Whying01 031109

Why invest in
Argentina?

Naturally Talented
to Meet Global
Market Needs

October 2009

Why invest in Argentina?
Argentina offers investors:

Solid foundations for sustainable growth and profitability
Highly skilled, innovative and entrepreneurial labor force
Abundance of natural resources, biodiversity and environmental
sustainability
Access to a large regional market and a springboard to the world
Diversified economy to meet global market needs
Rich cultural heritage and remarkable quality of life
Modern infrastructure and quality connectivity

Public sector supportive of investment

A winning formula to succeed in your business

Argentina’s Investment Development Agency 2

Argentina at a glance
(2008)

Area: 2,780 km²
Population: 40.6 million
GDP: US$326.8 billion
GDP per capita PPP: US$14,413
FDI: US$8.9 billion
Exports: US$82.1 billion
Imports: US$67.5 billion


Solid foundations
for sustainable
growth and
profitability

4

Vigorous Expansion
Six consecutive years of rapid economic growth at an accumulated rate of 8.5% per year

Selected Economies: GDP growth 2003-2008

13.0

Fastest growing
10.7
economy in
9.3 Latin America
9.0 8.9 8.9 8.7

7.3 7.5
6.8
5.7 5.7
5.3
5.0
4.7
4.2 4.0
3.2 3.3
2.5
1.3

China India Argentina Brazil Chile Colombia Mexico
Average 2003-2006 2007 2008

Source: ProsperAr based on INDEC


Balanced Accounts
Argentina maintained twin surpluses for six consecutive years and is the only
country in the region expected to maintain them in 2009 and 2010

Current and Fiscal Account Surpluses IMF's Current Account Projections 2009-2010
(as a percentage of GDP) (as a percentage of GDP)

7

6
Current account balance
Argentina
Primary fiscal balance
Paraguay
5
Uruguay

4 South America
Brazil 2010
3 Bolivia
2009
Mexico
2 Peru
Ecuador
1
Colombia

0 Chile
C h ile
2003

2004

2005

2006

2007

2008

IQ 2009

-5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0

Source: ProsperAr based on INDEC and “Regional Economic Outlook 2009”, IMF

Argentina’s Investment Development Agency 6 6

A Resilient Economy
Lower debt levels and record-high international reserve accumulation contribute to a
more stable and predictable economy, even in the current global context

Public Sector External Debt International Reserves
(% of GDP) (in billions of US$)

46 46 46
147
140
126 Public Sector Total Debt
32
Public Sector External Debt 28 28
90 27 26
83 24
76
71 20
64 19 19
18 18
56
45 14
36 10
29 27
20

1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Aug-09
Dec-94
2002 2003 2004 2005 2006 2007 2008

Source: ProsperAr based on the Ministry of Economy and the Argentine Central Bank


Dynamic Investment Process
In 2008, the highest investment rate in constant prices in the last 30 years was achieved

Gross Fixed Capital Formation as % of GDP
(in current and constant prices)

30
GFCF/GDP current prices GFCF/GDP constant prices ✓ Sustained growth in the
25 investment rate (2003-2008)
20 ✓ Fundamental pillar for a
sustainable economy and an
15 increasing production capacity
10

5

0
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
19
19
19
19
19
19
19
20
20
20
20
20
20
20
20
20



Global Crisis, Global Impact
The financial and economic crisis has impacted developing economies through two main
channels: financial and commercial

Financial channel:
• Global credit crunch: Lack of liquidity
and expensive financing • Global FDI fell 14.2% in 2008 and
44% during the IQ2009
• Risk aversion and “flight to quality”
behavior • Cross-border M&A sales in
• Growing uncertainty leading to lower developing countries fell 34.7% during
investment levels and postponement of the IQ2009
investment projects

Commercial channel: • Global trade volumes are expected
• Lower global trade flows negatively to contract by 12.2% in 2009
affecting exports
• Emerging economies are expected to
• Reductions in prices, particularly suffer a 6.5% fall in their exports
commodities

Source: ProsperAr based on UNCTAD and World Bank


Impact of the Global Crisis on Foreign Direct Investment
In line with the rest of the world, FDI in Argentina contracted for the first time in the IVT 2008
and again in the IT 2009 and the IIT 2009
Foreign Direct Investment
(% Change, IQ 2009)
Malaysia

Chile

Argentina

India
Thailand

Mexico
Brazil

Russia

Singapore

Korea
Japan
U.S.

✓ During the IIT2009, FDI experienced a
88.1% reduction from the same
-21% -21% period in 2008.
✓ Hence, FDI fell by 63.6% during the
-39% IS2009.
-42%
-46%
-51% -52%
-56% -56%
-61%

-77%
% Change % Change
-91% 2008 vs. IT2009 vs.
2007 IT2008
World -14.2 -44.0
Argentina 50.7 -47.6

Source: ProsperAr based on UNCTAD and CEPAL.


