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Special Report Misiones

Newsletter Fundación ExportAr

Fundación ExportAr

November 2011

Beekeeping Sector

www.exportar.org.ar

November 2011

Cases • AGLH S.A. (Las Quinas) • SOZ • Alimentos Naturales Natural Food S.A.

Desing in Fundación SIAL Middle East Andina Pack EDOS S.A. Adelmo Gabbi

Apimondia Santiago Olivera Patricio Mac Donagh Lía Fabiola Bianco María Martha Oria

Productora Sábado Training en La Rioja Export Group of Yerba Mate Agrifoods Exports


FOREWORD Public policies, outlined by the national government, implemented through agencies and institutions jointly with the performance of Argentine companies in international trade have achieved great results in 2011, all of which will make this year a great one for Argentine exports. • Argentine exports market diversification policy will reach its historic high by the end of the year while crossing the mark of 20 countries to which Argentina exports more than 1 billion dollars. • National industry initiatives for development together with the external promotion of products will see a new accomplishment this year: they will generate around 60 billion dollars in the export of manufactures. • Therefore, the new economic and productive process set forth since 2003, and external trade promotion policies will lead Argentine exports to reach a historic high in 2011, even surpassing the most optimistic forecasts at the beginning of the year, and reaching 85 billion dollars.

In this framework, Fundación ExportAr has been working jointly with Argentine companies in order to help them commercialize successfully their products worldwide. Throughout the year, under the strategic guidelines of the Argentine Ministry of Foreign Affairs, and working in a coordinated fashion with national ministries, promotion agencies, national, provincial, and municipal as well, chambers and related institutions, a number of actions have been carried out aimed at the insertion of Argentine companies into international markets, and training SMEs’ entrepreneurs by offering them the necessary tools and knowhow to either start or improve their exporting process.

Here follows some achievements accomplished in 2011:

• Through 37 courses and seminars held in 18 Argentine provinces, 1367 entrepreneurs have received training.

• 1418 representatives of Argentine companies have participated in 76 International Fairs around the world.

• 2339 SMEs have had business meetings with 252 foreign entrepreneurs throughout 26 International Business Rounds held in our country.

• 25 trade promotion actions have been carried out in which 223 export companies would offer their services.

• 67 export groups have consolidated with 465 companies.

• 1.402 trade inquiries from entrepreneurs have been managed.

A hard working year for Fundación ExportAr, a successful year for Argentine exports: 127 trade promotion actions, 3985 Argentine companies involved, 71% increase of the participation of companies in actions carried out, 400 million dollars projected in export businesses.

Juan Usandivaras News

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Newsletter of Fundación ExportAr

November 2011

CONTENTS 4

Exporting Argentine Identity

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SIAL Middle East 2011

STAFF Administrative Board - President Lic. Miguel Acevedo Administrative Board - Secretary of International Trade and Economic Relations Amb. Luis María Kreckler Undersecretary of International Trade Amb. Ariel Esteban Schale Executive Director Lic. Juan Usandivaras

12 The market 13 The sector

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Andina Pack 2011

Manager Cdor. Diego Nelli Coordinación de Redacción y Contenidos Santiago Mantelli Editorial and Contents Dr. Héctor Lorenzo Lic. Nilda Bordón Lic. Verónica Scornik Lic. Javier González Ojeda Rosario Menéndez

16 The market

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Interview | Hernán Gómez Sánchez, EDOS S.A

Colaboración especial Lic. Sebastián Fratto Bárbara Bonelli Josefina Gorriti

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Adelmo Gabbi: A predictable Argentina in an unpredictable world

Design DG. Pablo Caruso DG. Sebastián Feinsilber DG. Omar Baldo Julieta Pratesi

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Report Beekeeping Industry

tipography: Bree, © Type together

Ministerio de

Relaciones Exteriores, Comercio Internacional y Culto

21 Apimondia 2011 24 Analysis of beekeeping sector 29 Interview | Ricardo Parra, AGLH S.A. (Las Quinas) 34 Interview | Jaime Feeny, Alimentos Naturales Natural Foods S.A.

w w w . e x p o r t a r . o r g . a r Se autoriza la reproducción total o parcial de los artículos y de las fotografías

2citandoNews como fuente a News, el Newsletter de la Fundación ExportAr.

36 Interview | Hernán García Lahitou, SOZ


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Interview | Santiago Olivera

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Interview | Productora Sábado

Activities Fairs 82 24ª Performance Racing Industry Trade Show 2011 83 Fieracavalli 2011 83 16ª L´Artigiano In Fiera 2011 84 Kosherfest 2011

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La Rioja: Important support for internationalization of SMEs

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Argentine agrifoods exports

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Misiones Report

We would like to thank the disinterested collaboration of the Ministry of Agriculture, Livestock and Fisheries, SENASA, Tourism Secretariat, Las Eme SRL agency, and Bruno Iaconianni for the pictures that illustrate this number. News

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Exporting Argentine identity In January 2011, Fundación ExportAr launched an ambitious Design and Communications Program which is yielding excellent results, as acknowledged by different sectors in the public and private spheres. Boosting the strategic value of Argentinian design abroad.

The strategy Besides defining itself by its core mission of assisting the business community to place its products and services in foreign markets, Fundación ExportAr is also, in a much broader conceptual framework, an ambassador for Argentinian culture and identity. As an arm of the Ministry of Foreign Affairs, International Trade and Worship of the Argentine Republic, its profile is one of channeling assistance to small and medium-sized enterprises. However, in common with State policy, the strategy has other important features: a clearly federal character; its interdisciplinary technical teams made up of young professionals with a great sense of belonging, and by extension, its management which has a great capacity for action, dynamism, flexibility and innovation, without forgetting, of course, Fundación ExportAr’s widely recognized experience at both the national and international level. Creating Fundación ExportAr’s new institutional image involved several stages. The first consisted in redefining, broadening and clearly spelling out the organisation’s strategy. The operating plan included the following steps: • Auditing and diagnosis of the existing visual identity • Deciding on the necessary path of action: Redesign • Presentation of the design program (objectives and reach) • Design of the Visual Identity System • Implementation

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Auditing and Diagnosis As with any large-scale project, this began with an in-depth study of all the organization’s communications: an analysis was made of the brand, its publications, the web page, the international presentations of its stands and business rounds, the institutional stationery, the visual presentation of the ExportAr award, and even the best way of writing the name of the Foundation. The study ended with a diagnosis that would orientate the contents and the visual aspect of those communications. As a result of this analysis, positive aspects to be sustained, extended and emphasized were singled out, along with others to be considered.

Another problem to overcome was that although the brand name terminated in “Ar”, it did not contain the word “Argentina”, unlike similar bodies in other countries, so its origin was not simple to decode outside the country.

The brand name nominally had several very positive attributes: its double reading, its reference to the purposes of the organization and its origin, and also its international reading. Any intervention to be made needed to maintain and improve on these qualities.

Of great impact and recall due to its simplicity, the triangle was a very light yellow which made visualization difficult, despite its size in relation to the whole. It was a very positive formal attribute to sustain and improve. And the third element of the brand, the “blue band”, was the prominent feature, contrary to its contribution of meaning. It was a vital element that distanced the brand from Argentina’s national colors. As regards results, the graphic brand also had technical problems in small applications, making reading difficult.

However, in the written statements there was no unified criterion. The name appeared indiscriminately in capital letters, in both upper and lower case, or with or without a dot between its root (Export) and its termination (Ar). Besides, the texts that complemented its primary communications revealed the same problem. But perhaps the most important aspect to reconsider was the Foundation’s relationship with its parent organization, the Ministry of Foreign Affairs, International Trade and Worship, whose appearance was also intermittent, incoherent and haphazard.

Formally, the brand appeared to be fragmented, with a heterogeneous stylistic language. But the biggest problem was that the level of conceptual importance was not reflected in the hierarchy of its constituent elements (logotype, yellow triangle and blue stripe).

The diagnosis concluded that there was a need to redesign the brand and generate an identity system to reinforce the image of the Foundation and to live up to the prestige reached. Its identity system needed to be broadened and coordinated with the visual parameters of the country brand. In short, a program was required to help redesign all Fundación ExportAr’s communication pieces, on the basis of its new strategic positioning.

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Exporting Argentine Identity

The Design Program The design program was created in March and won the support of Fundación ExportAr’s board of directors. Besides those mentioned in the conclusions of the diagnosis, its aims were to provide a strong seamless institutional image that would add value and persist in the medium to long term. A proposal was made to broaden the contents, focusing on the participation of ExportAr as it accompanies the achievements of the Argentine exporters, improving its reach with translation into more languages, greater print runs of its publications, wider distribution to reach a greater readership, more naturally and in a less technical, encrypted form. The program also provided, of course, for coordinated and synergic work with the Argentina country brand. It included extending the redesign of the visual identity system to all the institutional applications: publications, digital supports, stands, building image, promotional campaigns, institutional stationery, etc. To implement the program an annual operations plan was drawn up and a professional interdisciplinary team was formed of graphic designers and architects. The program was also fed by the internal teams of each area, without whose contribution implementation would have been impossible.

Argentine pavillion covering 2638m2 for ExpoCruz 2011, Santa Cruz, Bolivia.

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Argentine stand for Asia Fruit Logistica 2011, Hong Kong

Redesigning the identity system At the end of March, the proposals for redesigning the institutional image were presented. The redesign of the brand reinforced its nominal value and its identification with the national symbols, besides improving its visual impact and strengthening the technical aspects. The system was completed not only with the normalization of color and other visual elements, but also with the incorporation of nationally designed typography to identify all the messages of the Foundation. The strategy was simple and clear: to capitalize on the design and national language to promote Argentine exports, to use own resources to express the projected communicational strategy, and to export design and add identity to all the organization’s products. A tagline or slogan was added to the brand, with the premise of incorporating the word Argentina to rectify the absence mentioned in the international context, with an idea that was embryonic in various messages and that was recovered as the focus of the graphic campaign:

Exporting more Argentina. So: Exporting more products from small and medium-sized enterprises in Argentina. Exporting more agrifoods, more agricultural machinery, more industry, more technology, more services, more education, more added value. Exporting more capacity, knowledge, culture, design and identity. Exporting more Argentina.

Argentine pavillion for ExpoPrado 2011 Montevideo, Uruguay. The stand won the “Best Stand 2011” prize awarded by the Fair.

With this strategy, a series of notes was created to cover ten categories. A search was also launched for nationally referential icons, such as successful cases or personalities, objects and even materials that transcended internationally and which could transfer their success to Fundación ExportAr’s new identity system. News

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Argentine stand for PMA 2011 Atlanta, USA.

Argentine stand for the 2011 Frankfurt International Book Fair, Germany.

Argentine stand for China Educational 2011 Beijing, China.

Argentine stand for the 2011 Guadalajara International Book Fair, Mexico.

Implementation This stage began with the complete redesign of the ExportAr report. The publication changed its name, included a wider range of contents and changed its style of communication with a more accessible, modern vision, in keeping with the new communication policy. The redesign reinforced these decisions to culminate in an excellent result that was reflected in the satisfaction expressed by the recipients of the new product. At the same time, the web page was also redesigned. In contrast with the ExportAr Report (now News), it had a very good level of contents, but these needed to be arranged in order of importance. It required improved Internet access, but also needed to be redesigned in terms of its specific use and the new identity system applied. Work on the image of the international stands was very gradual, given its great complexity. The implementation of the new institutional image acquires greatest importance in this sector thanks to its international exposure in synergy with the Argentina country brand and with other national bodies. So, in the first months of the year, work was coordinated with those responsible for communicating the Argentina country brand and the project was harmonised with the norms and uses of the existing brand application. In short, the perception of Argentina abroad should be unique but consistent. In this process the valuable accumulated experience of the technical experts who coordinate and enable the presence of the Argentine

exhibitors at international fairs was brought in. The end goal is to design the ExportAr stands in-house, putting only their construction out to tender. To do so, the methodology applied began with a briefing meeting with all those responsible. Examples of past experience were brought together, the needs of the exhibitors and the meters available spelled out, and emphasis was placed on the communication in accordance with the specific supply. Then a (spatial and communicational) preliminary plan was prepared in response to the aims contained in the general program and once agreed upon internally, bids were invited for construction. This form of work assures consistency, a process of constant feedback and an optimization of tangible and intangible resources in the medium and long term. An in-house image bank has also been created, which besides supplying the publications and the web site, allows the use of large photographs on the stands, noticeably improving perception. To do so, material has been exchanged with other national bodies and programs such as the Ministry of Agriculture, PROSAP, PROARGEX, INTA, INVAP, Canal Encuentro, University of Buenos Aires and INPROTUR. The intention is to employ all available public resources to feed and improve the quality of all Fundación ExportAr communications. Fundación ExportAr’s Identity Redesign Program has had very favorable tangible short-term results. The changes made in all its communications have considerably improved the perception of

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Plan of the Argentine stand at the 2011 Canton Fair, Guangzhou, China.

The NEWS covers reflect success stories for SMEs that achieve their commercial goals abroad thanks to the assistance of ExportAr.

it and have been very well received in different spheres, both at home and abroad. Argentina’s stand at the recent ExpoPrado Fair in Uruguay, to mention just one example, was singled out as the best at the event. Both in this case and in Expocruz, Bolivia, work was done not only on the preliminary project, but also on the work of the constructor. The change of image also generated a favorable internal movement: all the teams provide their experience and feed it. They are actors who generate a virtuous circle. The work was intense, rapid and very rewarding, especially due to the invaluable contribution of each of those responsible for all the internal areas, confirming once more that strategic design is a fundamental tool for adding value, not only in ExportAr’s communications but also, and by extension, to the Argentinian exporter, our most important market. The aim is to close the first stage of implementation at the end of the year, and then extend its goals for 2012. There is still a lot to be done on the whole project and in each of the communicational aspects, but we believe that we’ve taken a very important first step in contributing to the broader purpose:

Exporting more identity Exporting more Argentina

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SIAL Middle East 2011 Argentina present at Middle East’s food and beverages fair in the richest city of the world.

Abu Dhabi, Middle East November 21 - 23 Food and beverages

SIAL, a truly international trademark of worldwide renowned in the food industry, comes back to Middle East in 2011 with an exclusive platform for doing business and trade meetings in this prosperous area. SIAL hosts exhibitors from around the world and buyers coming from Middle East, Africa, and the Indian subcontinent. Abu Dhabi, in the center of the region, is considered the richest city in the world, and it will hold one more time the 2nd edition of SIAL. This is not only an important food demanding market but also is becoming a growing tourist destination. In this area, there are more than 2 million consumers, where the Middle East has a retail market of around 35 million dollars, ranking 4th in the global retail index. Abu Dhabi holds around 7% of proven oil reserves in the world. SIAL group has decided to disembark in this region due to the growth achieved in the last years. According to organizers, this edition of the Fair promises to increase the number of visitors and exhibitors than in the previous edition. Edition 2010 hosted around eight thousand professionals of the industry from 77 countries, giving it an international profile. It is worth mentioning the professional profile of attendants to this event than in other food fairs; the organizers put special focus on the attendance of entrepreneurs and visitors from the sector. Likewise, authorities design a special program to detect importers through which the most important buyers of the gulf region and its surroundings are invited. This program assures that contacts made are really important and help companies access such an outstanding market as the Middle East one.

There stand out among visitors: agents, airlines, armed forces, bakeries, defense, coffee, clubs and bars, catering companies, duty free, manufacturers, producers and retail companies, groceries stores, hotels, hospitals, traders and importers, political authorities, 10

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restaurants, distributors, tourist centers, supermarkets, hypermarkets, and wholesalers. Some other indicators that motivate participation in this important event are: nowadays, the Middle East is the region with outmost growth at world level. Tourism has risen at considerably higher rates than those in any other region. Accommodation capacity has doubled as compared to last year. The food service market in the Middle East is valued at 35 million dollars. Abu Dhabi is the most developed Emirate and the richest city of the world, with a 10% growth in 2008. Re-exports to other Middle East markets grew 11% that same year. Sectors and products exhibited at the Fair represent two conventional sections of food: ingredients and food, and beverages. Thus, there will be stands with conventional cooking ingredients such as salt or sugar, together with other innovating products of the new cuisine. Products showcased fall under the following categories: bakery, beverages –nonalcoholic-, confectionery, cured meat, dairy products and eggs, delicatessen, frozen products, fruits and vegetables, gourmet products, pastry and sweets, dietary supplements, meat, halal products, organic and poultry products, shellfish, semi processed products, ingredients and manufactured solutions.

Argentine participation In Argentina, the foreign trade of this sector has experienced a great positive dynamism throughout the first quarter of 2011. In a context of high international prices, a sustained foreign demand and advancement in product positioning in nontraditional markets have furthered national exports. They reached 40,022 billion dollars during the first half of the year, increasing 24.6 % with respect to the same period in 2010.


Particularly, Food and Beverages (F and B) exports have reached a total FOB 12,817 billion dollars, with an annual increase rate of 37.4%. The principal impetus is given by the evolution in export prices, which increased at an annual rate of 20.5% whereas volumes sold registered a 10.5% annual rise. From the analysis by regional destination or economic group, it can be observed that food and beverages sales to the European Union represented 25% of the total volume exported throughout the first quarter of 2011, followed by sales to ALADI (11.5%), ASEAN (10.4%), Middle East (8.7%), and MERCOSUR (8%)1. In 2010, Argentine food exports to Middle East reached volumes of 1,771 billion dollars, experiencing a 32.4% inter-annual increase, and outstanding 230% five-year growth. It is worth to mention that food represented 62.6% of total sales.

sales for 8, 5 million dollars; “chocolate and cocoa preparations” with 7,4 million dollars; “unfermented lemon juice” with 7,3 million dollars; “cereal, starch or milk based preparations for children feeding” with movement for 5,4 million dollars2. These are the reasons why the Argentine Chancellery, through Fundación ExportAr jointly with PROARGEX (Promotion Project for Argentine Agrifoods Exports) of the Ministry of Agriculture, Livestock, and Fisheries, will coordinate the Argentine Pavilion over a surface of 90 m2 at this event, where the most important showcase of food, beverages and equipment of this region takes place, and it will host around 500 exhibitors with pavilions from countries such as China, France, Iran, Pakistan, Poland, South Korea, Taiwan, Thailand, Tunisia, Turkey, Vietnam, United Arab Emirates, the United Kingdom, and the US.

