Peru, strategic partner in South America

Strategic Partner in South America

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Key indicators 2014 GDP(2015)

Population

31 millions

3.8%

Minimum wage

Inflation

US$ 236*

3.2%

Free trade agreements Agreements in force

Agreements to enter in force

Agreements under negotiation

*US$1 = S/.3.18 nuevos soles Source ; Euromonitor

多Why invest in Peru?

1. Internationally recognized macroeconomic soundness

2. Friendly investment environment 3. Open trade and market access policy 4. Attractive sectors to Invest

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Peru is one of the most dynamic economies in the world 2014

2015

2016

7,5

% GDP change

6,8

3,8

3,4

3,1

3,0

2,7 1,0

India

China

Peru

Colombia

United States

Mexico

Chile

Japan

Brazil

Russia

-1,0

-3,8 Source: IMF, World Economic Outlook Database, April 2015

The economy is expected to grow in the next years 8,5

6,5 6,0

5,8

5,5

% GDP change

5,0

4,8

4,5

4,5

2019

2020

3,8 2,4

2010

2011

2012

2013

2014

Source: IMF, World Economic Outlook Database, April 2015

2015

2016

2017

2018

Peru: GDP per capita Year

GDP -per capita (US$)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

6,295 6,800 7,422 8,099 8,875 8,899 9,620 10,292 10,931 11,556 11,817 12,187 12,788

+155% 11.556

11.817

2013

2014

10.931 10.292 9.620 8.875

8.899

2008

2009

8.099 6.295

2004

6.800

2005

2007

2010

2011

Source: IMF, World Economic Outlook Database, April 2015

• GDP per capita has increased 88% in the last 10 years.

2012

Peru offers a favorable legal framework for foreign investment Non discriminatory treatment Unrestrictive access to most economic sectors *

Free transfer of capital and free competition Guarantee for Private Property.

Freedom to purchase stocks from locals.

Network of investments agreements and member of ICSID and MIGA Peru participates in the Investment Committee of the OECD

Fuente: Proinversi贸n

*Investments that require authorization: Located within 50 km in the frontier line and those destined to arms, ammunitions and explosive. Likewise, a principal local partner for investments in maritime cabotage as well as in air transport is required.

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Peru is at the N°35 position out of 189 countries in the Doing Business 2015 Ranking Perú

Chile

Colombia

México

Brasil

Doing Business

35

41

34

39

120

Starting a Business

89

59

84

67

167

Dealing with construction permits

87

62

61

108

174

Registering Property

26

45

42

110

138

Getting credit

12

71

2

12

89

Trading across borders

55

40

93

44

123

Protecting investors

40

56

10

62

35

Source: Doing Business 2014, World Bank. Analysis of 189 countries

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The Peruvian export success creates a dynamic effect on the rest of the national economy (2013)

U.S.$ 1 370 Exports per capita

4 642 Products exported

U.S. $ 2 730 to 2016

5 000 to 2016

8 227

US$ 11 630 M

Exporters

Non-Traditional Exports

Source: SUNAT

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Working to become a globalized economy, with preferential access to the world’s largest markets

Canada China

United States

European Union South Korea

Turkey

Thailand

95% of Peruvian exports with trade preferences (US$ 40 000 millions)

Japan

Costa Rica Mexico El Salvador

Guatemala Honduras

Singapur Panama

Agreements to enter in force Agreements under negotiation Agreements in force Source: MINCETUR

Cuba

Chile

Venezuela

PERU : SWOT ANALYSIS •

Strengths

•

•

Weaknesses

•

•

Opportunities

•

•

Threats

•

Source: Euromonitor International

Peru’s real GDP growth over 2009-2014 has been amongst the highest in Latin America.

Favorable business climate with open policies towards trade and foreign direct investment (FDI) Elevated levels of poverty and income inequality generate social tensions Peru’s external sector is highly reliant on commodity exports, increasing the vulnerability to external shocks Sound fiscal policy helps to provide foundation for long-term economic growth Improved stability of the financial sector has contributed to robust expansion of credit As a net energy importer, Peru would be negatively affected by increases in global process of crude oil Strong growth in real estate prices continues to generate concerns over a property bubble

Textile and Apparel

Why source from Peru?

ďƒź Textile Tradition The first traces of civilization in Peruvian territory date from five thousand years ago.

Archeological excavations not only have uncovered temples and palaces but also garments that in their time dressed up rulers, priests, warriors and commoners. What is striking about these pieces is their manufacturing quality, thus reflecting that ancient Peruvians paid special attention to what they wore.