Impact of the Global Crisis on Gross Fixed Capital Formation
Investment in Argentina also contracted for the first time in the IVT 2008 and again in the IT
2009 and the IIT 2009
Gross Fixed Capital Formation
(% Change, IQ 2009)

During the IIT2009, GFCF fell by
Turkey -29.7
10.7% from the same period in 2008.
Russia -16.3
Hence, investment suffered a
Thailand -15.8
12.3% year-on-hear reduction in the
Japan -14.9
IS2009.
Singapore -14.8
US -14.5
Argentina -14.2
Brazil -14
% Change % Change
Mexico -11.8
IT2009 vs. IIT2009 vs.
Malaysia -10.8 IT2008 IIT2008
Chile -9.3 Argentina -14.2 -10.7
S. Korea -6.2
India 6.4
China 28.6

-30 -20 -10 0 10 20 30

Source: ProsperAr based on UNCTAD and CEPAL.


Impact of the Global Crisis on Foreign Trade
Argentina recorded a smaller decline in exports compared with the major economies of
the region and the world

Exports
(% Change, I Semester 2009)

✓ The decline in exports of
0%
-5%
-10% manufactured goods is also lower in
-15% Argentina than in the major
-20% economies
-25%
Brazil China Argentina
-30% U.S.(*) -21.7% -21.3%
-22.8%
-35% -24.9%
EU (27)
Canada (*) -31.7%
-40%
Chile
-45%
-38.2% -37.6%

*Figures from EU (27) and Canada correspond to the first five months.

Sources: ProsperAr based on INDEC, SECEX , Central Bank of Chile, National Bureau of Statistics of China, Ministry of Development, Brazil’s Secretariat of Foreign Trade,
Australian Bureau of Statistics, Centre of International Economy and IMF


High Levels of Profitability
Firms reached high levels of profitability in historic terms during the 2004-2008 period

Net margin of the top 500 companies in
FDI return on assets Argentina
(profits as a % of FDI Stock) (as a % of sales)

14.6
10.9
13.8
9.9 9.7
8.9 11.9
11.5

9.5

6.1 6.0

1.2

03

04

05

06

07
04

05

06

07

08
0

3
00

00

20

20

20

20

20
20

20

20

20

20
-2

-2
92

01
19

20

Source: ProsperAr based on Balance of Payments data and Survey of Big Companies INDEC


Rapid Increase in FDI
FDI recorded great dynamism over the past six years and showcased in 2008, for the third
consecutive year, a higher average than the 90s (net of privatizations)

Foreign Direct Investment (FDI)
(in millions of US$)

23,988
11,000
10,000
9,000
8,000
7,000
6,000 US$5,300
5,000 9,753
8,268 8,899
4,000
6,369 6,859 6,473
3,000
5,372 5,265 5,537
2,000 4,496 4,125
3,499
1,000 2,087 1,858 2,141 2,149 1,652
0
1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008
FDI net of privatizations Total FDI



Greenfield Investment Destination
In 2008, Argentina was the 3rd greenfield investment destination in Latin America and 2nd
in South America, identified as one of the most attractive markets with highest
international potential

Markets with high potential growth for investors
identified by the British Ministry of Commerce and
Investment*
Main FDI Greenfield Investment Destinations
Country (2008)
1 Vietnam
2 Mexico
3 United Arab Emirates
4 Ukraine
Country # of projects
5 Indonesia
Mexico 346
6 Singapore Brazil 245
7 Poland Argentina 115
Colombia 73
8 South Africa
Chile 64
9 Argentina Other 263
10 Saudi Arabia

*Ranking excludes the BRIC countries. The world report is elaborated by the
British Ministry of Commerce and Investment based on the opinion and
perspective of more than 560 management executives of international
companies.

Source: FDI Intelligence and British Ministry of Commerce and Investment


Recent Investments
High profitability reassures big players to increase their commitment and attracts more
leading companies to invest in Argentina


Highly skilled,
innovative and
entrepreneurial
labor force

17

Human Capital
Highly skilled and talented labor force

Gross Entry Ratio to Tertiary Education
(% of new entrants)
✓ Ranked 1st in Guggenheim research
fellowships, receiving the largest
0 10 20 30 40 50 60 70 80 90 number of scholarships in Latin
United States 82 America (2009)
Spain 66 ✓ Over 85,000 graduates from higher
Italy 65 education programs and 6,100
Argentina 65 postgraduates per year
✓ 106 universities throughout the
Europe & Central Asia 51
Chile 43
country
Uruguay 42
Latin America & Caribbean 30 ✓ Ranked 4th in the Global
World 24 Entrepreneurship Monitor (2008)
✓ Ranked 5th worldwide in terms of
Middle East 24
Brazil 24
quantity of ‘Think Tanks’ and
East Asia & P 21
nominated as a Regional Think Tank
South of Asia 9 Hub by the University of
Sub-Saharan Africa 5 Pennsylvania (2008)