Principal exported items in 2010 were: cereals (mainly maize) registering 667 million dollars and a 38.4% inter-annual increase; fats and oils, with sales for 605 million dollars and 127.8% increase with respect to 2009; oil seeds and oleaginous fruit (183 million dollars, 26.3%); and meat (166 million dollars, +1.5%). Together, these four items represented 91.6% of food sales to Middle East in 2010. Among the principal food exports destinations to Middle East in 2010, there were: Iran (956 million dollars), Israel (209 million dollars), Arab Emirates (201 million dollars), and Saudi Arabia (139 million dollars). Overall, these destinations concentrate 85% of shipments. Taking into account only food preparations, principal exported products to Middle East in 2010 were: “prepared peanuts” with

1 Argentine Food – Ministry of Agriculture of the Nation 2 Commercial Intelligence - Fundación ExportAr

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The market United Arab Emirates comprises seven states located in the Arabian Peninsula, over the Persian Gulf, which are: Abu Dhabi, Dubai, Sharjah, Ajman, Umm, al Quwain, Ra’s Al Khaimah, Fujairah. The Arab Emirates is a prosperous country made up by 81% of immigrant population, and with their own parameters similar to those of emerging countries with a life expectancy rate of 78,2 and a per capita GDP of 44,100 dollars. Extractive Industries have a relevant role in the economy and services as well, since the Emirates are the financial center of the region, and also of tourism which represented 18% of the GDP in 2010. Nevertheless, in the last years, economic policies have furthered a greater industrial diversification, but dependent on the production of hydrocarbons such as petrochemicals, steel and aluminum industries. Likewise, construction has also gained a relevant role. Agriculture has a marginal role within the economy with 3.2% of arable lands, annual rains of 33 mm, and temperatures which during the summer the average range is between 26° and 45°, all of which represents 0.9% of GDP, becoming a net foods importer state. In this regard, foods purchase gains a privileged spot in the trade balance, closer to 40% of total imports, together with capital goods. The Argentine Republic is the second Latin American supplier country behind Brazil and surpassing Mexico.

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SIAL Middle East 2011

The sector In the last years, foods exports have increased not only in value but also in volumes. In this sense, in 2010 they represented 34,000 billion dollars, thus becoming one of the main world food exporters. Food sales have reached an outstanding dynamism, which shows Argentina is ready to supply the increasing world population food demand since it has the capacity to feed ten times its national population1. In 2010, exports to Middle East represented 4% of total sales performed by our country, when they reached shipments for 2,868 billion dollars. That meant 14% increase with respect to 2009 when exports represented 2,517 billion dollars. Out of the total exported to the Middle East, 92% were foods (2,632 billion dollars). Among them, Manufactures of Agricultural Origin outstand with 35% between 2009 and 2010, with sales for 1,732 billion dollars. As regards exports to Arab Emirates, in 2010, they became the third destination of Argentine sales in the region, with shipments for 271 million dollars. Among the exported products we can mention: fats and oils (124 million dollars), cereals (44 million), preparations for animals (27 million), oleaginous seeds and fruits (11.4 million), items that concentrate 80% of total sales.

1 CEI, “Las exportaciones de alimentos se diversifican y ganan nuevos mercados”, Número 1, diciembre de 2010, en www.cei.gov.ar

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Andina Pack 2011 Sustained proposals in materials and designed outstand at the Packaging Industry Fair

Bogotá, Colombia November 8 -11 Packaging

LThe evolution of the industry can be seen in the progress experienced by Andina-Pack, which every two years gathers the main technology supply companies, trademark owners, and packaging and packing experts from all around the world. In Argentina, this industry has 1, 5 share in the GDP. Per capita annual consumption of packaging is 100 kg. This sector is present in every aspect of daily life. In whole, the national output reaches, combining different materials, 4 billion tonnes. Today, packaging is a key element in the commercialization chain to the consumer, there is no product conceived without it, for many reasons: mainly the commercialization through supermarkets, conservation and useful life span of the product, time lasting at the shelf, protection by precincts and different systems that allow the product to reach consumers in good and healthy conditions. In addition, communication and perception variables are strongly carved in the packaging of a product. Packaging is present everywhere, from products that go directly to the refrigerator, to autoparts and medicines, among many other ones.1 Jorge Acevedo, General Manager of the Argentine Institute of Packaging, states that the debate around the sector is to make sustainable ecofriendly packaging. Currently, he says: “most of them are recyclable, but this does not mean they are actually being recycled, these are two different things. For instance, PET system is completely solved in one sense; packages undergo a grinding process and can be completely reduced”. Within the sector there is a strong competition for raw materials used in the creation of new packaging, especially between paper and plastic; but in the last years many more paper and card14

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board packaging are being sold. Among them, one of the most important ones is corrugated cardboard, invented in the US in the 1960s which gradually started to be incorporated into the market, growing as years went by. 2 With the purpose of supporting the packaging sector, and thus contribute in the development of the local image, through their expressiveness, and as a factor for adding value to products and market insertion, Fundación ExportAr jointly with PROARGEX, and the Program for Provincial Agricultural Services (PROSAP, in Spanish), along with companies from this sector, have attended Andina-Pack. The Fair celebrated its 20th anniversary at the new premises of Corferia, where a wide offer of state-of-the-art packaging technology, proposals in sustainable materials and design, distribution logistics and robotics have been showcased. The 11th edition of Andina-Pack became the entrance for clean technologies of the packaging industry in the Andean Region, Central America and the Caribbean with impact on changes and innovations in the sector, and it was focused on the reduction of use and costs of energy, consumption and responsible management of resources, sustainability in production and use of packaging, re-design of packaging according to the speed of changes in consumption habits and decisions in the society. The region is rapidly moving towards a pro-environment awareness, and industries are transforming to satisfy a more rigorous demand in terms of environment and efficiency; laws currently in force in Central and South America furthers innovation and industrial reconversion.


Andina Pack 2011

Within the framework of the exhibition, there were held many conferences such as: “Scenarios of world Competitiveness in the Food and Packaging Industries”, “Trade, Consumers, and Business Opportunities –Changes and Trends in the retail market”, “Neuropackaging- The key is in the Brain”, which show trends and innovation in the sector market. The event hosted 700 exhibitors who showcased new solutions and packaging technologies, materials, and printing and converting processes, spread over a surface of 17,000 m2. Products and sections showcased at the fair were: Packaging & Converting – packaging printing and converting equipment, injection machines, extruder machines, molding and coding and market technologies. Drink-Pack – solutions and new technologies for the beverages market, showcase of robotics and automation systems. Andina-Pack – innovative and eye-catching trends for both rigid and flexible packaging. Eco-Pack – trends to further sustainable technology practices and ecofriendly products. Food technology – food producers showcased solutions for improving competitiveness of their processes and innovation in their packaging. Pharma-Tech – measurement and control instruments, coating systems, packing machines, and other specific instruments for pharmaceuticals and cosmetics.

Argentine Participation As previously mentioned, Fundación ExportAr jointly with PROARGEX (Promotion Project for Argentine Agrifoods Exports), the Ministry of Agriculture, Livestock and Fisheries, and the Program for Provincial Agricultural Services (PROSAP, in Spanish) coordinated the National Pavilion on a surface of 54 m2, where seven argentine companies have showcased their exportable offer.

Participating companies at the Argentine Pavilion informed that during the fair they have made 309 contacts that create business expectations for U$S 1,900,000 for the next year, and likewise, two companies expressed they have done sales during the event. Companies stated they were satisfied for having participated in this fair and hold expectations to do operations in the short and medium term. Likewise, exhibitors have highlighted the great design and excellent location of the National Pavilion. Among them, the representative of Barbarella, a company devoted to the manufacture of packaging machines, said that during the event they have been able to do sales, and that their participation was aimed at creating and strengthening trade links as well as getting to know the characteristics of the Colombian market and their competitors in the region. Incalfer: since 1970 the company is devoted to the development, manufacture and commercialization of industrial machines for processing and adding value to natural foods. It delivers continuous lines for the elaboration of a wide range of snacks, vegetables processing, breading lines, and chocolate making. Their participation in this event enabled them to make sales, and seek to position their company in the Colombian market. Edos S.A.: a company with 40 years of experience manufacturing packaging systems using heat shrinks materials. At this event, they made a great impression because they showcased a packaging machine for pharmaceutical products. Their strategy was aimed at

1 Instituto Argentino del Envase 2 E. Schcolnik

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Andina Pack 2011 positioning and promoting their products, and creating new commercial links. Codymarc S.A.: company devoted to product coding; they introduced coding machines attracting a great number of visitors to the stand. Their representative informed that participating in this event was really good to learn about the Colombian market and generate new commercial links. Baguin: company that exclusively manufactures Bag in Box packaging from 2 to 1,250 liters and related services. They have an innovating product in the packaging industry and also attracted a great number of visitors. They held meetings with Nestle Colombia, and wish to develop new commercial links because of their participation in this fair.

offer and generate commercial links. It is worth mentioning that the Consul of the Argentine Embassy in Colombia visited the fair and introduced himself to each one of the entrepreneurs. The International Fair of Packaging, the most important meeting of the sector in Colombia, has closed its doors with businesses for more than 150 million dollars, and projections for more than 170 million dollars. “We have met all expectations we have had in every aspect, the number of exhibitors and visitors, the number of business done, and overall the organization of the event�, said Patricia Acosta of Andina Pack.

Maquilar: with more than 15 years of experience in the sector, they manufacture dough processing machines for products such as empanadas pastry discs, breaded soy, among others. This company belongs to GEMEIA Group, and its offer awakened a strong interest among visitors. Carlini: devoted to the development and manufacture of automatic and semiautomatic packaging machines for more than 60 years. As the previous company, it also belongs to GEMEIA Group, and this first participation gave them the opportunity to showcase their

The market The Republic of Colombia has a surface of 1,141.748 km2, and 46 million inhabitants, it is the 4th larger country in the region. It shares borders with Brazil, Ecuador, Panama, Peru and Venezuela. Its main cities are: BogotĂĄ (8.2 million inhabitants); Medellin (3.5 million); Cali (2.3 million); Barranquilla (1.8 million), and Bucaramanga (1.1 million inhabitants). Colombia is one of the most developed economies in the region with a participation of services of 53%, followed by the industry with 37% of the GDP, and the agriculture which accounts for 9 %. Nevertheless, it is well known by its agriculture, especially for its coffee production. In 2010, Colombian exports reached 40,780 billion dollars, where petroleum and coffee production had a significant relevance, although mining related products and flowers shipments also outstand. Its main trade partners are the United States, where 42% of its shipments are sent, followed by the European Union (13%), China (5%), and Ecuador (4,5%). As regards imports in 2010, they surpassed 38,640 billion dollars, emerging as main trade partners: United States (25.5%); China (13.4%); Mexico (9.4%); and Brazil with a share around 6%. In terms of bilateral trade between Argentina and Colombia, sales to said market in 2010 reached 1,298 billion dollars. Among the main products exported to the Colombian market we can find: cereals with shipments for 466 million dollars and 36% share of total exports; followed by foods and preparations for animals (252 million, 19%); fats and oils (101 million, 7.8%); electric machines and devices (78 million, 6%).

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Interview | Hernán Gómez Sánchez, EDOS S.A.

“It was a success because we were able to show what we expected” Hernán Gómez Sánchez, from EDOS S.A, highlighted the opportunity they had to exhibit equipment especially designed for laboratories. The Fair sections division resulted vital to achieve this.

One of the companies that participated in Andina Pack with singular success was EDOS S.A, which is already exporting to all Latin America, United States and Spain and intends to conquer new markets. Hernan Gómez Sánchez, who was the company representative in the Fair, gave us an interview and pointed out:

types of packaging and products. Applying new technologies and specialized engineering to provide efficient solutions to their customers’ needs, EDOS S.A. currently has a wide range of equipment and the necessary experience to carry out the most diverse projects”, he assured.

“The twentieth edition of the Andina Pack exhibition resulted very auspicious for our company, since the objective was focused on the presentation of equipment specially designed for the sector of “laboratories” and in this opportunity there fair was divided in sections, which allowed us to concrete our desire”.

We wanted to know what the biggest achievements of the company were, to which Gómez Sánchez replied: “Among our biggest achievements we can point out the constant development that we do together with our customers, which allows us to learn and improve the technological offer and enter new markets”.

Later on, the businessman added: “The coordination of Fundación ExportAr was very important for Argentine businessmen to obtain certain synergy and exhibit national technology at such important Fair of the region”.

Regarding the future he said the following: “Our projects are currently focused on increasing the participation in foreign markets, oriented to specific segments that would allow us the incorporation of equipment specially developed for the sector such as laboratories in general, dry pastas, medium and high production bottlers”.

Regarding the history of the company, he said: “Our company is over 40 years old in the Argentine market and has been exporting to all Latin America, United States and Spain for over 20 years. Since the beginning, EDOS S.A. dedicated all its efforts towards the implementation of the packing system with thermo shrinkable plastic materials in our market. Therefore, Argentina is currently one of the leading markets and with greatest development in the use of this packing system.”

Expectations in the short and medium term are focused on increasing our participation in exhibitions and fairs in order to meet the goals settled”.

“With the passing of time and the development of countless potential applications, EDOS S.A specialized in the treatment of all News

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Opinion | Adelmo Gabbi, Chairman of the Buenos Aires Stock Exchange

A predictable Argentina in an unpredictable world Adelmo Gabbi, Chairman of the Buenos Aires Stock Exchange, said he is confident in the performance of the national economy: “That is so because I love my country, because I represent one of the most prestigious and historic institutions of the region, because I am a chronic optimistic, but today I feel more comfortable investing in Argentina than in any other country�.

First of all, we have to understand that the world crisis of 2008 (one of the deepest in history) instead of having been solved has been postponed with a gross debt and money issuance by almost every of the strongest countries in the world, being the United States the most aggressive one with this policy. All this have caused a strong devaluation of their currency. In contrast, commodities have been appraised providing robustness to their producers, that is emerging countries, among them Brazil, Russia and Argentina. While the dollar ceased to be a rentable currency, investors turned to seek other incomes, such as gold, the Swiss franc, the real, or raw materials funds. It is important to understand that the United States by devaluating its currency has transferred its prices bubble to the rest of the world. Today, the country chaired by Obama is cheaper and more competitive than most countries in Europe. This has caused an important divorce between government accounts with an increasing deficit (spending excess and debt rise), and the micro economy of companies with more solid and sound balance sheets, since they have been able to benefit from consumption increase fostered by monetary policies. In a context of high unemployment rates, this debate generates great social 18

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disappointment in the United States. By understanding this, we can advance to the second point to take into consideration. Political behavior has caused a huge lack of credibility over institutions. We are talking at international level, and not about Argentina. We started the year with social crisis in the Middle East and Africa, with the downfall of historic regimes, the downfall of Portugal’s government, and the anticipation of elections in Greece or Spain. And we have to add Italy and Belgium. The debt debate in the congress of the United States deepens uncertainty. But also confidence in finance institutions has fallen, starting with banks, followed by ratings agencies, regulators, fund managers, since all of them have shown a low power of anticipation. It seems all of them go after drips setting buckets to contain them but nobody has succeeded in tackling any of the drips. In my opinion, I have a feeling that markets today do not discuss over the grade of a rating agency, nor government accounts deficit, but the capacity or political power of countries to solve


them. For this reason, in spite of rating agencies low grades for the United States, its bonds keep rising at historic prices. In Argentina, the elections outcome and the Cabinet confirmation in such an unpredictable international scenario, brings certainty. It is good to know which are and which will be the rules of the game. You may like them or not but it is a great advantage, unlike other countries, said rules be known. There are reasons to be optimistic. This time the market is as liquid as ever. Companies are solid and have lots of cash, and individuals are not as much indebted. This time the problem is not systemic; there is not a surprise factor. I say it again, there is exaggerated panic. The very same price decrease will bring buying opportunities to relieve said panic. Therefore, I believe in stocks savings, which is saving in shares of companies that generate resources, currencies, work, and investment. As I mentioned before, I feel more comfortable investing in my country.

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Report beekeeping industry

Honey: Quality that sweetens the world With an annual production that averages 75,000 tons, our country has become the third world producer of honey. Although local consumption is still low, the industry employs around 60,000 people permanently and has experimented significant growth since the mid 90’s, as a consequence of the important increase in the international demand. Nowadays, Argentine quality and variety are recognized worldwide. Here we include a complete report on the exporting performance of the sector; in addition to details of the International Business Rounds that took place in the framework of the Apimondia Fair; and lastly, three companies that work with different degrees of honey processing. On the one hand, we describe growth reached at local and international levels by Las Quinas (AGLH S.A.) and Aleluya, companies that produce and export this product. On the other hand, we enter the market of gourmet seasonings to savor the mustard with honey produced by SOZ. Three companies that make a big impact. Three examples of effort, work and consistent expansion.

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Report beekeeping industry

First International Business Round Apimondia 2011 Foreign guests and Argentine producers gathered to establish business bonds in Argentina: the first honey exporter of quality.

La Rural, Fair Premises Buenos Aires September 22 – 24 Beekeeping The 1st International Business Round of the Honey-making industry took place in the framework of Apimondia Fair 2011, organized by Fundación ExportAr together with PROARGEX of the National Ministry of Agriculture, Livestock and Fisheries. After 38 years and as of a decade of expansion in all its production chain, the Argentine beekeeping industry hosted the most important event in the world. During the last decade, our country ranked among the five principal honey producers of the world, at the same time being the first bulk exporter of honey. Despite having gone through difficult years, Argentina has managed to generate a distinguished beekeeping industry at international level. Many beekeepers from different parts of the world that visited our country on the occasion of the Fair held in Buenos Aires in 1973, have found that the impression they had back then differs in a positive way to the one showed today through our researchers, technicians and beekeepers around the world. The 42nd International Congress of Beekeeping Apimondia 2011 found our sector with a lot of things to show: its development, the great scientific and technical capacity, its practices and strengths, but also its great ability to exchange experiences and knowledge with all the colleagues from the entire world.

For some time, beekeeping has become an activity of great relevance for Argentina’s Regional Economies. Said activity has over 28,000 producers, 4.5 million beehives and a distribution that encompasses almost the whole country. Besides, this profession reaches 120,000 direct job positions, taking into account all the links of the productive chain. Being its more significant detail the relation of 160 beehives per beekeeper, compared to the US (96), Spain (99), China (26,6) and France (19,5 beehives per beekeeper) just to mention some countries. Likewise, this sector has experienced significant expansion due to many factors: an increase in the international price of honey; inclusion of new regions to honey-making industry practices; rendering services for agriculture (pollination of crops with business interest) and greater demand of Argentine honey overseas. This last item is worth highlighting, taking into account that Argentina is the first exporter of quality honey. Other beekeeping products we can identify as in expansion regarding production are: pollen and propolis. In our country, there are some areas well-identified for pollen production (NOACuyo) or propolis production (Delta- NEA). These are products of high added value that are used in different industries (food, pharmaceutical and cosmetics).

