(In kt)
180
Mexico
•Developing countries will provide
the main source of growth for
world agricultural production,
consumption and trade.
China
160
140
120
•Demand from developing
countries is driven by rising per
capita incomes and urbanisation,
reinforced by population growth.
100
80
60
40
20
20
10
(p
)
20
11
(p
)
20
12
(p
)
20
13
(p
)
20
14
(p
)
20
15
(p
)
20
16
(p
)
20
09
20
08
20
07
20
06
20
05
0
•As incomes rise, diets are
expected to slowly diversify
towards foods that will favour
livestock and dairy products.
Source: SUINV based on Agricultural Outlook OECD/FAO
4
4
Agribusiness, the sector’s potential: A view from the resources
Leading global producer & exporter of food commodities and products
Argentine Share in Global Exports and Global Position
(share of the top 20 countries exports and position, 2008)
•Argentina founds its leading foodstuff
producer and export capacity on several
characteristics:
64.7%
Lemon Juice
44.9%
Soybean Oil
27.7%
Safflower Oil
vast expanse of fertile lands
24.0%
Sunflower Oil
exceptional agro-ecological conditions
22.9%
Grape Juice
19.4%
Pears
benchmark productivity levels
highly qualified human resources
Lemons and Limes
17.8%
Honey
17.3%
14.9%
Soybeans
well developed agro-industrial capabilities
7.0% 6th
Wheat
5.1% 6th
Powdered Whole Milk
Sunflower Seeds
1.6% 11th
Source: SUINV based on FAOSTAT
5
5
Agribusiness, the sector’s potential: A view from the resources
High agricultural efficiency and productivity
Maize Production Yield
(Tons/Hectare)
Soya Production Yield
(Tons/Hectare)
WORLD
WORLD
ARGENTINA
3,50
3,30
3,10
2,90
2,70
2,50
2,30
2,10
1,90
1,70
1,50
ARGENTINA
2010/2011
2009/2010
2008/2009
2007/2008
2006/2007
2005/2006
2004/2005
2003/2004
2002/2003
2001/2002
2000/2001
1999/2000
2010/2011
2009/2010
2008/2009
2007/2008
2006/2007
2005/2006
2004/2005
2003/2004
2002/2003
2001/2002
2000/2001
1999/2000
9,00
8,00
7,00
6,00
5,00
4,00
3,00
Source: FAS - USDA
6
6
Agribusiness, the sector’s potential: A view from the resources
Leading global producer & exporter of food commodities and products
•The poultry industry based its
development on four pillars:
Healthy feeding using only fresh
grains.
Tight health protocol that enabled
our country to be free of Newcastle
Disease and Aviar Influenza.
Genetic improvement that led to
meatier chickens.
Management techniques that
take into account the Animal
Welfare regulations.
Poultry and Egg’s Exports Destinations
•The goal for 2015 is to become the
second poultry exporter after Brazil
and the first egg provider for the
European market.
Source: SUINV based on ProArgex
7
Agribusiness, the sector’s potential: A view from the resources
Ability to meet the new standards: Organic and Quality Products
•Argentina is a major producer and exporter of organic food
in the Southern hemisphere, with more than 4 million
certified hectares.
•The products range from animal products like meats, milk
and cheese to flours, vegetables and wine.
•Argentina has adopted the same regulation implemented
the European Union (834/2007-9), its regulation has been
recognized by Japan and the certifiers have been approved
by the United States Department of Agriculture.
•The Agriculture, Cattle and Fishery Ministry has developed
the quality brand “Argentine Foodstuff, a Natural Choice”
that can be used by companies accomplishing certain
requirements.
Source: SUINV based on ProArgex
8
Agribusiness, the sector’s potential: A view from the resources
Booming exports & innovation
Rising Manufactured Exports of
Agricultural Origin
Fostering Innovation throughout the Value
Chain
(in billions of US$)
23.9
21.2
22.6
Creation of the Ministry of Science and
Technology and remarkable increase of S&T
and Education budget.
19.2
Innovation at every stage of the value chain:
seed production (genetic technology),
sowing (no-till farming) and gathering (silo
bag).
15.3
11.9
13.1
10.0
2003
2004
2005
2006
Source: SUINV based on INDEC
2007
2008
2009
2010
55 biotech firms are working to further
develop the country’s Food & Beverage
industry.
9
9
Agricultural Machinery: A View from the Demand
The opportunities for local production
Evolution of Sower Sales
(in units)
•The relevant role of agricultural
6000
National
Imported
production generates a high
5000
demand for agricultural machinery.
4000
• In sowers, local production can
supply almost the whole market
demand.
3000
•Local producers take advantage of
2000
their know-how on no-till farming
techniques implemented in
1000
Argentina.