Source: ProsperAr based on World Bank, GEM 2008 and University Yearbook 2009, Ministry of Education


Science, Talent and Creativity
A leader in the region

Researchers
(per million inhabitants)

✓ Advertising Industry:
Country 1990-2005 One of the three best places in the
world to look for ideas according to
United States 4,605 the Gunn Report 2008
Spain 2,195
✓ Research & Development:
Argentina 720 Highest number of patents per
million inhabitants in Latin America
Chile 444
registered with the U.S. Patent and
Mexico 268 Trademark Office over the past
whole 45 years
Brazil 344
Colombia 109

Source: Human Development Report 2007/08, United Nations, United States Patent and Trademark Office


A Tradition of Research Excellence
Number one in Latin America and forth in the developing world in terms of science
related Nobel Prizes
Recent awards received by Argentine scientists
Bernardo Houssay and researchers
Nobel Prize in Physiology or
Medicine 1947

For his discovery of the course of the
catalytic conversion of glycogen.
✓An Argentine scholar was the only Latin American to receive
one of the 18 foreign associate positions granted by the
National Academy of Sciences of the United States in 2008.

Luis F. Leloir ✓The Maxime Becher medal, granted every 3 years by the
Nobel Prize in Chemistry 1970 US Mathematics Society, was awarded to an Argentine
mathematician in 2008.
For his discovery of sugar
nucleotides and their role in the
✓Argentines received the highest number of Guggenheim
biosynthesis of carbohydrates.
Foundation awards in Latin America; 13 out of the 36 awarded
in 2008.

César Milstein ✓Argentina received the L´Oréal-Unesco for Women in
Science Award for the Latin American region for two
Nobel Prize in Physiology or Medicine
1984
consecutive years (2007-2008).
For his theories concerning the specificity in
development and control of the immune
✓Two Argentine physicists were honored by the Nobel
system and the discovery of the principle for Physics Laureate George Smoot in 2006.
production of monoclonal antibodies.

Source: ProsperAr based on CONICET, The Nobel Prize Organization and Argentine press releases.


High Returns on Knowledge Produced
Argentine scientists are the most prolific in terms of knowledge
production in the region (as measured by science publications)

Science Publications per 100 Full Time Science Publications per Million Dollar
Researchers Spent in R&D
(Full-time or equivalent - 2007 or last available year) (2007 or last available year)

22.3
4.8
4.6
18.5
16.5 16.3

1.6

0.2

Argentina Brazil Mexico Chile Argentina Chile Brazil Mexico

Source: ProsperAr based on the Argentine Center of Information on Science and Technology (CAICYT).


Outstanding Performance, Today and Tomorrow
The most innovative country in South America

Innovation Prospects Ranking 2009-2013
(Position: highest=1, lowest=82)

Japan 1
Switzerland 2
2004/2008
Ireland 20
Ranked as the most Russia 39
innovative country in 42
Argentina
South America and one
China 46
of the best in the
Chile 47
developing world
Mexico 48
Brazil 49
India 52
Colombia 62
Peru 67
Ecuador 69

Source: ProsperAr based on Innovation Index, Economist Intelligence


Rising Capacities and Greater Capabilities
Remarkable labor productivity gains

Labor Productivity (Index 2003=100)

140

130
+30%

120

110

100
2003 2004 2005 2006 2007 2008



Entrepreneurship
Argentina ranks fourth on the Global Entrepreneurship Monitor (2008)

Global Entrepreneurship Monitor Ranking
(2008)

Large group of talented and
50 motivated entrepreneurs
45
40 Business schools have
35 international prestige in the field
30
25
20
15
10
5
0
Angola

Egypt
Dominican
Bolivia

Colombia

Argentina

Ecuador

India

Chile

Uruguay
Peru

Mexico

Serbia
Brazil
Republic

Source: ProsperAr based on GEM 2008


Abundance of
natural resources,
biodiversity and
environmental
sustainability

25

Size, Abundance and Variety
To enjoy and develop

✓ 8th largest country in the world, 2nd
in Latin America
✓ 9th largest agricultural area in the
world
✓ 32 million Ha of forests
✓ 4,500 km of exploitable mining
resources
✓ 4,700 km along the Atlantic Coast
with rich fisheries
✓ 3rd largest fresh water reservoir in
the world, the Guaraní Aquifer
(shared with Brazil, Paraguay and
Uruguay)
Source: ProsperAr based on United Nations Food and Agriculture Organization
(FAO), CIA World Factbook, and other sources


Diverse Energy Sources
Outstanding natural resources to fuel growth

✓ Vast oil and gas resources with
exploration opportunities
✓ Hydraulic energy generates 38% of
the total electricity
✓ Growing wind and solar energy
production
✓ Three nuclear power generation
plants
✓ One of the top five biofuel producers
worldwide
✓ Incentives for renewable energy
production under Law 26,190 (2006)
Source: ProsperAr based on United Nations Food and Agriculture Organization
(FAO), CIA World Factbook, and other sources


From High Peaks to Blue Lakes
Varied terrenes

✓ Exuberant beauty and extraordinary
flora and fauna can be found
throughout Argentina.