Thanks to the weather diversity, our country has great variety of floral resources that allow activities related to agriculture be developed in almost every area of our territory. News

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Apimondia 2011

National Participating Companies:

Cortes, Carlos A. y Francisco Abel Criadero Chillar S.A. Distribuidora Apícola Vairolatti S.A. Agropecuaria Don Ricardo S.R.L. El Aguaribay S.A. Almapura Us Llc. Estancia La Elisa S.A. Apidan S.A. FP Ingeniería S.R.L. Apilab S.R.L. Grupo de Productores Exportador Apipuzzle S.A. Apícola Correntino Ceras Argentinas S.R.L. Inder´Co S.A. Colmenares Hara S.A. Industrial Haedo S.A.I.C. y F. Coop. Apícola Los Charrúas Ltda La Partida S.A. Coop. de Prod. Apícolas Copap Ltda Cooperativa Apícola Gualeguaychú Ltda Laboratorio Baldan S.R.L.

Argentine honey is strongly recognized internationally for the following characteristics: quality standards, traceability system, and excellent genetics of living material, inert standardized material and production technology, all of which outstand compared to those of other competing countries. After eleven years of work and a candidacy that had great international support, in the celebration of Apimondia 2005 in Melbourne, Australia, Buenos Aires became the host for the 42nd International Beekeeping Congress this year. In this context, foreign companies were invited to participate in a very selective way; we aimed at markets with great potential, importers not only of fractioned and bulk honey, but also intakes such as clothing, tools, vet products, beeswax, pollen, propolis, machinery for the extraction of honey and bottles, among other products. Companies from France, Spain and Brazil were invited. The event had the participation of 32 national companies. The selection was done according to the level of professionalism, 22

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Labrador del Este S.A. Lichytex S.A. Luis Alberto Clara Miel Ceta S.R.L. Monte Nativo S.R.L. Naiman S.A. Organización Internacional Agropecuaria Osbo S.A. Rimondino, Enrique Servicios Empresarios Serpae S.A.

exporting capacity and potential. The round took place in a space specifically prepared and lasted 3 days where 130 meetings were coordinated. From the commercial perspective, most buyers highlighted that they went back to their countries with very interesting contacts. In some cases foreigners took samples of products of their interest and quotations. The price-quality ratio of Argentine products was highlighted by buyers who were pleasantly surprised by the packaging and labeling. Likewise, they remarked the great diversity and availability of the exportable offer.


Report beekeeping industry

Participating Foreign Companies Profiles : 1. La Ruche Roannaise – Besacier S.A. (France)

4. Miel Moncabrer S.L. (Spain)

Since 1905, the company has had two plants, one of them is in charge of buying and packing honey imported from the whole world. They also commercialize royal jelly, pollen and produce honey. The other one commercializes equipment for beekeepers, such as clothing and machinery for honey extraction.

It is a family business that for more than 30 years has based its work on the commercialization and development of high quality beekeeping products: honey, pollen and royal jelly. It has a packaging plant in the province of Alicante, it allows packaging in different formats and sizes under the brand Moncabrer y Delimiel, but also white label.

2. Cagec La Compagnie Apicole (France)

5. FAI – Federazione Apicoltori (Italy)

It started in 1964 and since 1988 it is part of a cooperative of beekeeping companies. They manufacture honey candies and they are the third biggest French company of the sector.

3. Lambertucci Industria e Comercio Ltda. (Brazil) Started in 1993, its activity includes: food industry, honey, propolis, pollen and candies. In 2002 the company became international and began its exports to European, American and Eastern markets. In 2006, it adapted its business strategy with the expansion of its sales towards the internal market, opening new industrial lines, implementing quality systems such as BPF, HACCP, RECALL. At the same time it implemented an environmental and social policy. Its sales channel is the industry of foods, cosmetics and medicine (pharmacies, supermarkets, drugstores), supplying products to these channels through representatives and distributors.

The Italian Federation of Beekeepers was created in 1953; it is the body with highest authority in the sector. Within its structure, the FAI includes Associations of beekeeping products, free associations, beekeepers, businessmen and professionals and has a strong presence in the entire national territory.

6. Jakson P. Da Silva (Brazil) Company dedicated to the commercialization of honey and bee products, as well as products composed of medicinal herbs. It has a plant for imports and exports certified by the Ministry of Agriculture. It specializes in the manufacturing of medicine and cosmetics. Its main clients are: Wal-Mart, Grupo Pao de Açúcar, G-Barbosa, among others. National and foreign companies had a total of 130 business contacts, from which they received quotation requests and future demands of different exportable products of the sector.

National and foreign companies had a total of 130 business contacts, from which they received quotation requests and future demands of different exportable products of the sector. News

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Analysis of the Beekeeping Sector Pursuant to the Resolution 15/94 of MERCOSUR, honey is defined as the food product generated by honeybees from the flower nectar or from secretions coming from living parts of the plants, or from extractions of plant-sucking insects that sit on them and that bees gather, transform, combine with their own specific substances and save to then let mature in the beehive honeycombs (sect. 2.1). Likewise, they then specify that honey is a concentrated solution of sugars with glucose and fructose predominance. It also contains a complex combination of other carbohydrates, enzymes, amino acids, organic acids, minerals, aromatic substances, pigments, beeswax and pollen grains (sect. 4.1). Beyond technical descriptions, the analysis of this activity shows that our country has experienced, for some years, great expansion in beekeeping thanks to many factors. Among them we can mention: reduction of production due to sanitary matters in many countries, different weather phenomena and the Africanization of bees in traditional producing areas (like the case of Mexico). In that way, and also thanks to the increase in the international price of honey during the 90’s, followed by the devaluation towards the end of 2001, at the beginning of 2002 there was great development of the sector in Argentina, which led to a significant increase of national exports of this type of products. Regarding local consumption of natural honey, it is necessary to point out the fact that it is still very low compared to that of other countries: around 180-200 grams are consumed per inhabitant per year in our country, while in countries such as Japan, United States or Germany, the consumption is about, and in some cases over, 1 kg per capita. In this regard, it is necessary to mention that the Argentine market is underdeveloped compared to internal markets of other countries mostly due to the limited habit of consuming honey and other bee products. However, it is possible to appreciate a change in food consumption habits for healthier ones, in order to obtain a better life quality and health; therefore we can expect a higher local demand of these products in the medium term. Regarding world consumption, on the other hand, it is worth pointing out that there is a growing trend. We see it in a greater demand in some traditional markets, together with the dynamism of certain markets in the Middle East and North of Africa. According to data from the National Records of Beekeeping Producers, the activity is currently in the hands of more than 30,000 beekeepers that have around 3,9 million beehives, although it is considered that there might be over 5 million in production process. In this situation, it is worth pointing out that national production is found in an average performance around 30 to 35 kg annual per beehive, however there are some producing areas in which important harvests are registered with an average between 60 to 70 kg annual per beehive, together with experiences registered among the biggest world producers. Analyzing the areas in which honey is produced within the Argentine territory, we can assure that the province of Buenos Aires concentrates over 40% of the national producers (table 1). It is important to mention that, despite the great incidence that this district has in the total Argentine 24

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Report beekeeping industry

production, beekeeping has expanded significantly in the rest of the provinces, having production poles in Santiago del Estero, Misiones, Tucuman, Neuquen and Chubut, just to mention some provinces. Due to this distribution of beekeeping productions and climatic differences in the national territory, together with varied possible botanic origins, the final result is obtaining different types of honey with very high quality standards, which makes this product highly valued worldwide due to the organoleptic and physicochemical characteristics, and it is demanded both for direct consumption as well as for its processing in the most demanding markets.

Argentina: Distribution of honey production according to provinces, year 2010 Province

Number of beehives

Number of producers

Beehives/Producers

Buenos Aires

1.652.400

10.200

162

Entre Ríos

690.930

4.265

162

Santa Fe

433.160

4.165

104

Córdoba

396.998

4.104

96

La Pampa

279.932

1.505

186

Other

537.935

8.862

60

3.991.355

33.101

120

Total

Source: SAGPyA – National Department of Agrifoods

Graphic No 1. Argentina: Distribution of honey production according to provinces. Year 2010 Rest

14%

La Pampa 7%

Buenos Aires 41%

Córdoba 10%

Santa Fe 11% Entre Ríos 17% Source: National Department of Agro industry

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By analyzing the current geographic distribution of the national agricultural production, we can understand the impact that the expansion of beekeeping production would have towards marginal areas, since this sector can easily be adapted to all climates and it is an aerial agricultural activity that does not occupy cropped lands, that demands little less investment and benefits are obtained quickly, besides being an intensive non contaminating activity. At the same time, bees are the best pollination insects in nature, they not only provide great amount of nutritive foods, but it can also increase the production and improve the quality of agricultural crops through pollination. We therefore understand the great growth potential that beekeeping has in our land taking into account that it is still very far away from its threshold. Regarding the productive chain of this sector, we must say that it permanently employs around 60,000, and during the harvest period great amount of temporary personnel are hired, which gives a result of 90,000 employees for said period. Due to its structure, the honey chain can be regarded as not very complex, due to the fact that the final product does not require deep physical transformations to be commercialized, having the participation of very few agents in this activity. In general, honey goes from the individual or associated producer towards the beekeeper and then to the exporter; from the producer directly to the exporter; or from the producer to the sub divider; and it can even happen that the producer associated with other agents, goes through all necessary stages until exporting the honey obtained after the harvesting period. Annual honey production is around 1.2 million tons and is highly concentrated, taking into account that only six countries account for half of the total production. Among them, Argentina is in the third place, after China and the United States, representing 70% of the honey generated in the South hemisphere of the American continent. At the same time, it concentrates 25% of the entire continent and finally 6% of the total produced and commercialized worldwide. Around mid 90´s, the national production of this product experienced a significant expansion, increasing 40% in only 5 years. It is around 75,000 annual tons and according to different referents of the sector, Argentina has the possibility to displace the United States in the next year from the second place of the international ranking. The maximum value of production took place in 2005, year in which production exceeded 100,000 tons of honey. Regarding Argentine foreign trade of natural honey (subheading 040900 N.C.M.), it is worth mentioning that the situation is very favorable for our country, since out of the total commercialized internationally, exports represented 99.93% in 2010, while imports only reached 0.07% of the total. In this way, the business exchange of the five-year period 2006-2010 goes up to over 803.8 million dollars, with a favorable balance for our country near 800.9 million. As it can be simply observed, Argentine honey imports are very reduced, this is clearly because this is a net producer country. Regarding national external sales specifically, we can appreciate that they have fluctuated during the five-year period 2006-2010, with an approximate increase of 12.5% in the exported volume towards the end of the period, going from exporting a value of approx. 154.1 million dollars during the first year to 173.3 million dollars in 2010. Below is graphic Nº2, which represents national sales of honey during said five-year period:

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Report beekeeping industry Graphic No2. Argentina: evolution of honey exports (expressed in million dollars) 200 180 160 140 120 100 80 60 40 20 0 2006

2007

2008

2009

2010

Source: National Institute of Statistics

In short, the quality of Argentine honey is recognized worldwide as a result of its outstanding characteristics, and therefore, the international demand has increased during the last years. It is important to mention that, out of the total exports, 98% belongs to bulk honey, while the rest is composed of fractionated honey, so shipments of fractioned honey have great potential in the short term. Exporters of this type of product are composed, mostly, of small businesses that negotiate specifically with each country annually. It is necessary to remember that the kilogram is paid twice as much (minimum) that the bulk kilogram, that is why it is possible to infer that an increase of external sales of these products will bring great benefits to regional economies. The analysis of shipments destinations shows that in 2010 the Federal Republic of Germany positioned as the market with greatest demand of national honey, since it had the incidence of 38.2% of the total Argentine exports with purchases for 66.2 million dollars. The United States occupies the second place; this country acquired natural honey during said year for over 53.1 million dollars, accounting for 30.6% of Argentine sales in 2010. We have to highlight that these two markets have strong incidence in our sales, which during the five-year period in question was over 60% and 68.8% in 2010. Finally, it is worth pointing out that Italy and Japan occupied the third and fourth place respectively with volumes of 12.8 million dollars in the case of the European country and almost 10 million in the case of Japan in 2010. Below, graphic

Graphic No3. Argentina. Main destinations of honey exports. Year 2010 Rest

18%

Germany 38%

Japan 06%

Italy 07%

United States

31% Source: National Institute of Statistics

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Report beekeeping industry Interview | Ricardo Parra, President of AGLH S.A. (Las Quinas)

“Growth has been vertiginous and constant” With eight years of life, the company AGLH S.A (Las Quinas) has reached the highest standard in foods worldwide. Besides producing seven varieties of honey, they produce dulce de leche (caramel), and export their products to the United States, European Union, Venezuela and Japan. In November, they received the international award BIOLMIEL “BIOL HIGH QUALITY” to the best certified organic honey of the world, from world specialists. Ricardo Parra, President of the company, tells us proudly the steps that followed this distinction.

AGLH S.A. was founded in 2003. How the process of creating the company and what was the objective when it was founded? AGLH S.A. (Las Quinas) was created thinking in a company capable of offering natural and high quality products at a fair price, so that more people would be able to have better diet and nutrition. For that, we built a plant that has cutting-edge machinery with a modern, simple layout, which complies with all the safety measures that certify food sanity. There was also a lot of work done in beehives, taking care of the material used, harvest times and genetics, food and cure of bees. Then we continued with the process of Quality Standards that would let us offer trust to foreign customers that are thousands of miles away, complying with production and quality standards similar to those used in the main destinations. We currently have the highest Quality standard in foods worldwide, being certified FSSC 22.000, ISO 22.000, PAS 220, Orgánico OIA de Argentina and BIO from Germany and religious certifications.

Also, we provide constant training to the staff in plant, as well as to those in the field with beehives, where BPM are followed.

Eight years later, how do you see the growth experienced by the company? What obstacles did the company have overcome during this process? The growth has been vertiginous and constant. Seeing ourselves today selling our products in destinations as demanding as the US, EU and Japan, fills us with pride but it is also an obligation to keep improving constantly. As in every activity, there were some obstacles that have represented some problems and we know that there will be others. There were many problems that had to be solved on the go like finding reliable and entitled providers (packages, lids, honey, machines), going through companies that would provide us with services with the responsibility that we request (including fumigation, laboratories, foreign trade, certifiers, among others), to then focus in business and administrative issues. Our experience indicates that it is very important to facilitate access to credits to smaller SMEs in order to better compete in external markets. News

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Interview | Ricardo Parra, Presidente de AGLH S.A (Las Quinas)

What are the pillars of the company? Just as we proposed them from the very beginning, the most important pillars are seriousness, fulfillment and respect towards the people we work with. Commitment among members of a company is needed for a company to work and achieve objectives. Then respect to providers, customers and consumers will result in the permanence in the market upon delivering quality products. We do not know how to work alone; we depend on the integration of all-intervening parties, providers, customers and employees of our company. Daily and consistent work helps and that is of vital importance.

Which food safety standards does the company comply with? In our company, we comply with the following food safety standards: *FSSC 22000 (Food Safety System Certification) certification standards for a Food Safety and Management System, it is the last certification scheme posted for industries that produce foods. Approved by the GFSI (Global Food Safety Initiative) PAS 220 (Publicly Available Specification) *PAS 220 is designed to be used together with ISO 22000, the standard known internationally for management of food safety. We were the first company in obtaining it and one of the few Argentine companies that has it. *ISO 22000 (International Organization for Standardization): this standard is a Management System of Food Safety. It defines the requirements related to Food Safety for companies that need to reach certain Safety levels above legislation. It is a requirement that harmonizes market and consumers’ needs. We were the first company in the honey industry to be certified with this standard. 30

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*HACCP (Hazard Analysis and Critical Control Points) by the Agrifood Quality and Sanity National Service (SENASA) pursuant to the general outlines provided by the Norm N° 852/2004/CE of the European Union. We were the first Argentine company of the honey industry to have the certification by SENASA. Organic Certification: certificates by OIA and BIO issued by the German Government. FDA (Food and Drug Administration) certification required to operate in the US market. KOSHER PASSOVER: Certification of products for the consumption of local and international Jewish community. HALAL: Certification of products for the consumption of the Arab community.

What technology did you have to incorporate to improve the product? Taking into account all the requirements to be complied with, both from the certifications that we incorporated as well as from foreign customers, we invested in different areas to guarantee mainly safety and consistency through the different stages of processes. Not only during the bottling line (with metal detectors, jar cleaners and scales for in-line weighing), but also at the building level with the incorporation of antibacterial filters, stainless steel drain system, as well as a comprehensive software that allows us to offer our customers the complete traceability from beehives to jars. All of them are investments that let us keep improving and differentiating our products. You produce seven types of honey, how did each variety arise and in order to satisfy which needs?


Report beekeeping industry

We started producing and processing the most traditional and popular types of honey, which are Multifloral ones. We started with liquid multifloral honey that we call Classic, with a very intense flavor and a little darker color, and Premium liquid multifloral honey that has a softer taste and clearer color. We then incorporated a multifloral Creamy honey, which is not the solid known one, but a honey that in solid state is subjected to a creamy cold process, which gives it a spreadable consistency, very similar to that of dulce de leche. We later evaluated which contributions we were able to make to generate distinctive honeys, taking advantage of the Argentine autochthonous floras, using those flowerings that we thought had an important presence. This is a segment that was targeted mainly to external markets as well as to more trained palates within our market. This is how we started developing monofloral or typified honeys, where the difference lies in the established percentage of pollen these honey have and that belongs to a certain flora. In our case, we decided to develop monofloral honeys of Lemon, Eucalyptus and Carob. All that called for an important training process, since it is not the same working multifloral honeys and monofloral honeys, where in general the flowering is more aggressive and there is less time to work the beehive. It also obliged us to put our beehives in fields located in different places of the country, as well as to establish agreements with cooperatives for the provision of different honeys. Finally we obtained the organic certifications that complete our range of honeys, and target a select public that prefers the consumption of this type of products. There is still a lot of work to be done in the organic sector, since the general public is not very well informed about the benefits of consuming these foods or the differences that they have with conventional ones. We are currently starting to work on dissemination at fairs and events

where organic products are exhibited.

