Download Business in Brief - Nederlandse Ambassade in Santiago

BUSINESS IN BRIEF
| Issue 1, 2013
1
Business
in Brief
Chile
September 2013
Embassy of the Kingdom of the Netherlands, Santiago de Chile
Issue 1, 2013
New Ambassador of the
Netherlands to Chile
On August 22nd, Mrs. Marion Kappeyne van
de Coppello presented her letters of
Credentials to the President of the Republic of
Chile, Sebastián Piñera at La Moneda Palace.
Embassy of the
Kingdom of the
Netherlands,
Santiago de Chile
Among other relevant positions, Marion
Kappeyne van de Coppello was former
Ambassador to Colombia, Advisor to the
Ministry of General Affairs of Aruba and
Director of the General Direction for the
Western Hemisphere (the Americas) of the
Ministry of Foreign Affairs in the Netherlands.
Lecture about Coastal Defense
Design
30 September – 3 October
Boqhoi;hbv;oihbtihbhi
Hotel Plaza San Francisco
Jentsje van der Meer is a world known expert in
the evaluation, design and testing of offshore
structures.
This activity is organized by the Universidad
Católica de Valparaíso, Sociedad Chilena de
Ingeniería Hidráulica and GHD S.A. The event
has the support of the Embassy of the
Netherlands.
For more information:
www.defensascosteras2013.com
Follow the Embassy on
Facebook:
https://www.facebook.
com/EmbajadaHolanda
Chile
BUSINESS IN BRIEF
| Issue 1, 2013
2
Economic development
Chile GDP growth slows to 4.1% in second quarter
In the second quarter of 2013, Chilean
economy expanded 4.1% over the previous
year, the slowest expansion in seven quarters,
according to the Central Bank. The growth
rate for 2013 now stands at 4.3%. The
recovery in manufacturing and agriculture
was not enough to offset a contraction in
fishing, restaurants and hotels’ activities.
Mining growth eased to 4.5%, from 7.8% in
the previous quarter, mainly due to a
slowdown in copper production (4.7% from
8.6%). Retail sales growth averaged an annual
10.6% in the second quarter. Overall, both
exports and imports saw growth of
respectively 7.2% and 8.4%. On the
expenditure side, while private consumption
growth eased to 4.5% from 7.2% in the
previous quarter, government consumption
increased 3.6%, from 1.9% in the first quarter.
The current account deficit was 2.4% of GDP
in the second quarter.
The Central Bank has held its policy rate at 5%
since January 2012. The EIU expect that a
modest easing cycle will begin in the next
several months to bring it to 4.5% by year’s
end. The EIU believes Chile’s GDP growth will
average 4.9% annually in 2014-17.
Sources: The Economist Intelligence Unit
(EIU), Bloomberg, The Santiago Times
IMF cuts Chile 2013 growth
forecast to 4.6%
According to the International Monetary
Fund, growth in Chile's economy will slow to
4.6% this year due to softer copper prices,
investment and domestic demand. The IMF
projected that the economy of the country
would expand by 4.9% in 2013.
The economy grew 5.6% last year, but growth
eased in the first quarter of 2013 to 4.1%,
compared with a year earlier, its slowest pace
of expansion since late 2011.
First-half foreign investment through D.L. 600
marks ten-year record
In the first half of this year, foreign direct
investment (FDI) in Chile through the D.L. 600
Foreign Investment Statute reached US$3,611
million, according to figures released by the
Chilean Foreign Investment Committee. This
represented an increase of 64% on the same
period last year and was the highest figure for
the first half in the last ten years. The mining
sector accounted for 53% of the inflow
(US$1,915 million), followed by services with
38.8% (US$1,401 million), transport and
communications with 3.8% (US$137 million),
manufacturing with 1.6% (US$56 million),
forestry with 1.4% (US$48 million), the
electricity, gas and water industries with 1.3%
(US$45 million) and agriculture with 0.2%
(US$6 million). In terms of country of origin,
the inflow was led by the United States which
accounted for 39.4% (US$1,424 million) and
Japan with 28.5% (US$1,029 million) while the
remainder corresponded to a total of 13
countries.
Total foreign investment, on the other hand,
declined from its record level in 2012 and, at
US$6,815 million in the first six months,
represented a drop of 46.5% on the same
period last year.
Source: Foreign Investment Committee
Chile's Central Bank anticipates the economy
will expand between 4% and 4,5% this year, a
half percentage point below its prior
projection, according to the bank's quarterly
Monetary Policy Report.