Cotton and alpaca wool were the main inputs of an activity that was practiced by artisans whose knowledge and techniques were transmitted along generations.

 Luxury Fibers PERUVIAN COTTON, Cotton knitted garments are the main Peru’s specialization. Pima cotton is ideal to create and develop comfortable, colorful and modern garments. Its softness is due to its length and finesse; therefore it gives shine and freshness to the fabrics. Tangüis cotton has great absorption of dyes which is a perfect attribute for printing.

World’s leading brands have already ordered to Peruvian companies to produce their collections, especially the ones oriented to the urban and youth segment, which is the most demanding in regard to trends.

Specialized segments as the children’s have also been conquered.

ALPACA, considered the “Gods’ fiber” for its exceptional quality, is synonymous of exclusiveness and elegance since pre-Columbian times.

Different cultures, including the Inca culture achieved to domesticate this South American camelid and turned its fur in raw material for the manufacture of garments.

Nowadays, alpaca is highly appreciated in the fashion world for its incomparable softness, flexibility in dyeing and design versatility.

80% of the Alpaca world production is concentrated in Peru and competes in the international market with fibers as refined as cashmere and mohair.

 Creativity and Design From traditional to vanguard. Such a process would seem complex at first glance but it turns out to be simple in the hands of Peruvian artists. That’s because talent encourages inspiration and young designers are basing their work in the wide array of traditional styles in order to transform them in modern and original creations. And the sources of said inspiration are countless. They come from the coast, the Andean region and also the Amazon, where the stand out is kené, which is more than a style for it is the way that the shipibo-conibo people understand their world.

The young Peruvian garment makers are combining the widespread techniques with the new ones, but what makes them unique and competitive is their ability to create collections based in the country’s cultural wealth. Having those attributes, there is no limit for their imagination.

ďƒź Social Responsability/ Fair Trade

The majority of our companies have established social programs in order to support the well-being not only of their workers but also of the communities around.

ďƒź FTA EU and Peru

Since march 2013, EU and Peru have a Free Trade Agreement in force that allows Peru to enter to EU market with duty free access.

ďƒź Full Package Service

Ginning Dyeing Printing

Spinning Cutting Laundry

Yarn dyeing Sewing Finishing

Knitting Embroidery

ďƒź Certifications Most of the Peruvian companies are internationally certified as a requirement of the market. These certifications prove the commitment of the companies with their product quality, environment, workers, etc

Peru sources to top global brands

Some numbers‌

Peruvian apparel Industry Peruvian apparel exports (Millions of US dollars)

Peruvian apparel sector: Main export markets (Share %)

US$ Millones / (US$ millions)

2014

Otros / Other markets; 10,5

1.185

2013

1.368

2012

1.603

2011

1.509

2010

1.173

2009

1.155

Germany, 3,2 Colombia; 2,9

2008

1.627

2007

1.393

2006

Brasil / Brazil; 7,2

1.050

2004

863

2003

2001

EE.UU / USA; 52,7

Chile; 2,9

1.185

2005

2002

Ecuador; 2,5

648 526 495

Venezuela; 12,9

Peruvian apparel Industry - Cotton Peruvian apparel made of cotton: Main export markets (Share %)

Peruvian exports of apparel made of cotton (Millions of US dollars)

MĂŠxico / Mexico; 1,7

2014

Italia / Italy; 1,6

894

Argentina; 2,2

Otros / Others markets; 9,1

Colombia; 2,7

2013

958 Ecuador; 2,7

1224

2012

Chile; 2,1 Alemania / Germany; 3,6 EE.UU / USA; 56,3

1227

2011

Brasil / Brazil; 9,3

2010

994

2009

990

Venezuela; 8,7

Peruvian apparel Industry – Fine Fiber/Alpaca Peruvian apparel made of Alpaca: Main export markets (Share %)

Peruvian exports of apparel made of Alpaca (Millions of US dollars)

Others; 10% Canada; 2%

46

2014

Switzerland; 2% Chile; 3%

Italy; 3%

37

2013

Australia; 3%

37

2012

United States; 48%

France; 6%

40

2011

UK; 6%

33

2010

Japan; 8% 2009

28

Germany; 10%

Leading Products Apparel Industry • Garments made of cotton:  T-Shirts (US$ 363 millions)  Shirts for men (US$ 203 millions)

 Sweaters (US$ 70 millions)  Shirts & blouses (US$ 42 millions)  Men’s Underwear (US$ 16 millions)

 Babies’ garments and clothing's accessories (US$ 32 millions)  Sweaters made of fine hair (Alpaca) (US$ 18 millions)

The leading exporter of knitted garments in South America

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