When did you start exporting and to which markets? Since the beginning of the company we were determined to assist the domestic and international markets as well as, but focusing more on the latter one due to consumption habits (200 grams of honey per capita are consumed in Argentina, versus 2/3 kg in the US, Japan or the European Union). We started exporting in 2007 and some of the countries where we develop business activities are: the US, with a big importer that not only provides for the retail segment but also for the food service, European Union, Japan with two major importers and Venezuela with an importer focused on Argentine products, among others.

Which markets are you planning to conquer in the short and medium term? The process of conquering a market demands for an investment during certain time to disseminate a new product, grow with it and then consolidate. We are constantly making contacts with companies from different countries in which we intend to introduce the products. So markets to be accessed depend on the different business and bureaucratic factors such as certifications and registries of products. Some of the markets that we are aiming to develop are: Arab Countries (Middle East), non-traditional European countries and also keep growing in Asia, where the demand of natural and healthy products is growing and is highly valued by customers.

What percentage of the production of honey is exported and how much goes to the internal consumption? What is the exported volume? Approximately 70% of the total turnover is exported. One of our main destinations is Japan, which is undergoing a very difficult News

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Entrevista RicardoParra, Parra,President Presidenteofde AGLH S.A Interview ||Ricardo AGLH S.A (Las Quinas)

moment, not only due to the economic situation of the North hemisphere, but also due to the natural disaster that took place and is still affecting it. The annual volume is about 2 containers per month.

Do you also export dulce de leche? What are the differences between this market and that of honey? We export dulce de leche mainly to Japan. Honey is a recognized and valued product worldwide because is natural and rich in nutrition (vitamins, minerals, sugars). It is present in the breakfast diet, in markets that know about its advantages. This does not happen in the local market where we have to inform about the benefits of its use. On the contrary, dulce de leche is not so recognized internationally, only in some countries of Latin America and Spain. Therefore, it is necessary to explain what it is, how it can be consumed and that it is a flagship product of Argentina. Basically, we have to educate the potential customer, which implies a longer path.

In the framework of Apimondia, the honey that you produce was selected as “the best organic certified honey of the world”. What does this distinction represent to your company? The prestigious and very strict international award BIOLMIEL “BIOL HIGH QUALITY” to the best organic certified honey of the world is given, among other entities, by the Italian institution ICEA (Instituto per la Certificazione Etica ed Ambientale). The jury is composed by members of different nationalities, like its president, the Italian Gian Luiggi Marcazzan, an eminence in the honey sector. In this opportunity, since it took place in the framework of Apimondia and the award was given in our country, some very prestigious and qualified entities were also members of the jury, such as INTI, INTA and the National Ministry of Agriculture. We were proud to be selected among over 200 honeys coming from the entire world. 32

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The fact that we were the first Argentine company to obtain the award, taking into account the strict requirements demanded by international juries for prime products, shows that the path chosen when offering high quality and natural products at a reasonable price is the right one and is recognized. We are encouraged to keep investigating, innovating and adding Argentine value.

What differences do you see between the market of fractioned honey and that of bulk honey? They are different markets, in the fractioned honey, the whole production chain receives national added value, from the beehive to the final product, the sealed jar and the labeling, ready to be consumed. Aspects like product presentation are valued here, like the total filtering of impurities, sensorial characteristics, aromas, flavors, origins, among others, and the Argentine brand ends up being associated with the product in world supermarkets. The bulk honey (drums) is a commodity, it constitutes a business where honey is basically sold to be mixed with another one of different origin and is bottled or used as raw material/components for other food products in transit. Argentina is a world leader in production and exportation and is recognized for the advantages of its honey, which has a long history in bulk exports.

How would you define your experience with Fundación ExportAr? What benefits did you obtain from participating in the activities of the Fundación? We have been in contact with Fundación ExportAr for over 6 years already, using some of the services they offer to Argentine exporters. Our company has participated periodically in Fairs (Fancy Food, Anuga, Sial, IFE and many others), Reverse Trade missions, Business Rounds, activities such as that of the French TGV, business trips, and workshops, among others. Surely, the contribution is very useful and results in a great complement for the business activities that a company develops. We hope to generate more and better services, translating them into intelligent


Report beekeeping industry

business actions and more participation in business events in other countries. With this concept, I aim at attending to international events again, which is what will reaffirm the presence of Argentine products overseas. It is not so useful to participate in an event if you do not assist the following years and for some time. Of course this takes previous planning and that is why Fundación ExportAr is a useful mechanism during the process of dissemination of Argentine products and services overseas.

that we cannot fulfill, since this would only affect the image of the country and other Argentine companies. And mainly patience and perseverance; sometimes the exporting process, when developing a customer from the start takes years.

Lastly, I’d like to especially thank three experts who are always next to us in all the activities that we develop jointly: Juan Marcos Melo and Mercedes Maceira from the Technical Assistance Department to Companies and Carolina Cuenca from Exports Promotion.

What advice would you give to a small producer who is just starting to export or planning to do so in the short term? Work together with Fundación ExportAr, participate in fairs to exhibit their products, choose an Export Group to generate synergy with other companies that already have some experience in foreign markets. Fundación ExportAr offers training services to the exporter and it is a place where the companies that are starting can obtain advice and recommendations from professionals to avoid making common mistakes in the exporting process and exploration of new markets. Companies find a place where they can share experiences and doubts. There are some other determining factors such as different cultures, requirements and rules for each market, that require us to rise to the occasion to comply with them. Consolidating a customer is harder than obtaining one that is why it is not only about selling overseas but also keeping the customers. The value of the commitment taken is probably the most important controllable variable. We do not assume responsibilities News

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Interview | Jaime Feeny, President of Natural Foods S.A.

“Our products are unique : we say it and we prove it� Since its birth in 1988, Aleluya positioned itself very positively in the honey market, with products of outstanding and high quality features. Today, its name is strong in the sector: at a local level, they are market leaders of massive consumption, and at international level, they have settled as the first exporters of bottled honey for retail. Jaime Feeny, President of Natural Foods S.A.- creators of Aleluya- highlights the integrity, continuity and predictability that the company is based on to function, characteristics that add value to their products.

When was the company created? And how was its evolution? It was born in 1987 but our launching to domestic and international markets was in 1988 when we finished installing our Industrial Plant in Tandil. The company was conceived as a services provider company, strictly speaking: i.e. putting ourselves in the shoes of others, meeting their needs and trying to rise to the occasion, whether with consumers from the whole world, customers, providers and people we work with from so many other environments. This has been our formula and the results can be observed: we lead the market in massive consumption of honey in our country and we are the first exporters of bottled honey for retail. As all business activity, ours has been marked by some contrasts but we have always been- despite some flaws- faithful to our convictions and that translates into integrity, continuity and predictability; characteristics that are not so common nowadays and that simply add so much value. Our products are unique. We say it and prove it.

When did you start exporting and to which markets? Since 1988 to date we have exported to 16 different destinations. With certain markets we keep a very constant sales relationship. Some examples are: North of Africa, Europe, United States and Japan. 34

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Report beekeeping industry

What percentage of honey is exported and how much is sold in the domestic market? It has varied depending on the time, but nowadays, we are focused on reaching and keeping 50% sales in each market since both of them are important. Our strategy is always assisting both fronts, regardless of the circumstantial difficulties that may arise in one sense or another. Both routes introduce great challenges!

What features make Argentine honey distinct from others? The quality and professionalism of producers and technicians are one of the features. In this sense, it is very similar to what has happened in the last years to our agriculture.

How do you manage quality in the company processes? Do you follow the requirements of some system to control food safety? There are people responsible for quality but even more important, every department of the company has a chair in the Quality Committee that takes care of management objectives and participates actively. We work with HACCP practices and we are confident that we will start the path of the BRC soon.

Are you planning to diversify production towards other fields? Our brand ALELUYA enjoys of a great reputation and is perceived by consumers as a product with characteristics that grant strong presence in their share of mind when they go grocery shopping. That is why we have entered the sauce market always respecting those values and we pay attention to other opportunities but we know that if we want to do it with the ALELUYA style it will take some time.

What is your assessment of the participation in the Fair Anuga? In our opinion, Anuga is the best food Fair worldwide, it is always very beneficial. We observed renewed interest from North of Africa, a market usually supplied mainly by Spain and Germany.

These markets are big honey consumers (with religious bases) and if we find the proper counterpart, we can generate valuable bonds. But the most interesting piece of news as a long-term project was the amount of queries received from Chinese businessmen, who, faced with the growing development of their country, glimpse an opportunity to start importing high quality honeys.

How would you assess the work of Fundaci贸n ExportAr, had you had previous experiences with it? Yes, for instance in the international business round developed in the framework of Apimondia Fair. The task of Fundaci贸n is arduous and complex. Results are very good, and for smaller companies the role of ExportAr is irreplaceable and very valuable.

What are the objectives of the company in the short and medium term? What markets are you looking to conquer? We are convinced that there are opportunities in the foreign market, mainly in China and we also believe that there are growing opportunities at a local level. We are currently designing a New Strategic Plan with 5 years projection that we hope to set off in 2012. It consists in a) significant increase of the budget for communications and marketing in the local market and b) budget allocation to boost the foreign market and in particular, B2B contacts. The foreseen result implies multiplying the current volume 1.5 times for 2014 in the consequent expansion of our installed capacity and increase the employment level.

How do you foresee the future of the sector? There is no doubt that there is a lot to be done and the responsibility is very big since it is a sector that allows for the development of over 25,000 families. There is growing demand in the world for products perceived as natural and healthy, and honey stands out among them. However, there is significant tension from the offer perspective that does not go at the same rhythm. Argentina is still a privileged place due to the nature for honey production so the opportunity is very important. Today we are the third world producers, after China and the United Sates.

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Interview| Hernán García Lahitou, CFO for SOZ

SOZ : diversity and exclusivity in gourmet seasonings From the beginning, SOZ has positioned itself in the domestic and international market as a leader company of high quality, innovative and exclusive seasonings. Their five varieties of gourmet mustard include exquisite flavors that refer to different regions of the world like Asia or the Mediterranean, while SOZ traditional Honey Mustard, developed with pure multifloral honey has become a fundamental element for the sweet-and-sour cuisine. Hernán García Lahitou, CFO of SOZ, defines what characteristics determine the success of their products.

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Report beekeeping industry How did the idea of developing SOZ come up? What opportunities were you able to detect (previous research)? The idea came up in 2003/4 when, due to the recent crises, two particular circumstances took place: on the one hand, at the local level, imported products disappeared from the aisles and in the seasoning industry, there were left only mayonnaise, mustard, ketchup and salsa golf. On the other hand, at the international level, the exchange rate made us very competitive and Argentina, despite everything, kept a very good reputation as food producer. Keeping this scenario in mind, we set out to develop a high quality product line that would have international projection.

How did the company evolve after 7 years? What objectives did you achieve and what are still pending? Since the beginning in 2004, the company evolved a lot. However, since it was our first own company and having started with a modest capital, the launching period was longer than desirable. Anyway, we chose to respect our rhythm and do things well. We managed to develop a line that makes us proud due to its quality, originality and acceptance. We were also able to export to many destinations (we are currently focusing on Latin America), and on establishing the company in the local market, with direct presence in big supermarket chains, big stores and many wineries. Some of our pending objectives are: deepening our local presence, growing even more in Latin America, and of course, keep exporting to Europe, United States and Asia. The expansion of our product line is now in the grey area between what has been achieved and what is still pending since there are still a few days before closing the launching.

Are you certified by any food safety standard? The products have all the certifications necessary in order to be commercialized in Argentina and in the rest of Latin America. Besides, for sales to other destinations such as United States, analysis are required for each particular shipment.

What are the characteristics of the gourmet seasoning market in our country? It is a market that has grown a lot in the last years but we still believe that it is far from reaching its ceiling.

What is the evaluation of Argentine gourmet products overseas?

What type of honey do you use? We use Pure multiflora honey.

-Today, you have five different types of mustard, how did they arise? Are you planning to launch any other variety in the short-medium term? Today the varieties are: Olive & Balsamic (Mediterranean), Wasabi (Asia), Honey Mustard (Classic), Japeño (México) and Honey Dijon (France). The traditional SOZ comes from a recipe created by one of the partners, who, despite being an engineer, has also developed a culinary profile. The other types of mustard were thought with the cooperation of other local chefs, with the aim of capturing flavors from different parts of the world. In the short term, we are planning to launch some seasonings to complement our current line.

-Are you planning to diversify towards other branches of the “gourmet” culture? For the time being, our focus is put on seasonings.

-Which activities did you attend together with Fundación ExportAr? What opportunities did each of them represent for the company? We attended, together with Fundación ExportAr some International Fairs such as Anuga and SIAL Paris, which gave us the chance, especially in the beginning, to get in contact with potential clients and providers.

-To which markets do you currently export and what are the most demanded varieties from each market? In Latin America, we mainly export to Brazil, Venezuela, Chile, Paraguay and Uruguay. SOZ traditional Honey Mustard is always the most demanded variety. However, in Brazil for instance, SOZ Wasabi is very successful and SOZ Olive & Balsamic is very successful in Venezuela. Other frequent destinations of our exports are the United States, Spain, Mexico and Saudi Arabia.

-Which markets are you aiming at in the short-medium term? The idea is to strengthen our presence in Latin and Central America.

Generally speaking, the reputation of our country as a food producer is very good, especially in the evaluation of its raw materials. Then there is the work that each producer must do to reach his own prestige. In that stricter analysis, one finds that the experiences that customers from overseas convey vary a lot.

-What would you recommend to SMEs that want to start exporting?

To what elements do you attribute the growth in the demand for these products in the world?

They should also travel, observe how business is done and perform a follow-up of their customers in order to grow. This is paramount; otherwise, sales could come to a standstill. Finally, I’d advise them to talk to their banks about available prefinancing lines for exports since times are long and this could result to be very strict financially speaking.

We assume that this is due to many factors: on the one hand, the fact that developing countries are going through a very important growth period and many of their inhabitants are being incorporated to the consumption of these products. On the other hand, a great development of communications as regards cultures and habits that encourage curiosity and the need to try new things.

I’d suggest that, before taking orders, they anticipate having the necessary capacity to fulfill them and especially, they should keep the rhythm without losing quality.

What are the keys to success of SOZ products? First of all, they are products of exquisite flavor done with the best quality ingredients. Also, its characteristics are maintained in time and lastly, the favorable international context. News

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Interview | Santiago Olivera

“Advertisers from around the world know our reputation” Santiago Olivera is Partner and Director of the prestigious advertising company TBWA, and, in addition, Chairman of the Argentine Advertising Association. This is an industry in which our country takes the lead. We can boast of having the best football players, the most distinguished psychologists, and the brightest advertisers, to a point in which we rank 3rd in the world ranking for the last three years. Stepping in this reality (we have the best ones of the sector), advertisers want to export their ideas. “It has been some time since my colleagues have been proposing me to do something to sell our ideas abroad”, told us Olivera in this interview. It is no minor detail this industry generates 1% of Argentina’s GDP.

How did you come up with the idea of exporting ideas? -It has been a while since many production firms have been filming advertisements, and even movies in our country benefiting from quality and lower costs. However, ideas are not being exported to the same extent. Therefore, my Association partners have suggested me to do something to conquer markets. We had no idea what to do until we found Fundación ExportAr.

Why is so important the link with Fundación? -It has become vital. It is amazing what they do; I am completely 38

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honest about this. I did not know about the services Fundación ExportAr provides, and I have been pleasantly surprised. Market reports are very useful for us since they provide the necessary help to learn where and how to display what we do. Because is not only about going to a Fair and that is it; you need to know which Fair to attend, and what material to bring along. We have to be at the right time in the right place. We are working together on a sectoral brochure that I think will be very useful for presentations.


What markets are you targeting? First of all, we want to reach the United States and Mexico. We have to attend international events to be known. But we are targeting companies that could hire our services, not the biggest ones since they already have their agencies. The goal is to be known. Advertisers from around the world know our reputation, but machinery manufacturers in Montana, in the US, do not know us. Therefore, we have to reach them at the right event jointly with the people in charge of offering them our proposal.

In terms of advertising, are ideas universal? Argentineans have the great virtue of adapting to all markets. It is our characteristic, maybe because we are a melting pot of races, maybe because many of us look a lot abroad, but there is convincing proof this is so. Many agencies have commended Argentine creatives ideas for global advertising, which are screened all around the world. We have to show them we are capable of doing it, we have capability that is for sure.

Do awards granted to Argentine advertisers have any influence on this? -Yes, I think they will be a letter of presentation. For around 10 or 15 years, there is the Gunn Report, an initiative designed by an outstanding American advertiser, Donald Gunn, to review the performance of different actors in the world industry. By analyzing advertising festivals of all the countries of the world, a ranking of the best advertising companies is made, along with a ranking of the best networks, best advertisers, best directors, and of course, the best countries. In the last ten years, Argentina has been among the 6 best of the world, an in the last three, it has been on the top 3, together with the United Stated and England. The importance lies, clearly, in that we as a country have added value and that makes us more attractive than many other markets.

Santiago Olivera, 44 years old, is a real veteran in advertising, since he started his career in 1988. He worked for many agencies, in every available position, until 2009, when jointly with Pablo Guillen and Juan Cruz, designed a project of his own in association with the powerful TBWA. As regards his academic studies, he graduated from Fundaci贸n de Altos Estudios en Ciencias Comerciales, and has a master degree in Institutional Communication of the Universidad de Ciencias Empresariales y Sociales

Do you already have a schedule of activities for next year? Yes, after a though analysis with specialists from Fundaci贸n ExportAr, we have selected the ideal events to attend and promote our services. Likewise, we already have scheduled specific activities for 2012. We are grateful to Fundaci贸n.

Is it an objective to repatriate those brilliant minds that have left the country during the crisis in 2001? -Yes, naturally. It is not an immediate objective; today our priority is to increase the export of our services. But we will do anything we can to bring back these talented people. In fact, many of them have come back already because the situation in our country, luckily, is different, and our economy growth has encouraged them and made them and made them to come back. But if we have to do anything on our part to seduce them, certainly will do it.

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Interview | Production Company Sábado

They produce and shoot for all Latin America, United States and they have already arrived in Europe. The production company “Sábado” has managed to export their high quality service and works for very well-known companies (Toyota, Movistar, Johnson and Unilever, among others). Its objective is conquering the European market, that is why they went together with Fundación ExportAr to Cannes and the results can already be observed: they shot for Belgium and Italy and received proposals from Spain. They also have a project coming from Morocco.