Source: Reuters
Chile, the world’s eleventh
largest recipient of foreign
investment in 2012
According to the World Investment Report
2013 released by the UN Conference on Trade
and Development (UNCTAD), Chile was the
world’s 11th largest recipient of foreign direct
investment (FDI) in 2012. With a record in flow
of US$30,323 million, Chile was among the
top 20th recipients for the second consecutive
year, rising from 17th place in 2011 to 11th
place in 2012.
Source: ProChile / Foreign Investment
Committee
BUSINESS IN BRIEF
| Issue 1, 2013
3
Agri/food
Chilean horticultural delegation to Holland
November 2013
In the first week of November, eight Chilean
members of the Horticulture Nursery
Association will visit Holland for a complete
week. Two other participants will join the
delegation on behalf of the Chilean
Agriculture Ministry. The week includes visits
to a number of horticultural producers,
researchers and developers of new
technologies, a visit to FloraHolland the
largest flower auction in the world, and the
International Horticultural Trade Fair (IHTF).
The mission is organized by the Department
of Agriculture of the Dutch Ministry of
Economic Affairs in coordination with the
Agricultural counselor responsible for Chile.
The mission aims to get acquainted with
knowledge and technology available in the
Dutch horticulture sector and to meet
potential suppliers from the Netherlands.
Most of the participating companies are very
much interested to know more in the
following subjects: nursery production and
management, new crops available,
greenhouse automation process and
equipment, plants movements, streamline
logistic operations, grafting new methods,
alternative substrates and labor costs
reduction.
For more information: [email protected]
Mixed export results in Chilean fruit season
Chilean Agricultural Minister Luis Mayol
headed an official reception to close the
country’s key fruit exporting season
highlighting signs of progress despite some
difficulties.
Fruit exports in volumes according to the
Minister amounted to 2,5 million tons
(2013/2012) with a decrease of -0,21% in
comparison to last year. The main destination
market for fruits was USA (32,7 %), Europe
(26,7%), Latin-America (18,3%), Asia (15,2%),
and Middle East(4,7%). Some of the largest
fruit exported were grapes (32,9%), apples
(29,7%), kiwis (8,4%), pairs (5,2%), avocados
(4,5%) and prunes (4,5%).
The high international prices for the industry
within the last two years and a significant
depreciation of the Chilean peso
strengthening agriculture exports were
mentioned by the Minister as significant
elements influencing a favorable fruit season.
On the other hand, the port strikes taking
place in March and April this year were very
negative because of the damage produced
particularly in the port of San Antonio. Grape
exporters were the most hurt with losses
reaching over US$48 million.
Unfavorable weather conditions affected also
negatively a part of the fruit season.
The lack of manpower is still a matter of
concern for the agriculture business people.
A solution to this problem according to the
minister is the bill that the government sent
to Congress two years ago to improve labor
conditions for agriculture workers. Another
important bill for agriculture entrepreneurs
which was sent to Congress two months ago
is discussing the issue of hiring seasonal
foreign workers and certain processes that
the employers would need to undertake to
hire them.
Fruittrade 2013
October, 8-9
Espacio Riesco,
Santiago de Chile
For the eleventh
subsequent year,
Export Promotion
Bureau- ProChile
(which reports to the
Ministry of Foreign
Affairs), with Fruit
Growers Federation
of Chile FEDEFRUTA, are
promoting the Chile
Export Fruit and
Vegetables
International
Business Round
Table FRUITTRADE, an
excellent chance to
make direct contact
with more than 200
fruit and vegetables
producers/exporters
from Chile.
www.fruittrade.cl
Source: El Mercurio
Follow the
Agricultural Counsil
on Twitter:
https://twitter.com/
bartvrolijk
BUSINESS IN BRIEF
| Issue 1, 2013
4
Energy, water and raw materials
BHP and Rio Tinto investing in US$3.4 billion Chile
water project
BHP Billiton Ltd. (BHP) and Rio Tinto Group,
the two largest mining companies, will invest
in a US$3.43 billion desalination plant that will
supply water to Chile's Escondida copper
mine. The project includes two pipelines, four
high-pressure pumps and a reservoir at the
mine site and is scheduled to be finished in
2017. The contract was signed with the
company Doosan Heavy Industries &
Construction Co., a South Korea maker of
power equipment.
The Escondida mine produced 1.1 million tons
of copper in 2012, almost one fifth of Chile's
total output.
The plant will increase water supply to the
mine by 50%, allowing production to run at
more than 1.3 million tons of copper annually.
A desalination process will, depending on the
elevation of the mine, double the unit cost of
production. But with copper prices hovering
around US$3 a pound companies see these
projects as a worthwhile investment.
According to some estimates, demand for
desalination projects is set to increase 400%
over the next 4-5 years. Globally, the water
needed for mining represents a US$7.7 billion
market.