0
2002
2003
2004
2005
2006
2007
2008
2009
Source: SUINV based on INDEC
10
2010
Agricultural Machinery: A View from the Demand
The opportunities for local production
Evolution of Harvester Sales
(In units)
•Harvester’s sales decreased in
2009, due to the global crisis
and a strong drought.
3000
National
Imported
2500
•In 2010 national sales of
harvesters have strongly
recovered.
2000
1500
1000
•There is an oportunity to
continue encouraging national
production.
500
0
2002
2003
2004
2005
2006
2007
2008
2009
Source: SUINV based on INDEC
11
2010
Agricultural Machinery: A View from the Demand
The opportunities for local production
Evolution of Tractor Sales
(In units)
7000
National
Imported
6000
• Currently, most of the demand
is met through imports.
5000
• However, local production has
increased its market share in the
last two years.
4000
3000
2000
• During 2010 there had been
important investment
announcements to increase
tractor production in Argentina.
1000
0
2002
2003
2004
2005
2006
2007
2008
2009
Source: SUINV based on INDEC
12
2010
Agricultural Machinery: A view from the resources
•Agricultural machinery is one of the most competitive complex
industries in Argentina:
Major cluster with more than 100 years of expertise, 40,000
employees (80% skilled labor) and 665 production facilities.
Know-how to produce innovative equipment for new agronomic
practices like no-till farming.
Excellent adaptation to local soil and climate.
Machinery with high technological capabilities, innovative solutions
and power to adapt to extreme conditions.
Internationally certified standards.
Excellent after-care services.
Growing production of high-tech precision instruments.
Internationalized Argentine companies producing abroad (i.e.
Metalfor, Agrometal, Pauny).
13
Agricultural Machinery: A view from the resources
•More than 70% of the local producers are located at the
agricultural machinery industrial cluster in “Las ParejasBelgrano”, placed in the core of the agricultural region.
•This cluster develops new machinery to fullfil the needs of
the Argentine producers, and new products such as the silobag.
• The Regional Technological Development and Research
Foundation (CIDETER) supports the productive cluster by
helping the firms to implement management and technology
innovations.
•One of CIDETER’s main programs trains producers on
internationalization and trade issues through the set up of
exports groups.
14
Agricultural Machinery: A view from the resources
Future scenarios
•The Ministry of Industry and the agricultural machinery private
sector are working on an Strategic Plan to foster the local
production.
•They expect that in 2020 domestic production of agricultural
machinery will reach US$ 2,500 million and will create 8,000
new jobs.
•Argentina is expected to produce 10,000 sowers, 4,000
tractors and 11,000 harvesters, when the 2010 figures were
3,800 sowers, 600 harvesters and 2,150 tractors produced.
15
Danke Schön!
To learn more about how investing in Argentina can
benefit you, please contact us:
www.inversiones.gov.ar
[email protected]
(5411) 4328-9510
16
Argentina:
Argentina: AA Strategic
Strategic Investment
Investment Destination
Destination to
to Meet
Meet the
the Demand
Demand of
of
Global
Global Markets
Markets
Provincial
Provincial investment
investment projects
projects
Undersecretariat of Investment Development
Ministry of Foreign Affairs, International Trade and Worship
June 2011
Investment opportunities in Argentina
Provincial projects
• During the Investment Mission to Germany, the
Undersecretariat for Investment Development is promoting
different investment projects sponsored by Argentine
provincial governments, displaying the diversity of business
opportunities existing in the country.
19
AGROINDUSTRIA
Energías
Renovables
Automotriz y
Autopartes
Province of Neuquén: Urea production plant (one millon tons
of production per year)
Investment opportunity: Construction of a nitrogen fertilizer
production plant (urea), associated with a Heavy Water Plant. The
excess of ammonia that is produced in the cycle of the heavy water
plant is the essential material to produce the fertilizers, taking
advantage of the existing infrastructure that helps to significantly reduce
investment costs of the project (about 35%).
Total Investment: US$ 25 millons.
Main advantages: Exceptional conditions for production and logistics,
benefits of the proximity to the Industrial Heavy Water Plant, and easy
access to ports facilitating exports.
Province of Corrientes: Multi-process wood production plant
Investment opportunity: Construction of a Wood Sawing plant
featuring State-of-the-Art Technology in production processes (100 m3
for each 8-hour work shift). Construction of a Wood Impregnation plant.
Construction of a plant for manufacturing Edge Laminated Softwood
Boards (1300 x 3000 mm). Construction of a plant for manufacturing
Multilayered beams (6 meters x 12 meters long).
Total Investment: US$ 1,5 millons
Main advantages: availability of raw materials; public incentives;
financial facilities;
Province of Corrientes: Medium Density Fibreboard (MDF)
production plant.
Investment opportunities: Construction of a MDF production plant with a
productive capacity of 50,000 m3 per year
Total investment: US$ 6.000.000
Main advantages: availability of raw materials; public incentives; financial
facilities;