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Advertising is an industry with very particular characteristics. Businessmen from the industry wear shorts and snickers. They are completely laid-back and work with overwhelming passion. It is a world in which originality, good taste, youth and the willing to make the other feel comfortable are top priorities. As incredible as it may seem, at the age of 40, creative and directors already start their descending curve, they are “old”. In a sector with so many distinctive features, we found a production company that impacts even from its name: “Sábado” (Saturday). Claudio Córdoba, one of the owners, together with his partner Marcelo Hermida, explains the reason behind the name: “we chose the name thinking in giving the best to our customers even from there. If you think of Saturday, you think of fun, having a good time, party; it is the best day of the week. So we thought that we were going to feel identified with the name in the internal way of working, with harmony and happiness, and in a way to sell ourselves to customers. Like a way of telling them come and you will leave happy”.

-The office of the production company matches the name, right? -Yes, it is a big house, with a big garden, swimming pool and barbecue in Martinez, almost in front of the San Isidro Racecourse. It is a country house turned into a production company office. We have all the technical elements, state-of-the-art machines and a place to offer ourselves as excellent hosts for our customers. It is very common for us to share entire days outdoors and barbecues together with those who come to hire our services.

-What are those services? -We produce all types of shootings and commercials. We finish the whole process and we also have the machines and the professionals to do the post-production. For instance, an advertising agency brings us an idea of a commercial that has already been approved by their customer and we produce it, shoot it, do the postproduction and deliver it ready to be broadcasted. We take care of absolutely everything including: wardrobe, locations, cast, teams, directors, assistants, and catering.

-Are you well positioned in the local market? -Yes, we have very prestigious customers and agencies such as Young & Rubicam, Draft, DDB, Movistar, Toyota, Johnson, Unilever, and PepsiCo, among others. My partner and I have been working in this industry for over 20 years and our customers really trust us. They know that they do not take any risks with us.

-Are you also exporting your services? -Argentina is receiving producers from everywhere in the world who come here seduced by our high level of services and best costs. During the last years, producers cross borders to come to a country in which they have discovered that there is everything they need. First of all, our country offers locations that cover a great range of options: from mountains and deserts, to jungles and waterfalls. We also have glaciers, beaches, the widest river and the city of Buenos Aires, which makes North Americans, and Europeans fall in love at first sight with it. In some corner of Argentina they can always find the “feeling” they are looking for.

-Is the quality of directors another seduction tool? -Of course, we have top-level professionals here, recognized worldwide. The following directors work for Sábado: Alejandro Toledo, Ari Evasio, Nico Parodi, Tato Pereda and the duo Mariano Cohn- Gastón Duprat.

-Do you also have cutting-edge technology? -Yes, we have the best technology to carry out all projects. Our industry has modernized and we offer the best cameras, grips and lights for the different formats of film and video. This excellence level also reaches post-production processes, which are vital. In this regard, there is no obstacle; foreign producers get surprised when they see our facilities and the equipment that we have.

-How does the link with ExportAr benefit your company? -It is vital. We went to the last Cannes Festival, which is the most important event for advertising and the assistance of Fundación ExportAr was extremely important. We invested a lot to be there and take our directors because we knew it was an opportunity to seduce the European market. We are already known in Latin America and the US and we constantly receive proposals but Europe is being a little harder to conquer. That is why we wanted to be present at this Festival. Fundación Exportar gives us precise information that helps us direct our efforts in the best way. When you lack data you run the risk of wasting money and hours of work. You have to go to the appropriate event and with the offer that can seduce certain market. ExportAr has contributed a lot in that sense and we expect to keep strengthening the bond in order to conquer the European market.

-Is that your great objective? -I’d say that right now it is almost an obsession, because we have everything to get there and it is the right time. The key is to make ourselves known and make them see that we are capable. Cannes was the beginning of a new stage in Sábado and we believe that the results will be seen very soon. This is not achieved overnight. But with perseverance we will reach our objective.

-And have you already managed to step in the market of the Old Continent? -Yes, we have one foot there. We are providing a production service for the commercial of a French cheese. The production company that hires us is from Belgium and is called Azimut and the agency is from Genoa, Italy. Alejandro Toledo is the Director of this commercial that will be shot in two days; one day in a location outside a market set like the South of France and the other one inside, in the kitchen of the protagonist.

-Are you working in any other project with European customers? -Yes, we are quoting proposals sent from Spain. A customer from Morocco, Africa has also requested a quote. We cannot name the products and the scripts yet for confidentiality reasons.

-Regarding actors, does the ethnic diversity benefit us? -Yes, very much indeed. We have a population with such diversity that we can always find the necessary look for the production: Spaniards, Italians, Asian, Afro Americans, Jewish, Muslims, Latin, etc.

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The directors These are the talented professionals in the production company staff. With their skills, they make producers from around the world to hire Sábado’s services. Alejandro Toledo He stands out due to his versatility for working different genres. He has filmed all kinds of spots, and developed his career in different parts of the world: the United States, Japan, Middle East, among others. These have enabled him to share ideas with directors, creators, and crew from all around the world. Today, he puts his stamp on Sábado’s works. Ari Evasio When he was 23 years old, he won the Converse All Star Contest for “Best Director”. The same season he made the “Best Video of the Year” awarded by the Rolling Stones magazine. After directing many video clips for renowned national and international artists, he became part of Sábado’s staff, and he is pointed out as the “spoiled child” of Argentine advertising.

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Nico Parodi He graduated from Escuela Profesional de Cinematografía in 1998, at the same time he started working for different advertising film production companies. As Assistant Director he had the chance to work with renowned directors. Meanwhile he studied Photography Directing and Directing of Actors at the Argentine Film Union School. At the beginning of 2005, he started directing commercials for Cuatro Cabezas Films, and had the chance of exploring different production proposals. His strength is humorous commercials based on young language and aesthetics.


Interview | Productora Sábado

Claudio Córdoba

He started his career in 1987 at the Casares Grey & Asociados agency, where he worked until 1995, as Audiovisual Producer. Then he worked in agencies (Leo Burnett, Vincit) and production companies (Spots Films, Cinemanía) to finally establish himself for nine years at Pragma/FCB agency as Producer during the first three years, and later as Chief of the Audiovisual production Division from 2000 to 2006, when he retired to work on his own project “Productora Sábado”, becoming managing partner. He also teaches audiovisual production at the AAAp and Fundación Universidad de Cine

Marcelo Hermida

He studied film making in Argentina, and then television in Spain, where he lived for many years, and when he returned to the country continued taking courses on all areas related to film making. He worked in direction and field production until “Peluca Films” was created with Luciano Podckaminsky. Then he continued his career as Executive Producer at “Andon Films”. For a while he has worked as a free-lance producer until the creation of today’s so called “Sábado” company eight years ago.

Tato Pereda He graduated from Escuela Profesional de Cinematografía in 1998, at the same time he started working for different advertising film production companies. As Assistant Director he had the chance to work with renowned directors. Meanwhile he studied Photography Directing and Directing of Actors at the Argentine Film Union School. At the beginning of 2005, he started directing commercials for Cuatro Cabezas Films, and had the chance of exploring different production proposals. His strength is humorous commercials based on young language and aesthetics.

Mariano Cohn y Gastón Duprat: They have exhibited in many rooms and museums in our country and abroad, such as the MOMA (Museum of Modern Art) in New York, Georges Pompidou Centre and the Cinematheque in Paris, among others. In 2000, they have exhibited a retrospective of their entire work at the National Museum of Fine Arts. Their work in television has been praised by the press and experts. Some of their creations are Televisión Abierta (1999), Cupido, MuchMusic (2000), Cuentos de Terror, with Alberto Laiseca (2001), Navegando con Fede (2002), and Juro que es verdad (2004), among others. In 2003, they developed and directed Ciudad Abierta, the television channel of the City of Buenos Aires. As regards advertising, they have filmed Arnet’s campaign for Santo agency, and the following feature films: Yo Presidente (2006), El artista (2009), and El hombre de al lado (2010). They joined Sábado in 2010, and they associated to film “Querida voy a comprar cigarillos y vuelvo”.

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Training | Seminar “Key tools for exporting”

La Rioja: Important support for internationalization of SMEs In the city of La Rioja the seminar “Key tools for exporting” took place organized by Fundación ExportAr jointly with the General Direction of Foreign Trade of the Ministry of Production and Social Development of the Government of the Province of La Rioja and the Program Al-invest of the Argentine Industrial Union. During the seminar, the main concepts of the internationalization process were exposed to boost the exportable development of SMEs from La Rioja.

National PArk Talampaya. Photography by Bruno Laconianni

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Training

The work coordinated by Fundación ExportAr, the General Direction of Foreign Trade of the Ministry of Production and Social Development of the Government of the Province of La Rioja ant the Program Al- Invest of the Argentine Industrial Union, detected the need to strengthen the internationalization process of small and medium enterprises of the province. That is why the seminar “Key tools for exporting” took place in the Commercial and Industrial Center of the city of La Rioja. The proposal was aimed at companies that are starting to promote their exportable offer overseas, as well as to foreign trade operators and advanced students, with the objective of offering them knowledge or deepening what they already knew.

In that framework, Fundación ExportAr illustrated the services that it renders to the community, the access and virtues, while the Argentine Industrial Union, through a recognized specialist in the subject, was in charge of developing diverse topic specifically chosen to present and offer the invited audience. On the other hand, the Training Department of Fundación ExportAr coordinated the presence of personnel related to the Management of Exports Promotion and the hiring of an International Marketing specialist to approach the most relevant technical aspects of the seminar. The General Directorate of Foreign Trade, on the other hand, was in charge of the coverage of the event and coordinated the organization of it. Accountant Carlos Alberto Sant, General Director of Foreign Trade of the Government of the Province of La Rioja was in charge of welcoming attendants.

At the beginning of the seminar, the representative of ExportAr illustrated and offered companies from La Rioja information about the current tools for business promotion and their benefits and difficulties. There were introduced activities and services that business promotion bodies use in the national, provincial and municipal levels, and their interrelation with the internationalization task of the Argentine exportable offer. The most relevant aspects of each one of the actions developed by

ExportAr were detailed (International Fairs, International Business Rounds, Promotion of Services, among others) and the calendar of activities was exposed, as well as some suggestions to get them started in the participation of them.

Before approaching the main objective of the encounter, Carlos Torrico, professional in charge of the seminar, handed out material to make it easier for the audience to follow his dissertation. The specialist described the consequences of the international expansion of a company and the competitive advantages of this process, the need to define a target market and analyze it carefully, among other aspects. He also pointed out the tools to contact potential buyers, the need to study barriers (socio-cultural, tariff, non-tariff, etc.) logistic issues and calculation of the product final cost. The exhibition generated great interest among those present since it was sequential and didactic, clear and rich in content.

The average of the attendants per day was 40; audience composed by companies, professionals related to foreign trade and advanced students, mostly. In that regard, the audience was diverse: some participants did not have much experience in exports, while others had wider knowledge and were looking to deepen it.

It was the first stage of a sequence of training actions foreseen, which will certainly deepen and precise sectoral concepts of interest aimed at provincial SMEs, all of them with the aim to widen and facilitate the presence of their product in foreign markets. This is the most important commitment and objective: give continuity and facilitate the access in the entire country to knowledge and experience that would let everyone reach successful results in the opening of new markets and business opportunities.

AL-INVEST Program

It represents one of the most important regional programs of economic cooperation of the European Commission in Latin America. The general objective of phase IV is contribute to the social cohesion through the support to strengthening and internationalization of small and medium enterprises of Latin America and the exchange of innovation, concepts and economic relations with their equivalent European companies. The joint work done by Fundación ExportAr and the Argentine Industrial Union, in the framework of Al-Invest Program, resulted in many training proposals aimed at approaching topics of interest related to foreign trade, to be developed in different cities of our country. The project intends to meet the particular knowledge needs for each production area of the country, through seminars that would provide the necessary tools to boost the exportable offer of regional economies.

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Argentine agrifoods exports: Opportunities for the next years

An analysis of the agrifoods imports world situation offers a guide for commercial opportunities our country has on exporting agrifoods products.

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Report Agrifoods

Regional Trends Opportunities for Argentine agrifoods

International trade of agrifoods is undergoing a historic expansion process. Today, the world eats more and more food, and demands products of higher quality and added value.

Overall, current markets of the European Union and NAFTA are, as regards agrifoods purchases, big markets but with low growth rates compared to world average, and is characterized by a scarce participation of our country. By contrast, at regional level, emerging countries are undoubtedly among the countries with more relative growth above world average. This necessarily leads to an increase in their participation in the agrifoods world market.

We are faced with a scenario in which in our country has a specific role as agrifoods world supplier. In this context, through this article, we seek to deepen over the causes that give origin to the world’s increasing demand for foods, and perform and analysis on the possibilities to increase agrifood productivity of our country in the world.

World’s increasing demand for agrifoods

South America is a region with a high increase in the purchase of agrifoods, and Argentina has a strong participation as agrifoods supplier.

In 2005, world imports of agrifoods totaled near 700 billion dollars; in 2009 they reached 900 billion dollars, the 200 billion dollars increase (42.5%) show an annual increase of 9.3%.

The rest of the regions, among which Sub- Saharan Africa, former Soviet Republics, and Arab countries outstand, are territories with high growth rates but with a moderate Argentine participation as agrifoods supplier.

In this framework, there are unique possibilities for the Argentine agrifoods offer, which maintains comparative advantages for production and elaboration.

25%

High growth

Sub-Saharan Africa 20%

Asia

Former Soviet Republics

Central America and the Caribbean

15%

South America

Arab Countries 10%

EU

Low growth

Annual growth rate of agrifoods imports. 2005-2009

Agrifoods imports of Argentine origin. Year 2009

5%

Nafta Japan 0%

20%

LOW SHARE

40% MODERATE SHARE

60%

80%

MEDIAN SHARE

100%

120%

0% 140%

HIGH SHARE

Argentina’s relative share as agrifoods supplier Source: own data based on UN Comtrade

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South America As a destination of our exports, South American countries are of crucial importance. An average of 20% of the total agrifoods exported by Argentina to the world is shipped within the region. Likewise, many countries of the region are at the same time the main buyers of our products, so much so, that as regards the total of our agrifoods exports to the world, Brazil is the second destination in relevance, and Chile falls fifth, which in addition to Colombia and Peru are among the first twenty destinations of importance in the world. At the same time, Argentine agrifoods exports to South America show a sustained increase, from 3,368 billion dollars in 2006 to 6,369 in 2009, with a total increase of 73% and an inter annual growth around 15%. At a large extent, international trade of Agrifoods has a high impact on transportation costs. This represents a competitive advantage for those agrifoods supplier countries which are closer to target markets.

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Argentine agrifoods destinations: year 2009. Taking into account the above mentioned, in the case of South America, agrifoods intra region trade, with purchases over 18 billion dollars, is around 40%. These high intra region purchases rates, which in other regions of the world constitute an obstacle for our products, in this case, and still considering that within South America, Argentina mainly with Brazil are the main agrifoods suppliers, are advantageous. On the other hand, by analyzing the factors that turn this region highly attractive for the international agrifoods trade, all of the countries in the region had, as regards agrifoods imports for the 2006-2009 periods, an inter annual increase above world average ranging from 15 to 25 %, with an outstanding 30% in the case of Venezuela. In this region, Argentina has prevalence as supplier over the rest of the countries in South America. Our country is the main supplier to Bolivia, Chile, Brazil, Uruguay, Peru, and Ecuador, and is among the first three regarding Paraguay, Colombia, and Venezuela.


Report Agrifoods

21%

South America 32%

Asia

20%

European Union Rest

27% Source: own data based on UN Comtrade

High growth

40% 35%

Venezuela

30% 25%

Brazil

Uruguay

Paraguay Colombia

20%

Ecuador

Bolivia

.

Peru

15%

Chile

.

10%

.

Low growth

Annual growth rate of agrifoods imports. 2005-2009

Agrifoods imports of Argentine origin to South American countries. Year 2009.

5% ALTA PARTICIPACIÓN

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

0% 500%

Argentina’s relative share as agrifoods supplier Source: own data based on UN Comtrade

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Asian Countries Asian countries show a high increase of their agrifoods market. Taking a look at country level, the region shows China and Hong Kong as larger markets with high development, whereas South Korea and Japan show low growth. The rest of the countries, except Singapore severely affected by the world crisis, show growth rates between 10 and 25% in their agrifoods imports between 2005 and 2009.

Argentine exports to the region: current situation and opportunities Asian countries are the second destination of Argentine exports, with 25% share of the total.

The factors that explain the development of imports are the rise in regional population, and, mainly, the increase in life quality levels in emerging countries, especially in the People’s Republic of China.

China is the main destination of Argentine agrifoods exports, and among the main twenty destinations there is also Vietnam, Indonesia, and Malaysia, where our country is the third, fifth, sixth, and eighth supplier respectively. As a whole, Argentina is the sixth food supplier of the entire region.

One characteristic of the region, evidenced through the analysis of intra bloc trade, is that two thirds of their agrifoods products are supplied by countries outside the region. This same phenomenon is observed in the list of main agrifoods exporting countries to Asia, ranked in importance as follows: the United States, China, Brazil, Indonesia, and Argentina.

Taking into account the size of the markets, average growth rates, the current Argentine situation compared to them, and the Herfindahl-Hirschman Index analysis, it is therefore concluded that, in general terms, agrifoods suppliers are diversified, and there are clear signals that it will be feasible to broaden our sales to the region.

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Report Agrifoods

21%

Asia South America European Union Rest

32%

27%

20%

MEDIAN SHARE .

MODERATE SHARE

40%

High growth

LOW SHARE

35% 30%

20%

China, Hong Kong

Philippines China, Macao Singapore South Korea

0%

Indonesia

15%

Malaysia Thailand

10% 5%

Japan 10%

25%

Vietnam

China

India

Low growth

Annual growth rate of agrifoods imports. 2005-2009.

Agrifoods imports of Argentine origin to Asia-Pacific countries. Year 2009.