Sources: Bloomberg / The Santiago Times
Atacama Pacific to buy water
for gold project from Chañar
Atacama Pacific Gold Corp., a Toronto-based
gold explorer operating in Chile, agreed to
buy 2.5 million cubic meters a year of treated
industrial water from the Aguas Chañar
company utility for use at its Cerro Maricunga
project. Atacama Pacific agreed to pay
US$574,000 a year, or the equivalent of 22.5
cents per cubic meter, before the project
starts and 75 cents a cubic meter when it goes
online. The contract is for 13 years of water
from Chañar's plant in Copiapo, Chile, and can
be renewed for another five years.
Source: Bloomberg
Codelco Andina to become the world’s largest open-pit mine
State-owned mining giant Codelco recently
revealed its latest megaproject, involving the
nearly four-square-mile extension of its
Andina project that will convert it into the
biggest open-pit mine in the world. Located in
Los Andes in the Valparaíso Region, the mine
opened in 1970, combining both surface and
underground projects. This will be the second
major expansion to the mine in recent years,
after a US$1 billion investment in 2010. The
Andina project will cost Codelco US$6.8
billion and is expected to nearly triple the
mine’s output by 2021.
The life of the mine will also be extended 49
years, until 2085.
Nearby residents have, however, questioned
the effects it might have on glaciers, water
sources and a nearby nature sanctuary.
Environmental impact studies on the two
projects’ impact on water supplies are
ongoing.
Source: The Santiago Times
BUSINESS IN BRIEF
| Issue 1, 2013
5
Solar projects could see big growth in Chile
Chile has been at the center of more than
US$450 million in mergers and acquisitions in
the renewable energy sector over the last
year, according to the Green Energy 2013
report from the organization Green Power
Conferences. The report indicates that Chile
stands out as one of the emerging Latin
American markets attracting major investors.
The market seems particularly attractive to
solar developers and investors. First Solar, for
example, announced at the end of 2012 that
it plans to build 1.5 gigawatts of solar
capacity in Chile by 2020. The massive solar
installations will power mining operations in
the northern part of the country. Solar is cost
competitive even without recently developed
government incentives in that remote region.
According to the report, mining companies
will pay an average of US$100 per megawatt /
hour for solar electricity. The companies are
currently paying US$350 per megawatt hour
and even more.
Green Power Conferences is hosting a solar
conference in Chile in September 2013.
More information:
http://www.greenpowerconferences.com/
home/
Solarpack gets USD$66.4
million for three Chile
solar-energy plants
Etrion to supply solar
power to Atacama iodine
mine in Chile
Inca de Varas seeks permits
for $100 million solar project
Solarpack Corp. Tecnologica, the Spanish
solar-energy developer, will receive $66.4
million in loans for three projects in Chile’s
northern desert. The financing comprises
$41.4 million from the Inter-American
Development Bank that was approved in
March and a $25 million senior loan from
France’s Proparco, Getxo, according to a
statement from Spain-based Solarpack.
Proparco is the private investment unit of the
French Development Agency. The Pozo
Almonte 2 and Pozo Almonte 3 plants will
have total capacity of 25.4 megawatts and are
expected to begin producing power in
October, the Inter-American development
Bank said yesterday on its website. The 1.1megawatt Calama Solar 3 project went into
operation in April 2012.
Etrion Corp., a Geneva-based renewableenergy producer, agreed to supply solar
power to an iodine mine in northern Chile
operated by Atacama Minerals Chile SCM.
Etrion will build and operate a solar farm with
as much as 8.8 megawatts of capacity,
enough to power 35% of the Aguas Blancas
mine, according to a statement from the
company. The plant is expected to begin
producing power in the second quarter of
2014 and will cost an estimated $25 million.
Inca de Varas I, the Chilean renewable-energy
developer, filed an environmental request for
the construction of a 50-MW PV solar power
plant in Chile’s northern Atacama desert.
According to the environmental declaration
submitted to the country's environmental
regulator SEA, apart from the plant, the USD
$100 million project includes also a power
substation and a high-tension transmission
line. They will be connected to the Carrera
Pinto substation of Chilean power grid
operator Transelec.
Source: Bloomberg
Source: Clean Energy Authority
Sources: Bloomberg / SeeNews
BUSINESS IN BRIEF
| Issue 1, 2013
6
Environment
President Piñera signs bill in favor of recycling
President Sebastián Piñera, signed the
framework bill for the management of solid
waste and Extended Producer Responsibility
(Responsabilidad Extendida del Productor –
REP), which aims to adopt waste prevention
and recycling methods as part of the
company’s normal activities.
The bill has two main objectives: to establish
new responsibilities for producers. It holds
them responsible for the whole life cycle,
meaning design, product, sales and disposal.
