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PROMOTION // ECONOMIC DEVELOPMENT
CHILE
NATURAL AND AGRICULTURAL RESOURCES FUEL ECONOMIC GROWTH
or three decades, Chile has set the economic pace
in Latin America. Liberal market reforms, which
began in the 1980s, have made Chile one of the
world’s freest economies, while strong demand for
the country’s copper, mined in the Atacama Desert by stateowned CODELCO, has fueled consistent economic growth.
Last year, Chile’s GDP expanded by 5.9%, according to
International Monetary Fund data.
The Chilean government says it has more free trade agreements in place than any other country, was the first South
American nation to become a member of the Organisation for
Economic Co-operation and Development (OECD), and boasts
the highest GDP per capita as well as the lowest inflation rate
on the continent. While the country has become a destination
for foreign investment, attracting $13.7 billion in 2011, challenges to sustaining its prosperity remain.
Chile occupies a 2,700-mile-long mountainous strip between
the Andes and the Pacific averaging 100 miles wide, and is home
F
BANCO PENTA: A Leader
in Investment Banking
to 17.4 million people. Only about 6.5% of the active population
is currently unemployed, which is good news for the workforce,
but a concern for many companies now facing a labor shortage.
While Chile retains many minerals and metals, it still imports
75% of the fossil fuels required to meet its energy demands.
To date, its liquefied natural gas projects offer limited supply at high prices, and environmental protests are curtailing
plans to expand hydroelectric generation on Patagonian rivers, which provide 40% of the country’s power.
One industry with unlimited potential for future growth is rooted
in Chile’s past. Agriculture has been an economic bedrock for
centuries, and today it employs 15% of the workforce and contributes 5% to the GDP. The fertile Central Zone grows some of
South America’s finest grapes, while farther south, fields, forests
and fisheries export wheat, fruit, cattle, timber and salmon.
In addition, innovative companies and organizations in
the wine, wood and dairy products sectors are concentrating on developing premium brands, adding value at home
Banco Penta is the investment branch of
financial services company Grupo Penta.
With 27 years of experience, Grupo Penta
is one of the largest diversified conglomerates in Chile, managing $38 billion in assets.
Banco Penta offers comprehensive investment banking services to private banking,
institutional and corporate clients. Services
include asset management, capital markets,
corporate finance and lending.
The asset management group manages
more than $3 billion in assets from institutional and private banking clients, offering
multiple strategies and products across all
asset classes. Managed products include
money market, equities, fixed-income securities, high-yield offerings, hedge funds,
real estate and structured products. The
capital markets group focuses on equities,
fixed-income and foreign exchange, and
provides execution in both cash and derivative markets. Banco Penta also offers
alternative investment products to enable
clients to effectively address their operational, investment and risk management
objectives through customized structured
product offerings. The corporate finance
group is comprised of a seasoned team
of bankers who provide companies with
advisory and placement services through
mergers and acquisitions, debt capital markets and equity financing. Earlier this year,
Banco Penta played an advisory role in the
$4 billion merger of Coca-Cola Polar and
Embotelladora Andina, two prominent beverage and bottling companies, as well as the
IPO of Hortifrut S.A., the second-largest supplier of berries in the world.
PROMOTION
while simultaneously increasing market share abroad.
WINE, DAIRY PRODUCTS AMONG CHILE’S
AGRICULTURAL SUCCESSES
Stretching north from the Tropic of
Capricorn to less than 1,000 miles from
the Antarctic Circle, Chile’s geography
comprises high plateaus, verdant valleys, volcanic rain forests and glacial
fjords. Naturally protected by mountains, deserts and the Pacific Ocean, the
country is fortunately free of agricultural
scourges, such as mad cow disease,
fruit flies and phylloxera.
Chile’s blossoming winemaking industry has benefited not just from healthy
vines, but also from a robust demand for
its distinctive Cabernet Sauvignon and
Merlot. Ranked ninth globally in terms of
production, and fifth in exports, Chilean
red and white wines regularly win international competitions and are popular
with consumers around the world.
Another homegrown organization that
brings together producers and exports a
range of products is COLUN (Cooperativa
Agrícola y Lechera de La Unión Ltda),
the largest nationally owned milk derivative company in Chile. Marketed under
the COLUN brand at home, its butter,
cheese, milk and yogurt reach overseas
markets like the United States, mostly as
unbranded products.
In August, COLUN unveiled plans for a
new $65 million plant with the capacity
to process 500 tons of milk daily. The
cooperative already has a presence in
countries including Algeria and Japan,
according to Augusto Grob, COLUN’s
president, and wants to expand into
new markets in South America and the
Middle East, where there’s a growing
demand for quality dairy products.
“Emerging countries require more
sophisticated products,” Grob says. “We
have very high sanitary standards and
can improve a natural product. We are
developing probiotic yogurts and low-fat
and high-protein products, among others. We want to export the best of Chile
and sell to countries where it is impossible to reach such standards.” Y
MASISA: Sustainability
Standards for the Future
Much of the credit goes to Wines of
Chile, an organization that unites more
than 90 wineries. With overseas offices
in New York and London, and representatives in Canada, Brazil, Europe and
Asia, Wines of Chile member wineries
represent 90% of the country’s bottled
wine exports.
Wines of Chile aims to make the nation
the leading producer of sustainable,
diverse and premium New World wines
by 2020, working closely with ProChile,
which promotes Chilean products overseas. The goal is to reach $3 billion in
exports through strengthened brand
positioning and wider recognition.
According to Claudio Cilveti, the president of Wines of Chile, the country’s
economic stability, diverse product offerings—including staples like Sauvignon
Blanc and its specialty Carmenere
grapes—and commitment to sustainability will help attract new investment and
make Chilean wines, as the organization’s
slogan says, “the natural choice.”
For over 50 years, Masisa has been
a Latin American leader in the wood
board business. With 12 factories,
350 Placacentro stores and more
than 220,000 acres of forests, it supplies furniture manufacturers and
interior architects with many highquality wood products.
Sustainability is one element in
Masisa’s success: “It is our inspiration and should be the standard for
the future,” says CEO Roberto Salas
Guzman. Another is innovation, as the
company is usually first to market new
designs and technologies. In 2011,
the World Economic Forum named
Masisa a “new sustainability champion” among emerging markets.
“Masisa is different, due to its connection with the client,” Guzman says. “We
are the only company to have an integrated strategy, not only in forests, but
through stores. We have over 60,000
clients, and we continue to create a
community of small and medium-sized
carpentry businesses. We have over
10,000 affiliates, who have direct relationships with the company.”