20%

30% 4

0%

50%

60%

70%

80%

90%

0% 100%

Source: own data based on UN Comtrade

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European Union The European Union is the largest agrifoods importer market of the world, concentrating figures around 45% of the total. However, the region has a high concentration of intra region trade; out of the total purchases from the bloc only 30% are performed outside the EU, but taking into account only extra zone imports, the EU represents the largest buyer among the regions of the world. As regards the evolution of its agrifoods imports, in bloc, growth can be observed at a slower pace than world average, but when analyzing each one of its members, their situation is quite uneven. Likewise, traditional markets of the European Union register an increase in agrifoods imports growth rates lower than world average, except for Germany and the Netherlands, whereas new members of the EU, that is, Eastern Europe countries, show high growth rates of foods imports.

Argentine exports to the region: current situation and opportunities Among the main destinations of Argentine foreign sales to the European Union, in decreasing order, are The Netherlands, Spain, Germany and Italy. In all of these cases, imports are over one billion dollars. Other relevant destinations, as regards sales volumes, are the United Kingdom, Poland, France, Denmark, and Belgium. The European Union, with 31.5% constituted in 2009 the principal destination of Argentine agrifoods exports. This bloc seems an excellent opportunity to increase Argentine agrifoods sales through consolidation in traditional markets, with an increase, closer or even lower, to world average, and seeking new markets niches for high added value products. It can also be observed there are great opportunities with new members of the region, markets that are growing between 10 and 20% rates, where our country has little participation as regards their agrifoods purchases.

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Report Agrifoods

21%

European Union Asia South America

20%

Rest 32%

27% Source: own data based on UN Comtrade

20%

High growth

Romania Lithuania

Poland

18%

Slovakia

16%

Latvia

Slovenia

Czech Republic Hungary Finland Austria

Estonia

14% Netherlands

France

Ireland

0% 5

10% Greece

Belgium

Denmark

Luxembourg

12%

Cyprus

Germany

Sweden

Portugal

Low growth

Annual growth rate of agrifoods imports. 2005-2009.

Agrifoods imports of Argentine origin to EU countries. Year 2009.

8%

Spain

6%

Italy

4%

United Kingdom

% LOW SHARE

10%

15%

MODERATE SHARE

2% 0% 30%

20% 25% MEDIAN SHARE

.

Argentina’s relative share as agrifoods supplier Source: own data based on UN Comtrade

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North America Free Trade Agreement or NAFTA countries The North America Free Trade Agreement or NAFTA is, due to its volume, a market of interest for Argentine agrifood products. As food buyer, this bloc shows little dynamism compared to world average, however its purchase volumes (131 billion dollars in 2009, represented 14% of the world’s total agrifood purchases), and individual analysis of each country, with 6% inter year growth rates for the United States, or 7% in Mexico, and over 10% in Canada, make this region very attractive.

Argentine exports to the region: current situation and opportunities

In this case, one of the obstacles observed in the region is a strong component of intra-regional trade, which means NAFTA’s main trading partners are the other member countries of the bloc. Although the main agrifood suppliers to the United States are Canada and Mexico respectively, the imports matrix is widely diversified and with low concentration, due to the size of the American market. This could mean that the United States market, in global terms, offers opportunities for more Argentine products. Likewise, though to a lesser extent, Mexican and Canadian markets offer opportunities to strengthen the commercialization of our products.

The main destination of our exports within the bloc is the United States, where approximately 4% of national agrifood exports are traded, and it corresponds to 75% of shipments to the bloc. Sales to Mexico and Canada are smaller.

MEDIAN SHARE

MODERATE SHARE

.

35% 30% 25% 20% 15% Canada

10%

Mexico

5%

United States 0% 1

0%

20%

30%

40%

50%

60% 7

Argentina’s relative share as agrifoods supplier Source: own data based on UN Comtrade

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40%

High growth

LOW SHARE

Low growth

Annual growth rate of agrifoods imports. 2005-2009.

Agrifoods imports of Argentine origin to NAFTA countries. Year 2009.

0%

80%

90% 1

0% 00%


Report Agrifoods

Central America and the Caribbean This region has a high dynamism in the agrifoods market, with imports growth rates superior to world average, except for Costa Rica and Guatemala, which are slightly below average registered growth rates. The main supplier in each country is the United States, with shares ranging from 28.5% of total imports in El Salvador, to 52.4% in the Dominican Republic. Then, in decreasing importance, there follows the rest of Central America’s countries, such as Panama, Costa Rica, Guatemala, El Salvador, Honduras, and Nicaragua which share a free trade agreement among themselves.

It is worth mentioning the existing trade with the Dominican Republic; Argentina ranks as second supplier, behind the US, with a market share approximately of 6%. Other country to take into account is Panama, with the biggest growing economy in the region, with a 20% annual increase of agrifoods exports. From 2005 to 2009, Argentine exports to this destination have doubled, and have a great penetration potential. The American strong prevalence restricts, except for the countries mentioned before, the relative position of Argentina’s as well as the position of other competing countries in purchases of agrifoods.

Argentine exports to the region: current situation and opportunities Central American and the Caribbean countries are currently a destination of scarce participation of Argentine agrifoods exports.

MEDIAN SHARE .

MODERATE SHARE

40%

High growth

LOW SHARE

35% 30% 25% Panama

20%

Nicaragua

Low growth

Annual growth rate of agrifoods imports. 2005-2009.

Agrifoods imports of Argentine origin to Central America and Caribbean countries. Year 2009.

15%

Dominican Republic El Salvador Guatemala Costa Rica

0% 1

0%

20%

30%

10% 5%

40%

50%

60% 7

0%

80%

90% 1

0% 00%

Argentina’s relative share as agrifoods supplier Source: own data based on UN Comtrade

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Arab countries Arab countries geographically occupy the Asian region of the Middle East and countries of North Africa.

Argentine exports to the region: current situation and opportunities

Most of them are showing high growth rates. Although at regional level, and individually, each one of their territories are economies of small size, most of them show an accelerated development in the last years, therefore increasing their participation in the agrifoods world market.

Argentina shows long experience as agrifoods supplier in most Arab countries, which results in a surplus commercial position for our country.

In addition, most of Arab nations, except for the Republic of Sudan, have little and moderate concentration as regards agrifoods suppliers, and a very low presence in the intraregional market, only over 10%. This structural situation allows us to infer there are potential opportunities for trading our products in this market.

Due to its relative position and exported volumes, it is interesting to highlight the markets of Tunisia, where Argentina has the best relative participation, Algeria where our country is the second relevant agrifoods exporter, Egypt, and to a lesser extent, Morocco These circumstances, in addition to the increase of agrifoods in the world market share, even considering the current political situation in the region; make us place this region as an excellent opportunity to increase our sales.

MEDIAN SHARE

MODERATE SHARE

35% 30% 25% Oman

Egypt United Arab Emirates Lebanon

20% Algeria Tunisia

10%

Sudan

5%

Saudi Arabia 0% 1

0%

20%

30%

Source: own data based on UN Comtrade

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15%

Jordan

Morocco

40%

50%

Argentina’s relative share as agrifoods supplier

56

40%

High growth

LOW SHARE

Low growth

Annual growth rate of agrifoods imports. 2005-2009.

Agrifoods imports of Argentine origin to Arab countries. Year 2009.

60% 7

0%

80%

90% 1

0% 00%


Report Agrifoods

Former Soviet Republics The group of former Soviet Republics, except Belarus, is among the countries with high growth of agrifoods imports.

Argentine exports to the region: current situation and opportunities

The total of these Republics, except Ukraine, are members of the Commonwealth of Independent States (CIS), an international cooperation and trade bloc.

The Russian market is a relevant destination for Argentine exports. There, the presence of our products has a moderate participation. In the rest of the countries of the region, Argentina has a low participation in the agrifoods supply chain.

Agrifoods trade in CIS member countries, plus Ukraine, is clearly lead by Russia, with total participation in markets ranging from 20% in Ukraine to 43% in Kazakhstan.

The strategy towards the increase of Argentine exports to the region should continue to be aimed at, in the first place (as it currently happens), the Russian market. Beyond the fact that the agrifood trade between CIS member countries, plus Ukraine, is led by Russia and Ukraine, and given the current situation of imports growth in the region, and the great amount of extra regional trade (almost 83%),it is possible to increase presence in the rest of the markets.

Other big agrifoods supplier is Ukraine, reaching 5% share of the Russian market, and 10% market share in the rest of the countries, except in Moldova, where Ukraine is the main supplier with a 33% market share.

Agrifoods imports of Argentine origin to the Russian federation and former Soviet Republics. Year 2009.

High growth

40% 35% Kyrgystan 30% 25% Azerbaijan Armenia Kazakhstan Ukraine Moldova

Low growth

Annual growth rate of agrifoods imports. 2005-2009.

MEDIAN SHARE

MODERATE SHARE

LOW SHARE

20% Russian Federation 15% 10%

Belarus

0% 1

0%

20%

5%

30%

40%

50%

60% 7

0%

80%

90% 1

0% 00%

Argentina’s relative share as agrifoods supplier

Source: own data based on UN Comtrade

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Causes that suggest a world increase in the agrifoods demand There are many factors that explain the current agrifoods imports growth, and the positive trend regarding them. Among these factors, we can mention: increase in world population, transfer between rural and urban inhabitants, and, mainly, improvement of life levels in emerging countries, especially in the People’s Republic of China.

Population growth Fast population growth, experienced in the last 200 years, justifies for many reasons: a decrease in mortality rates, increase in longevity rates, and greater access to food sources. This process has taken place as a consequence of health, economic, and technological advances which made possible the elimination or cure of diseases, and the dissemination of new production techniques that enabled a great portion of the population to access foods. Although birth rates are decreasing in some countries, according to the UN estimates, the world population trend will keep rising, reaching in 2050 around 9 billion inhabitants.

Population growth projection. In million persons 10000

8919 7851

8000

6071 6000

4068

4000

2519 2000

0

Source: own data based on the UN.

Population growth is expected to be uneven, with higher increase in African nations, and for the rest of the regions in the world it is expected to range between 40 and 50%, except in Europe where it is supposed to decrease around 13%

World population divided by continents. 1950 -2050. In million persons

Source: own data based on the UN.

Population displacement In the last decades, parallel to mass population growth, we have witnessed a significant population displacement from rural areas to urban centers. In 1950 there were around 750 million of persons living in urban areas, which represented 25% of total population. Today, these areas surpass the number of inhabitants in rural regions. Cities are growing at a fast pace –more than 90% of population growth in emerging countries takes place in cities- and every day 180,000 58

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Report Agrifoods Rural and urban population in the world. 1950 -2030. In billion persons

Source: data based on ICONE from the UN

people are added to urban population. For 2030, it is estimated 60% of world population will be living in urban areas. Growth and world expansion of metropolis are a phenomenon that has developed with an increasing dynamism in the last century, especially during the past two decades which, in turn, results in a higher consumption of elaborated foods.

Change in eating habits

Other trend to be taken into account to do an analysis of the future agrifoods scenario is eating habits that in most part of the world’s population have been changing in the last years. Diet has become richer in calories and it consists of a greater number of elaborated foods, which requires production processes and more added value. We are faced with the substitution of cereals starches for more added value products such as beef, dairy, jams, fruits, processed foods, among others. This change in eating habits and the increase of calories values in the population’s diet are more evident in urban populations and especially in large cities.

Change in world eating patterns per capita 180

Kcal per person per day

160 140 120 100 80 60 40 20 0

Cereals

Legumes Roots and tubers

Sugars

Food group with decreasing or lower forecasted growth 1969/71

1979/811

989/91

1999/01

Milk

Meat

Oleaginous and

Food group with higher forecasted growth 2030

2050

Source: World agriculture: towards 2030/2050. Prospects for food, nutrition, agriculture and major commodity groups.FAO 200

Work methodology In order to characterize the evolution of agrifood imports in the 77 analyzed markets, it has been by the attractiveness matrix, which classifies between big and small markets, of rapid or low growth, according to their situation with respect to world average. During the period analyzed, 2005-2009, a market was considered to be big if it surpassed 1.2% of the world market and as regards the expansion rate if average annual growth was 9.3%. To define the participation degree of Argentine exports, and therefore taking into account the strategies that have been followed, it has been used a modified BCG matrix, considering the intensity of exports by our country, the penetration level with respect to the biggest competitor such as market dynamism, measured by the annual growth rate of agrifoods imports. To characterize regions under analysis, we have taken into account the origin of them, by analyzing the amount of imports coming from and outside the zone. To analyze the degree of concentration of agrifood suppliers in each region, considering as a proxy variable the general market permeability, we have used the Hirschman-Herfindahl index (HHI). This index gives a measure on the market structure. To calculate it we have considered not only the number of agrifood supplier countries but also their relative participation.

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Fundaci贸n ExportAr Agreement

SENASA at international exhibitions The National Service of Agrifood Health and Quality (Senasa) takes part in different national and international exhibitions, in order to give advice to exporters and importers of agrifood on phytosanitary requirements that the Argentine Republic and buyer countries of said products demand. Under the agreement between Fundaci贸n ExportAr and Senasa, a decentralized organization of the Ministry of Agriculture, Livestock and Fisheries of the nation, during 2011 Senasa will participate in different fairs and exhibitions at national and international levels, to give advice to agrifood exporters and importers about phytosanitary requirements that the Argentine Republic and buyer countries demand of said products. It is very common for the Senasa to show its activities in different national fairs. With this agreement the authorities of this organization have decided to widen their scope and participate in well-known international exhibitions related to the agrifood industry and contribute to the development of the international trade for these products. The purpose of this agreement between the two organizations is to implement the necessary means and actions to reach mutual technical complementation and carry out in a coordinated way projects in areas of mutual interest, working in cooperation through different activities. In this regard, the Senasa and Fundaci贸n ExportAr jointly assist small and medium agrifood exporters abroad, as well as boosting imports, in matters related to quality and health in agrifood. This joint work permits collaboration in the design of the necessary conditions for the development of actions towards the fulfilment of the export policies set forth by the national government. Thus the Senasa widens its regional scope by participating in these international meetings, adapting and accompanying its main goal that is to strengthen the role of the state on animal and vegetable health, food safety and environment care.

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For further information: www.senasa.gov.ar 0800-999-2386

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Misiones Special report

Misiones has a truly fascinating landscape, ranging from the majestic Iguazú Falls – recently voted one of the Wonders of the World – to its forests (Selva Misionera) and typical red soils. But the province of Misiones, in the north of our country, is not merely a tourist attraction. Its economic activity has developed rapidly over recent years thanks to growth in its production structure, fundamentally in the industrialisation of primary products, either in sawmills or through the cellulose paper industry, or the preparation of tobacco, yerba mate and tea. This edition of News includes a complete report on the province, with reference to its most important production chains, exportable supply and growth of GGP, and an interview with the coordinator of the “Yerba Mate and Tea Export Group,” which comprises 6 local enterprises. We also talked to Patricio Mac Donagh, Executive Director of APF (Forestry Production Agglomeration) on his work to promote increased competitiveness in forestry-industrial SMEs. From the Directorate General of Trade, Integration and International Relations of the province of Misiones, María Martha Oria speaks of the assistance offered to companies in Misiones in their internationalisation process. Finally, there is a very interesting interview with Dr. Lía Fabiola Bianco, Minister of the Secretariat of State for Mutual Cooperative Action, Trade and Integration of Misiones, who discusses the benefits of the new port works being carried out to consolidate Misiones as a logistics association platform for the whole Mercosur Bloc. News

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Misiones Characteristics Total area: 29,801 km² Total population: 1,101,593 inhabs. Location: Argentine Mesopotamian Region Population Density: 32.39 inhabs. per km² Climate: Warm and humid, mean temperature of 22º to 26º C Main Departments Posadas (324,756 inhabs.) Oberá (107,501 inhabs.) Eldorado (78,221 inhabs.) Iguazú (82,227 inhabs.) Guaraní (67,897 inhabs.) San Ignacio (57,728 inhabs.) Main airports Libertador General José de San Martín International Airport, Posadas Puerto Iguazú International Airport

Source: Fundación ExportAr based on data from the Provincial Institute of Statistics and Censuses

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Special report Misiones

Located in the far north-east of Argentina, in the Mesopotamia Region, Misiones borders to the north with the Federative Republic of Brazil, to the south with the Argentine province of Corrientes, and to the west with the Republic of Paraguay. Surrounded by three rivers (Paraná, Uruguay and Iguazú), it is the second smallest province in Argentina after Tucumán, covering a surface area of 29,801 km². It shares its tableland relief with Brazil, and is characterised by a soil which is deep red due to its high ferrous content. The climate is subtropical, with no dry season, which gives the highest humidity rates in the country. Its bioma is known as the Selva Misionera. This province is one of the most important tourist destinations in the country, partly thanks to the Iguazú Falls.

Producto Bruto Geográfico

In the period 2002-2007, growth of the GGP of the province of Misiones closely followed the sustained growth of national GDP. In 2002, the GGP of the province was ARS 5519 million, and this rose to ARS 17,092 million in 2007. Misiones accounts for approximately 1.5% of the Argentine Republic’s gross domestic product. Between 1991 and 2007, its gross geographical product, measured at constant 1993 prices, grew 129%, i.e., an average annual growth rate of 5.3%. In the same period, the variation in the province’s GGP was 210%, giving a year-on-year increase of 10.2%, which reflects this constant growth. There was also a 52.5% increase in GGP per capita in the period analysed. The level of activity economic in the province is growing thanks to growth in each of its economic sectors. According to a report prepared by the Argentine Chamber of Trade, the activity with greatest impact in the GGP of Misiones for 2007 was the provision of services –including trade– with a 55.8% share of the total, measured at current prices. It is followed in importance by construction, responsible for 19.6% of the added value of the provincial economy. In third place is manufacturing industry with 15.1%.

Different sector shares in total GGP (2007) Source: Fundación ExportAr based on data from the Provincial Institute of Statistics and Censuses Misiones

Agriculture, livestock, hunting, forestry 5,80%

Mining and quarrying 2,40%

Manufacturing industry 15,12%

Services sector 55,84%

Electricity, gas and water 1,17%

Construction 19,62%

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In the area of service producers, the wholesale, retail and repairs category stands out, with 40.8% of added value generated by these sectors, and 22.8% of the total product of Misiones. In second place is financial intermediation and other financial services, with a 16.1% share. Third and fourth places correspond to transport, storage and communications services, and public administration, defence and obligatory social security, with 8.7% and 3.2% respectively. Meanwhile, education and social and health services represent 2.3% and 1.3% of the total product of Misiones, respectively. GGP growth between 2002 and 2007, distinguished between producers of goods sectors and producers of services sectors, shows that both groups made strong progress. In 2007, the producers of goods sectors generated 73.6% more value than in 2002, to total ARS 2.491 billion at 1993 prices. Featuring strongly in this group was the dynamism of mining and quarrying, which grew 496%, as well as the Construction sector, which expanded 197%. The services sectors grew 62.1% between 2002 and 2007, to reach ARS 2.597 billion at 1993 prices. Standing out in this group was the dynamism shown by financial intermediation and other financial services, and real estate, corporate and rental services, with a rise of 272%.