For certain products, which are particularly
difficult to dispose of, such as tires, lead
batteries, alkaline batteries or lubricants, the
manufacturer will be responsible for recycling
these products. The second objective is to
create a real cultural change in society. At the
moment Chile is only recycling 10% of the
country’s waste, which clearly shows that
Chile has a huge deficit in terms of recycling.”
Source: Gobierno de Chile
Infrastructure & Logistics
Chile’s Valparaíso port to double in size
The Chilean port of Valparaíso is expected to
double in capacity by 2017, following a USD
$350 million investment from Spanish
company OHL Concesiones. The company
won a 30-year concession to build and run the
terminal. The company outbid Ports America,
Empresas Navieras and Besalco for the
opportunity to operate the terminal.
The government aims to secure further
investment to reach a target of USD $507
million for development of the terminal.
Valparaiso-Terminal 2 will see the
construction of a second terminal similar in
size to the existing port and will increase
Valparaiso port capacity to 22 million tonnes
of cargo and 950,000 teu and will be able to
deck simultaneously two post-panamax ships,
of 22 containers wide.
With the expansion, Valparaíso would become
Chile’s largest port, overtaking San Antonio.
Valparaiso’s main cargoes are fruit, copper
and iron.
Source: Seatrade Communications Limited.
Other tenders
Infrastructure:
Re-bidding project
AMB Santiago
International Airport
(Passengers Terminal)
Road project Américo
Vespucio Oriente
More information:
www.ciechile.gob.cl
Intentions to build a mega port in Valparaíso or San Antonio
The Minister of Transport and
Telecommunications, Pedro Pablo Errazuriz
has announced the Government intention to
study a plan for a new large scale port
terminal. Minister Errazuriz is very much
interested to develop a new mega-port
concept to be carried out in the central macro
area around San Antonio or Valparaiso. The
project is prepared by the Ministry of
Transport in coordination with port
companies. Their technical studies are
expected to be ready by early next year. The
port project capacity is expected to be about 6
million TEU’s per year with an investment
around US$3,000 million. According to the
Minister, Chile has at present very
competitive ports but their infrastructure
capacity is not enough to meet the higher
demand from future foreign trade and the
new requirements coming from larger boats
arriving to Chile at the end of the decade.
Source: Diario Financiero
BUSINESS IN BRIEF
| Issue 1, 2013
7
High Tech & IT
Chile has one of the OECD's highest rates of growth of broadband
subscriptions
According to figures published by the OECD
in its Broadband Portal, Chile has seen strong
growth of fixed and wireless broadband
penetration. In 2012, wireless Internet access
increased by 62%, four times the average
OECD growth rate, while fixed Internet
connections were up by 5.9% on the previous
year. As a result, Chile took second place in
the OECD, with an increase of 8.2% in the
rate of fixed broadband penetration to 28.1
per 100 inhabitants, while, for wireless
broadband, penetration reached 12.4 per 100
inhabitants. In the case of the total number of
connections, Chile ranked 20th on wireless
subscriptions, with over 4.8 million, and 22nd
on fixed subscriptions, with over 2.1 million.
Source: OECD
Chile launches plan to double
Internet penetration by 2020
Chile land of Opportunities July
2013
Publication available at:
www.ciechile.gob.cl
Business
in brief
At a press conference launching the Agenda
Digital Imagina Chile 2013-2020, President
Sebastián Piñera announced that the Chilean
government expects the digital economy to
reach 10% of GDP by 2020. The plan will
focus primarily on bringing Internet access to
80% of the country’s homes, installing highspeed Internet in 50% of the Andean nation
and launching free wifi hotspots in every
community throughout the country. Hotspots
are already present in a quarter of Chilean
towns, often in central plazas.
Creative Industry
Tender Architecture
Outbuilding for the
Chilean-National
History Museum
Santiago de Chile.
(2.625,60 m2)
More information:
www.concursomhn.cl
More architecture
tenders:
http://www.arquitectu
ramop.cl/licitaciones_
publicas/Paginas/defa
ult.aspx
Source: ProChile
Information compiled by the Economic Section of the Embassy of the Kingdom of the
Netherlands in Santiago de Chile
You can find Business in Brief also on the website of the Embassy
http://chili.nlambassade.org
Please send your comments, suggestions or unsubscribe
[email protected]
Av. Apoquindo 3500
piso 13, Las Condes
Santiago de Chile
Tel: (56-2) 2 7569214
Fax: (56-2) 2 7569226
Other newsletters in the region:
News from Argentina compiled by the Netherlands Embassy at Buenos Aires.
Please subscribe at: [email protected]
News from the Andes Region: compiled by the Netherlands Embassies at Lima, Bogotá and
Caracas.
Please subscribe at: [email protected]