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Principal production chains

Special report Misiones

Misiones has different production activities, and a brief description of the leading economic sectors in the province follows. The province’s production structure is focused fundamentally on the industrialization of primary products, either in sawmills or through the cellulose paper industry, or the preparation of tobacco, yerba mate and tea.

Forestry exploitation Forestry exploitation is the one of the main primary activities, since forestry wealth is one of the prime resources of the province, both because of the stock it generates as well as the favorable natural conditions of Misiones. The importance of this sector is also connected with the amount of labor occupied in its different stages: nurseries, planting, logging, thinning, industrialization and transportation of timber products. Misiones has the largest forested area in the country, of around 1,838,000 hectares, thanks to the strong attraction for investments due to its favorable natural conditions. Provincial Law 25,080, enacted in 1999, establishes a promotion regime for the investments made in new forestry undertakings. It guarantees fiscal stability for a period of 30 years (which may be extended to 50 years), except in reference to value added tax (abbreviated to IVA in Argentina). Moreover, it refunds the IVA on purchases or the import of goods and services in under a year. In turn, it establishes a non-refundable economic benefit for projects involving less than 500 hectares. Misiones is currently witnessing greater industrialisation of its production and trade in products with greater added value (woodchippings, mouldings and planks), and hopes to increase exports of furniture parts in the future.

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Sawmills

Yerba Mate

Within forestry production, the timber industry is the most important and consists of the mechanical transformation of wood. The activity is mainly located in the north-west of the province in the area known as Alto Paraná (Upper Paraná), in the departments of Libertador General San Martín, Montecarlo, Eldorado and Iguazú.

Misiones is the leading province in the production of yerba mate, with the largest area sown in the country, but in smallholdings. The plantations are widely scattered throughout the province, particularly in the departments of Oberá, San Ignacio, Apóstoles and General Belgrano.

Misiones concentrates a large part of the sawmill industry in the country and in particular the sawing of pine wood. Around 660 establishments are involved in the activity, from microenterprises to large export industries.

With the aim of improving the competitiveness of the sector of primary and industrial products, in 2002 National Law 25,564 created the National Yerba Mate Institute, which seeks to promote, foster and strengthen the development of production, preparation, industrialization, commercialization and consumption of this product, while seeking the sustainability of the various sectors involved in the activity. It also makes it compulsory to have a revenue stamp (inspection and control tax) on all packets of yerba mate for sale to the public. This measure helps legalize the activity.

Cellulose paste and paper Cellulose paste is obtained by the chemical transformation of wood and is used in producing paper and cardboard. Misiones concentrates over half the national production of chemical paste and a portion of that of paper. The production structure of the industry is highly concentrated in three industrial establishments in the departments of Iguazú, Montecarlo and Libertador General San Martín.

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Tea The Province of Misiones has a surface area of around 40,000 hectares turned over to the growing of tea, representing 95% of the area planted in the country. The industrial sector is composed of very few companies that manage most of the market. They generally have their own plantations and have made investments and technological improvements, according to the demands of the international market. The province sells tea in both the domestic and the foreign markets.


Special report Misiones

Tobacco

Tourism

Tobacco production is of great importance in the agricultural activity of the province and reveals certain differences compared to the other tobacco-growing provinces. Its structure of smallholdings means that production is hand-produced. The Burley variety (a light tobacco) is the most important; the Criollo Misionero (dark) and Virginia (blond) varieties of tobacco are produced to a lesser extent. Most of the production goes for export.

Tourism plays a very important role for the province. It is centred on the IguazĂş Falls, the second attraction for foreign tourists in the country after Buenos Aires.

Citrus fruits The province has a strong citrus fruits culture and perfect agro ecological conditions for this kind of crop, which makes the activity one of the best diversification alternatives for agricultural producers. The plantations are in the central and eastern parts of the province, where tobacco growing is being reconverted to citrus fruits, almost exclusively to produce fresh fruit for export. Various varieties of mandarins have recently been planted, with a trend to specialization, while new varieties of oranges and lemons are being cultivated.

The particularly unusual natural and cultural resources, plus the communication and transport infrastructure, road network with a good level of connectivity and two airports, are the factors of strength in the development of this activity. The Strategic Plan for Tourist Development of the province is the principal policy instrument of Misiones. Its aim is to implement a tourist development model based on the principles of sustainability which will promote the balanced progress of the whole province. It specifies products based on the optimum use of resources, thus endowing efforts to competitively position the tourist supply of Misiones both effectively and efficiently.

Citrus producers, companies and cooperatives participate in the Provincial Citrus Growers Council (COPROCITI), a body created by Provincial Law 3539 which analyses, defines and enforces the citrus policy of the province of Misiones.

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Analysis of exports from the Province of Misiones In 2010, our country exported production to all destinations to a value of USD 67 billion. Of that total, Misiones was responsible for 0.8%, making sales to the world for USD 525 million. This figure is 17% up on 2009 figures, when the total value of exports was USD 448 million. The variation in sales abroad by the province in the period 2006-2010 was 25%.

Growth of exports from Misiones 2006-2011 (in USD millions) Source: Fundaci贸n ExportAr based on data from Info-Just

600 500 400 300 200 100 0

2006

2007

2008

2009

2010

2011

(first eight months) FOB dollars

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Special report Misiones

When analyzing the large export headings for the province, it is clear to see the importance of foreign trade in the following products: The cellulose-paper sector with paper, cardboard, and printing work exported goods in 2010 to a value of USD 186 million. Within this heading it is possible to make a disaggregation that clarifies which subheadings are most important. This shows an almost total preponderance of exports of chemical woodpulp that represents 96% of sales in this heading, with values of USD 179.5 million. Secondly, with a 1% share of the total, is paper, cardboard, cellulose wadding and cellulose fibre webbing with exports to a value of USD 2 million. Lastly, mention should also be made of Kraft paper and card with sales abroad for USD 1.7 million (a 0.9% share). Attesting to the evolution of this heading in provincial exports, mention should be made of the fact that there continued to be growth in sales abroad, with a variation during the period (2006 – 2010) of 56%. In second place is the coffee, tea, yerba mate and spices heading, with exports to the value of USD 125 million. The first thing to mention here is that the province of Misiones does not produce coffee, and its production is composed of tea and yerba mate. 71% of sales abroad in this sector were of black tea, with amounts exported close to USD 89.2 million in 2010, with yerba mate in second place with a 27% share. The remaining values were of other types of tea sold abroad by the province. This heading also maintained constant growth during the period with a variation between 2006 and 2010 of 78%, with sales rising from almost USD 67 million to nearly 125 million. The heading other manufactures of agricultural origin made exports to the value of USD 111 million and covers products of the timber sector. 37% of exports were of wood fibreboard or other woody materials, for a total of USD 41.2 million. Besides, 36% of sales abroad are of sawn timber for USD 40 million. In third place, Misiones exports wood planks, for USD 13 million (a 12% share of total exports in this heading). Similar figures also apply to the exports of chipboard. Regarding sales abroad in the period 2006-2010, it should be stressed that the variation is negative, i.e., in 2010 exports were 21% down compared to 2006, falling from USD 140.6 million to 111 million. Due to the strong impact of the 2008 international crisis on the sector, the lowest point was in 2009 with operations for just USD 83.4 million, but followed by a strong recovery of 33% in the next year. In fourth place is raw tobacco with total export values of USD 74 million. Within this sector, 96% of exports are concentrated in totally or partially stripped dry leaf tobacco for a total of USD 70.8 million, while in second place is unstripped tobacco with USD 1.8 million ( 3% of the total in this heading). Concerning sales abroad by the sector, there was firstly a 10% rise between 2006 and 2010. However, growth was not constant, with an exponential increase up to 2009, when the highest sales values (108.6 million) were reached. In 2010, there was a 32% fall in sales of raw tobacco. Lastly, the heading of fresh fruit reports total exports of USD 11 million. Of sales abroad 82% corresponds to mandarins for USD 9 million. Secondly, and with a share of under 9% are exports of lemons and limes; with sales of oranges for a total of USD 763,000 (7%). Lastly, grapefruit exports reached USD 160,000. Here too the balance is positive with 98% growth between 2006 and 2010. Of the abovementioned headings, the first three account for 80% of provincial exports: the cellulose-paper sector covers 36%, coffee, tea, yerba mate and spices 24% and the remaining manufactures of agricultural origin 21%, as can be seen in the graphic: News

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Share of the main headings in exports from Misiones (2010) Source: Fundaci贸n ExportAr based on data from Info-Just

Share of the main headings in exports from Misiones Province (in USD millions) Source: Fundaci贸n ExportAr based on data from Info-Just

Raw tobacco 14%

Fresh fruits 2%

Rest MOA .

Rest

3%

21%

Paper, cardboard, printing and publishing materials 36%

Coffee, tea, yerba mate, spicess

s

24%

200 180

Paper, cardboard and prints

160 140

Coffee, tea, yerba mate and spices

120 100

Other manufactures of agricultural origin Raw tobacco

80 60 40

Fresh fruits

20 0 2006

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2007

2008

2009

2010


Special report Misiones

In the following chart the five leading tariff positions exported by Misiones are disaggregated by amount, share of the total for the province, and percentage variation over the last 5-year period.

Main exports from Misiones 2010-2006 (in USD millions FOB) Product description

1° 4703.21.00 Chemical wood pulp, blea-

2006

2010

Share of the total

Percentage

2010

variation

117

180

34,2%

53%

49

89

17,0%

83%

65

71

13,5%

10%

65

39

7,4%

-41%

42

34

6,5%

-18%

ched or semi-bleached, coniferous 2° 0902.40.00 Black tea, fermented and partially fermented, or aromatized 3° 2401.20.40 Raw dry leaf Burley-type tobacco totally or partially stripped 4° 4407.10.00 Wood sawn or chipped lengthwise, sliced or peeled, coniferous 5° 4411.14.10 Fiberboard not mechanically worked or surface covered

Source: Fundación ExportAr based on data from Info-Just

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This graphic gives export values for the leading tariff positions and their variation between 2006 and 2010.

Evolution in the share of leading products in total exports (in USD millions FOB) 200 180 160 140 120 100 80 60 40 20 0

USD FOB 2006 USD FOB 2010

4703.21.00

0902.40.00

2401.20.40

4407.10.00

4411.14.10

Source: Fundaci贸n ExportAr based on data from Info-Just

4703.21.00: Chemical wood pulp, bleached or semi-bleached, coniferous 0902.40.00: Black tea, fermented and partially fermented, or aromatized 2401.20.40: Raw dry leaf Burley-type tobacco totally or partially stripped 4407.10.00: Wood sawn or chipped lengthwise, sliced or peeled, coniferous 4411.14.10: Fiberboard not mechanically worked or surface covered (the 2006 nomenclature is different, but refers to the same product 4411.21.00) Regarding the participation at country level, the province of Misiones leads exports of coffee, tea, yerba mate and spices, with a 90% share in exports at national level, followed by Buenos Aires with 4.1%. Concerning paper, cardboard, printing work and publications, it comes second to Buenos Aires in sales with a 26.1% market share, while in sales of raw tobacco it is third behind Jujuy and Salta with 25.5%. In other manufactures of agricultural origin the province ranks fourth in exports total in the Argentine Republic, behind Buenos Aires, C贸rdoba and Santa Fe, with a share of 9.3% of sales total abroad. The following chart gives a disaggregated analysis by tariff position, and it is possible to observe the impact of sales by the province of Misiones, nationally, as well as the main destinations.

Export destinations It is also interesting to analyse the destinations with greatest demand for the products of Misiones, where we can observe a greater concentration. In the period 2006-2010 over half the exports were concentrated in three or four countries. In 2006, the United States with a 27.2% share, Brazil with

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Special report Misiones Main exports from Misiones-2010 (FOB dollars) HSN

Rank

Destinations

100%

Brazil (72%); China (16%); South Africa

91.156.086

98%

100.638.432

70%

38.651.207

45.358.368

85%

34.341.660

38.483.665

89%

0903.00.90 Yerba Mate

30.296.586

37.398.176

81%

4409.10.00 Wood

13.156.620

27.564.113

48%

13.086.974

33.838.845

39%

0805.20.00 Clementine mandarins, 9.197.876 wilkings and similar cytrus hybrids

90.530.282

10%

4411.13.10 Fiberboards of thick-

3.859.830

5.141.387

75%

3.718.820

3.796.738

98%

4703.21.00 Chemical wood pulp,

Provincial

National

Impact on

sales

sales

national sales

179.520.749

180.103.216

bleached or semi-bleached, coniferous

(10%); Uruguay (1%); Chile (1%)

0902.40.00 Black tea, fermented and 89.226.752 partially fermented, or aromatized

Germany (4%); Rest(16%)

2401.20.40 Raw dry leaf Burley-type 70.897.120 tobacco totally or partially stripped 4407.10.00 Wood sawn or chipped

Bélgium (45%); Netherlands (12%); USA (8%); Portugal (8%); Rest(27%)

lengthwise, sliced or peeled, coniferous 4411.14.10 Fiberboard not mecha-

USA (67%); Chile (9%);Netherlands (4%);

China (31%); USA (22%); Brazil (9%); Dominican Rep. (7%); Rest (31%)

nically worked or surface covered

Brazil (54%); South Africa (15%); México (12%); Uruguay (3%); Rest(16%) Syria (64%); Chile (12%); Lebanon (4%); Spain (3%); Resto (17%)

continuously shaped 4410.11.29 Particle boards

USA (76%); Costa Rica (8%); Canadá (6%); France (4%); Rest(6%) Colombia (37%); Peru (36%); South Africa (19%); Chile (4%); Rest (4%) (11%); United Kingdom (9%); Rest (22%)

ness not exceeding 5 mm 0903.00.10 Yerba Mate toasted

Russia (37%); Netherlands (21%); Indonesia South Africa (29%); Brazil (22%); Colombia (13%); Mexico (11%); India (5%); Rest (20%) Brazil (90%); Uruguay (10%)

Source: Fundación ExportAr based on data from Info-Just

22.2%, Belgium with 9% and South Africa with 7.6% together accounted for 66% of sales total of Misiones. Five years later, in 2010, about half of the exports from the province were entirely absorbed by Brazil (22.5%) and the United States (19.7%). These two countries together with China (8.4%), Belgium (8.3%), South Africa (5.9%) and Syria (4.4%) were responsible for 76% of foreign sales by Misiones that year..

Leading destinations for exports from Misiones (2010)

Rest 24%

Brazil 32%

Syria 4%

South Africa 6%

Belgium

United States 17%

Source: Fundación ExportAr based on data from Info-Just

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Exporting groups |

Yerba mate:

Highlighting the properties of yerba mate and its benefits for a healthy life

Lebanon, Syria and Latin America already enjoy the mate ceremony thanks to our products. They are now joined by the non-traditional markets of Australia, Lithuania, Russia and Eastern Europe.

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Special report Misiones Six enterprises that wish to do more than simply satisfy strong domestic demand for the product they turn out have formed an exporting group that is striving to conquer international markets. It is the “Yerba Mate and Tea Export Group,” which receives the support of the joint Fundación ExportAr and Standard Bank Foundation Program. “It wasn’t easy to set up the group. In this business there are very special particularities, including a domestic market that offers tremendous competition. Bear in mind that yerba mate is found in 95% of Argentinian households, with annual consumption of 280,000 tonnes per capita, according to statistics available from the National Yerba Mate Institute (INYM),” said Miguel Alan Mayne, group coordinator. The foreign market basically consists of the so-called “nostalgic market” and consumers from the Arab world (Lebanon and Syria). A maximum of approximately 20,000 tonnes of packaged yerba mate are exported each year. These volumes fell as a result of the crisis unleashed in 2008, and even the importing countries varied. “We began to glimpse a new kind of consumer who is more familiar with the properties of yerba mate,” says Mayne.

develop the consumption of yerba mate as an infusion, stressing its properties and benefits for a healthy life,” the coordinator added. This has aroused the interest of a representative in Australia, where it mostly goes in the form of “bags of mate cocido,” and this is geared especially to the local public, where the concept of health is present. A new market to explore is Eastern Europe, where the group is trying to interest a German representative. Contacts have also been made with companies in Russia and Lithuania.

“Right now I’m awaiting a response from representatives to sell in Chile and Bolivia, where there is traditionally strong consumption. Peru, Colombia and Mexico are countries with a certain degree of penetration, although geared to traditional consumption by Argentine, Paraguayan and Uruguayan residents,” Mayne added.

INTEGRANTES DEL GRUPO: EL

“At present, my efforts are geared to creating interest in nontraditional countries without a “nostalgic” market that wish to

GROUP MEMBERS EL DORADO S.A. HREÑUK S.A. ESTABLECIMIENTO SANTA ANA S.A. JUAN ALFREDO IMHOF DEMIROL S.A. YERBATERA MISIONERA S.R.L.

FAIRS, BUSINESS ROUNDS AND SEMINARS IN WHICH THEY TOOK PART World Food Fair, Moscow, 13-16 September. Anuga Fair, 8-12 October. World Food Fair, Ukraine, 25-27 October. Training Seminar: Foreign Trade Club – Business Opportunities with China. Bs. As. 24-09-2011 Training Seminar: Foreign Trade Club – Business Opportunities with Peru. Bs. As. 10-06-2011 Training Seminar: Foreign Trade Club – Business Opportunities with Mexico. Bs. As. 5-10-2011. SIAL MERCOSUR Business Round, Bs. As., 31-08-2011; 01 and 02/09/2011. Company Forum and Business Round Expo Peru; Bs. As. 06/10/2011.

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Interview Entrevista | |Patricio Dra. LíaMac Fabiola Donagh, Bianco Executive Director of APF

Innovation, the key to the development of forestry SMEs The Fundación APF (Forestry Production Agglomeration) was set up to boost the competitiveness of forestry-industrial SMEs. Comprising different institutions from the provinces of Misiones and Corrientes, it fosters the incorporation of new technologies to invigorate the sector. Patricio Mac Donagh, Executive Director of APF for the last 3 years, describes the current situation of the Foundation and the sector, which is thriving thanks to the boom in the domestic market. How was the Fundación APF (Forestry Production Agglomeration) born and how is it made up? What are its objectives?

dy projects to meet those action lines. We had 4 years in which to execute the project in accordance with the amount awarded, starting in November 2008.

The Fundación Aglomerados Productivos Forestal (APF) grew out of a Fontar (Fondo Tecnológico Argentino) project which sought to invigorate what are known as clusters or production agglomerations. The main aim of the Foundation is to improve the competitiveness of the forestry SMEs through the incorporation of technology.

We included different sources of financing such as the Province of Misiones, which channels certain finance lines through us. We’ve also developed joint projects with Fundación ExportAr, the United Nations Development Program (UNDP) and currently with PROSAP (Program of Provincial Agricultural Services), with whom we’re currently developing a cluster project to work on association programs for a year.

How do you support the companies which wish to start exporting? How do you interact with the provincial government in this process? First of all, we identified certain regions of Argentina in which there was a production profile based on a particular crop; where there was agglomeration in primary production and an industrial sector which also participated strongly in exports. Then work began on formalizing the forestry cluster. In 2007, we devised an Improved Competitiveness Plan (ICP) with which we applied to the Fontar and won a grant to work for 3 years on improving competitiveness of forestry SMEs in Misiones and Corrientes. This was to be achieved by incorporating technology, fundamentally in production innovation. With the aim of promoting innovation in forestry SMEs, the loans and subsidies from the Fontar were channeled through our APF foundation which is an institution of technological association that covers the whole production chain, from the primary research stage to the industrial and commercial stages. Given that each agglomeration received a predetermined grant of USD 4 million, financed by the Fontar, we drew up a portfolio of projects for that amount, related with the lines of action established in the ICP to then set up the credit and subsi-

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One of the lines of finance we have from the Government of the Province of Misiones is a refund on exports of manufactured products. The province refunds up to 6% to the forestry SMEs based in Misiones that export highly elaborated products, provided they maintain employment levels.

How is the forestry and timber sector composed in the region and what is its importance for the regional economies? In the case of Misiones, the forestry sector ranks first in importance in GGP (Gross Geographic Product), while in Corrientes it ranks between second and third place. In both instances, it is the industry that employs the largest number of people, and also the one that exports most. In Misiones, there are two large enterprises (cellulose paper) and the rest are SMEs, with around 700 in the forestry sector, while in Corrientes there are some 300, which gives a total universe of 1000 forestry SMEs. The APF Foundation of course works exclusively with SMEs.


Special report Misiones

What impact has the international crisis which began in the United States and subsequently spread to Europe had? The impact has been very great, and almost paralyzed the sector in 2008 and 2009, but fortunately it is now recovering thanks to the boom in domestic consumption. Before the crisis, many SMEs exported remanufactures (prepared and remanufactured timber) but today sales abroad are very low and very few are still exporting. Nevertheless, there has been a reactivation in the sector and the SMEs are concentrated in the domestic market that absorbed the demand. Although the Argentine market does not consume remanufactured material, it does require a certain amount of processed material for construction. This domestic reactivation meant that the drop in demand for labor was not so great.

What actions have you undertaken to identify new markets? Together with Fundación ExportAr we’ve conducted studies in Central America and the Middle East and now we’re starting a project with PROSAP to create an institute of commercial intelligence to develop this type of market prospect studies.

What was your experience of working with Fundación ExportAr as a strategic partner? With the Foundation we made sectorial studies of traditional and non-traditional markets and, in particular, we studied various countries which we saw as new markets to be conquered. The experience was very satisfactory and we’d like to repeat it.

What are the challenges pending? How do you intend to carry them out? The greatest challenge we face is to increase competitiveness by incorporating new knowledge. To do so, in the framework of the project we’re developing with the PROSAP, we updated the ICP that covers a portfolio of 11 projects. Basically, the idea is to boost competitiveness to conquer new export markets since we know that the crisis in the USA and Europe will continue. In this process, Brazil, Uruguay and Chile are our main competitors. There are many things that can be done to be more competitive, which we summarized in a portfolio of 11 projects. One of the most important is logistics; another capacity to explore the possibility of working together to make large packing sheds so as to lower costs and make customs dispatches here in the area. We could investigate new products; look at the possibilities of bioenergy, thus improving the profitability of companies. Although in itself it does not generate an export advantage, it enhances a company’s profitability because it lowers the costs of one of the main inputs, i.e., electricity. In this regard, we think results can be achieved in the space of a year.

What is your assessment after 3 years at the helm? We’ve been growing year by year and have now achieved exponential development. We have more and more projects and ever more money transferred to the sector in technological association or enhanced competitiveness programs.

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Interview | MarĂ­a Martha Oria

Misiones: regional and international trade integration From the Directorate of Trade and Integration of the Province of Misiones, MarĂ­a Martha Oria tells of the work being done to help companies in Misiones in their internationalization process. She also speaks of the Posadas Production Logistics Platform, a medium- and long-term strategic action to foster regional and international trade integration.

How is the Under-secretariat structured? It comprises the Directorate General of Trade and Integration and its subsidiary offices: the Directorate of Foreign Trade and the Directorate of Domestic Trade. In foreign trade, we have the departments of Quality Management and Business Promotion.

What is your main activity? Our main activity is assisting enterprises in the province in their internationalization process. We offer advice on starting out in foreign trade, for instance, in all the paperwork required for enrolment in the import/export register, the specific requirements of each product and training in the different aspects of operations

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in the sector. The intention is to assist companies in all stages of the process from finding the markets that demand our province’s products to the requirements they must satisfy to be able to access each of the international markets, either generally or more specifically.

What do you specifically do to promote the exports of companies from Misiones? Basically, we arrange for companies to attend the specific international fairs for each product, work agendas abroad, trade missions, the provision of market studies and profiles, and a search for alternative markets.


Special report Misiones

With which provincial bodies do you coordinate your work? Our work is always coordinated with the Ministry of Agriculture and Production, the Misiones Development Agency, the National Yerba Mate Institute, municipalities, and obviously the Misiones Economic Confederation.

What are your objectives for next year? To internationalize the provincial enterprises, we specifically intend to intensify our promotion activities in the Russian market for yerba mate and black tea. Based on a project promoted by the Directorate General of Trade and Integration, the international demand for products of the forestry industry (timber and its manufactures) with greater added value will be analysed so as to propose alternative new products to allow greater competitiveness of our exports. We also intend: • To increase, diversify and promote exports to boost the entry of money into the province. The Posadas Production Logistics Platform is a response to the geopolitical challenge, a medium and long-term strategic action and a real development opportunity to reposition Misiones at the heart of MERCOSUR.

What work are you doing to meet that objective? The most commonly used instruments to reach those objectives are: • Inverse business rounds • Trade missions abroad • Participation in fairs and exhibitions • Training: with the holding of sessions that broach different topics related to foreign trade, coordinated with different national and international bodies such as the Export Promotion Project for Argentine Agrifoods (PROARGEX) of the National Ministry of Agriculture, Livestock and Fisheries, the Foreign Ministry, Proargentina, the Ministry of Agriculture, INAES, SEBRAE, CFI.

What joint work do you do with Fundación ExportAr? We engage in different activities such as the preparation of Sectorial Promotion Programs for yerba mate and wood products. We attend international fairs organized and coordinated by the Foundation, invitations are sent out to take part in international business rounds, promotion of services, and other events. Besides, companies in the province request useful trade information.

• To seek new markets for the province’s production by identifying those clients for new products on offer, like the case of stevia rebaudiana (a natural sweetener) that has become a new export alternative. • To promote regional and international trade integration, working actively with the National Government on the MERCOSUR Productive Integration Group to integrate the production of those countries, and make the most of the synergy of each country in the production-export chain. • To incorporate small enterprises in the best possible conditions into the dynamics of foreign trade, especially through training courses on related subjects. As a leading tool in export promotion and development, the Government of the province is setting up the Posadas Production Logistics Platform, a medium- and longterm strategic action to foster regional and international trade integration. News

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Interview | Dra. Lía Fabiola Bianco

“We are seeking consolidation as a logistics platform for all MERCOSUR” Lía Fabiola Bianco, Minister of the Secretariat of State for Mutual Cooperative Action, Trade and Integration of Misiones, spoke of the advantages of the province’s geographical location, at the heart of the Mercosur, and confirmed that it is working to position itself as a logistics association platform for the whole bloc. She also stressed the importance of boosting regional economies, which will benefit from new work in the ports. How do the geographical characteristics of Misiones contribute to its role as an exporting province? What other benefits does its “frontier” position bring? 1 The growing exchange between the Argentine Republic and the Federative Republic of Brazil, and the ever greater share of products from regional economies, poses the need to increase the availability of border crossings in order to speed up cargo traffic. But in the specific case of the Province of Misiones, to this question should be added the complexity of the movement of persons and goods in local and tourist traffic. And with 34 crossing points (almost a third of the country total) it enjoys a very special situation. Our province undertook an important territorial association process with the construction and/or upgrading of the provincial road network, to ensure harmonious development and social equity. Territorial coordination was thus achieved with our sights set on placing the province’s production in the neighbouring countries.

So, Misiones faces the challenge of harmonizing the growing movement of persons with the increase in needs produced by cargo traffic. In this regard, the principal equation to solve in the medium term is to strike a balance between smooth movement and an effective control of these two types of traffic, with sights set on full integration with neighboring countries.

What are the pillars of the province’s social economy? What role do cooperatives play? The social economy is the key sector for growth and employment. It was born as a reaction to social exclusion and has an interaction of horizontal and balanced equity. It is based on sharing as opposed to competing. Cooperatives have been the protagonists of the social and economic development of the population centres of Misiones, thanks to the joint work and effort of immigrants and settlers in the first years of last century.

The geographical location of Misiones, which was once marginal, is today a true geostrategic advantage. Located in the centre of the MERCOSUR and the most productive areas of Brazil and Paraguay, it is hoping to consolidate itself as a platform of logistical association for the whole bloc, while all the works of integration infrastructure help consolidate the corridors that the IIRSA describes for MERCOSUR, a fact which gives a greater significance to any investment made in this direction.

Solidarity, equity, mutual assistance, shared effort, equality and participation are values that this organization promotes to install a model of social participation and economic development.

In terms of the political decision made by Governor Maurice Closs to set integration in all its aspects as a priority topic, the province has made specific investment, with its own resources, to improve the quality of attention and movement at border crossings.

What benefits does the construction work in the ports of Posadas and Santa Ana bring?

1. It has 1391 km of frontier, 900 km with Brazil, and 367 km with Paraguay.

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An example of this is the more than 1000 cooperative organizations operating in Misiones. They distribute 42% of the electrical energy, 60% of the drinking water consumed and generate over a third of the province’s agricultural production.

A very important issue is the development of the regional economies, which with effective logistics and new services are going to be able to compete in markets where they do not today, creating new business. Also, the productive and social development of the


Special report Misiones

region which has a great potential in organic products, fish, tung seed, timber and manufactures, furniture, fresh fruit, and others. As regards the socioeconomic sphere, the logistics sector directly and indirectly influences the economy. Changes in the flow of goods and the continuous development of the different logistics services impinge on investments, which exert a positive induced effect on employment. The construction of these ports will largely contribute to the progress and expansion of the economy of the region. For that reason the interaction with all the sectors related to international trade is very important and the challenge of setting in motion this project is a commitment of everyone.

What are the objectives of the Production Logistics Platform? What strategies are you applying in order to achieve them? The Posadas Production Logistics Platform is structured on the basis of an appropriate use of its great competitive advantages to develop a centre for logistical activities which makes Posadas a multimodal hub for the transfer, production and distribution of cargo, meaning that it can project its services beyond the frontiers of the province.

Port of Posadas-Santa Ana is not restricted to logistical operations or to the cargo transport movements they will generate. We will see complementarity with the future industrial park, highlighting: a) The proximity of both projects to each other allows for an economy and optimum use of investments, such as access, communications, transport of energy, waste treatment and elimination, etc. b) The port will become an access route for raw materials, and exit for manufactured products, which will bring a great reduction in transport costs compared to those possible today, generating a differential advantage over other industrial sites in the NEA (North-East Argentina). c) The location of both projects will also bring greater corporate efficiency, both for those setting up and for service providers such as transport, maintenance, communications, foreign trade and various services for both undertakings, leading to greater effectiveness of the whole. This will create a sphere of high productive competitiveness that will set Misiones apart in the trinational context.

Posadas-Santa Ana, the first link in the new Provincial Port System, is an excellently placed reference point. With a privileged position on the banks of the River Paranรก, adjacent to the future 100-hectare industrial park, with an area of support logistics near Posadas international airport, and with accesses and entry points to a section of the urban by-pass, which clearly separate urban traffic from cargo transport, it guarantees smooth operations and efficiency in transfers to the point where national highway no. 12 and the River Paranรก meet. The historic opportunity facing the Province of Misiones with the

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Activities Fairs Rounds Promotion of Services Training

Fairs 24th Performance Racing Industry Trade Show 2011 Orlando, United States December 1-3 Motor racing

Performance Racing Industry Trade Show is the most important fair of the motor racing industry, which will take place in the Orange County Convention Center (OCCC), in Orlando. It is organized by Performance Racing Industry, monthly magazine considered worldwide as “the voice of the car racing market”, who thousand of businessmen from the sector have discovered as an indispensable source of information about the last trends, marketing concepts, business strategies and new technologies of the racing world. Over 40,000 people linked to the sector, coming from more than 67 countries, come to Orlando ready to do business in an environment prepared to facilitate contacts and commercialization. PRI is the axis around which this huge market is organized and the “entrance to the world market of car racing”.

In this section, we describe the activities done by the Fundación and those scheduled for November and December.

The US is a country with great amount of circuits for motor racing, in which teams and thousands of racing drivers of all categories participate. The motor racing industry exceeds sales every year because the number of aficionados and cars also increase. Therefore, during three days, the Fair gathered the professionals of the sector in an environment where pilots, salesmen, wholesalers and manufacturers were able to come in contact with distributors and plan their purchases for the racing season. The PRI has an additional activity program that offers seminars and conferences by distinguished exports, about topics of interest for engine builders and racing car manufacturers, pilots with their teams and professionals of the sector. This is the sixth consecutive opportunity in which Fundación ExportAr organizes the presence of Argentine companies together with the Province of Santa Fe in a National Pavilion. In the previous Edition, companies generated 150 contacts and closed transactions during the event for USD 11,000 and expected sales for USD 250,000.

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Fairs Fieracavalli 2011 Verona, Italy November 3-6 Horses and related industries

16a L ́Artigiano In Fiera 2011 Milan, Italy December 3-11 Handicrafts

The 113rd Edition of the most important European fair related to the equestrian world Fieracavalli, took place in Verona. The Fair took all the fairground space, where different activities were carried out, such as the Salto world cup, the Arab, Spanish and Latin American horse hall, and the Western hall.

The 16th Edition of L’Artigiano in fiera will take place in the ferial ground of the city of Milan, Fieramilano RhoPero. The event will occur at the same time as EcoNavigare (Nautical craft hall) and EcoAbitare (Furniture and Decoration for the Home and Selfsustaining Garden).

In pavilions 6 and 10, a commercial exhibition took place with the main brands of the equestrian sector. Over 600 exhibitors coming from different countries participated. They offered a wide range of products, including clothing, horse-riding accessories, technical equipment, vet products and food for animals, leather and saddler goods.

Ge.Fi is the organizing company and has the structure and service of a great International Fair with a strategic location that allows expansion of users as well as national and international audience.

The objective of the Argentine presence was to reinforce business bonds created in the two previous participations and contact new importers and distributors, not only from the Italian market, but also from nearby markets that also go to this business exhibition. The Argentine Pavilion of 72 m2 was located very close to the track where many skill and morphology tests with horses were done. The stand attracted the attention of the audience due to its allegorical graphics, besides having flat televisions showing images of our country and of horses uninterruptedly. It is worth pointing out that Argentine’s Pavilion was the only institutional one in the business sector. Likewise, the Institute for Touristic Promotion (INPROTUR) participated with a stand within the Institutional Pavilion, promoting Argentina as a natural touristic destination.

The exhibited products include: objects and gift articles, clothing and accessories, furniture and decoration articles, silver articles and jewelry, food and wine products and typical products. In this Fair, we found the international manifestation dedicated to tradition and handcraft culture of all countries of the world: typical products, musical events, dances, colors and flavors that make up the history of the world and of the peoples. For institutions, participating in this Fair means the opportunity to promote their own country through the main resource: handcraft, art, culture, gastronomy and tourism. They activate new business relationships that continue throughout the year and open to new international markets. They learn about new innovating solutions for their own business activity faced with other exhibited realities. Fundación ExportAr organizes a National Pavilion for the second time in a row in this Fair. The previous edition had 2,900 exhibitors, 109 countries from 5 continents, 44 typical restaurants and 6 tasting areas, 150,000 m2 and over 3 million visitors.

Participating companies expressed they met the objectives they had before going to the event.

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Ferias Kosherfest 2011 New Jersey, US November 8-9 Kosher foods and beverages

The 24th Edition of the most important fair oriented to the market of kosher certified foods and beverages took place in the Meadowlands Convention & Exposition Center. According to the figures provided by organizers, in the 2010 edition, the event had more than 350 exhibitors representing 19 countries. In this opportunity, PROARGEX, together with the Ministry of Foreign Affairs, International Trade and Worship, through Fundaci贸n ExportAr, participated with a stand of 90m2, where 13 companies exhibited: Kosher Wine Club, Kosher Winery Argentina and Marumatok S.A. with wines; Cuna de Olivares, Agricultores Federados Argentinos, PRomas, Olivi Hermanos and PyP Emprendimientos with olive oils, Yanovsky Hnos with cereals and crackers, Tapamar S.A. with dough for empanadas, Cachamai S.A. with infusions, Milk & Cheese with cookies and chocolates and Magnasco Hnos with cheese. During the two days of the event, tasting of all the abovementioned products took place. The General Consul of Argentina in New York, Ambassador Jos茅 Luis Gabilondo was present at the stand on November 9th. Businessmen said that they were able to generate contacts with significant business opportunities during this edition. It is important to mention that Argentina was the only institutional stand of the Fair, in which national companies exhibited, while the rest were companies that were participating individually. Attendees said that the participation in the Fair and the connections generated let them encourage business expectations for an approximate amount of USD 1,100,000 for next year.

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Special Report Misiones

Newsletter Fundación ExportAr

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November 2011

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