✓ Visitors are captivated by the deep
blue lakes, high mountain peaks,
large salt pans, paleontological sites,
fertile valleys, snow-covered
volcanoes, subtropical rain forests,
crystal-like glaciers, white deserts,
long rivers, boundless flat lands and
vibrant cities.


From the Warm North to the Cold South
Multiple climates

✓ The North: warm; from subtropical
with a wet season to tropical
without a wet season; including
tropical highland.
✓ The Center: moderate
temperatures; influenced by the
ocean, moderately arid; the Pampas
grassy plains.
✓ The West and South Center:
Patagonian cold temperatures; arid
mountains and plains.
✓ The South: cold, arid and windy;
humid in the far South; high
mountain snow.


Eco-Intelligent Growth
Committed to environmental sustainability

Yale Environmental Performance Index
(Position: highest=1, lowest=149)

Switzerland 1

Sweden 2

Brazil 35 174,000 km² of protected
areas
Argentina 38

United States 39
(6.4% of national
territory)
Australia 46

Mexico 47

South Africa 97

China 105

India 120

Source: ProsperAr based on Yale Environmental Sustainability Index and World Development Indicators, WB


Access to a large
regional market
and a springboard
to the world

An Internationally Recognized Choice
One of the fastest growing FDI destinations in the world

Growing FDI (in billions of US$) FDI Inflows Growth

2008
9.7 World -14.2 %
Developed economies -29.2 %
Developing economies 17.3 %
6.5
Latin America &
5.3 5.5 Caribbean 13.2%
4.1 Argentina 50.7 %

1.7

2nd South American FDI
destination for greenfield
2003 2004 2005 2006 2007 2008 projects (2008)

Source: ProsperAr based on International Accounts, INDEC and UNCTAD


An Economy Integrated to the Region and the World
Leading multinational companies operate in Argentina, many of them with a long-term
vision and commitment
Top 50 Transnational Corporations with a presence in Argentina

Nearly 2,000 TNCs
(half of the Fortune 100). Many
TNCs operating with a
long-standing tradition and
long-term vision


Going Global
Leading Argentine companies operating internationally

Top 50 Local Multinationals

CLISA


Open Economy
Rising trade flows

Rising Exports and Imports of Goods and Services
(in billions of US$)
Exports ↑
19%
Exports Imports 82
(average annual growth rate
70 2003-2008)
66

55 56
47
43
40
34 36 Imports ↑
29
29%
20 (average annual growth rate
2003-2008)

2003 2004 2005 2006 2007 2008



A Global Opportunity
A gateway to Latin America’s largest markets and a springboard to the world

MERCOSUR: Customs Union Mercosur member countries GDP per capita
(PPP dollars 2008)

14,414
13,295
10,326

4,778

GDP: US$1.9 trillion
Population: 241 million Argentina Uruguay Brazil Paraguay
inhabitants
Main trade agreements:
Members: Argentina, Brazil, Trade negotiations underway include an agreement with
Uruguay, Paraguay the South African Customs Union (SACU), countries of the
Associates: Bolivia, Chile, Colombia,
Ecuador, Peru, Venezuela
Gulf Cooperation Council and Morocco; a more
comprehensive agreement with the European Union (EU);
a trade preference agreement with India; and a free trade
Source: ProsperAr based on IMF agreement with Israel (in process).


Linked Up
International synergies for global integration

WORLD TRADE ORGANIZATION: Founding member

G-20: Argentina and Brazil are the only two members representing South America

Investment Protection and Promotion Treaties: 59 bilateral investment treaties

ALADI ( Latin American Integration Association) provides the institutional
framework for regional integration, promoting the creation of an area of economic
preferences in the region, with the ultimate goal of establishing a common Latin
American market.
Members: Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay,
Peru, Uruguay, Venezuela and Cuba.


Open Society
Auspicious environment for business to thrive

✓ Open Society Argentina is a free country with a high degree
of political and civil freedom, according to the
✓ Commitment to democracy and freedom findings of the Freedom House 2008 survey.
The survey concluded that more than half of
✓ Free of religious, ethnic and armed conflicts the world does not enjoy full freedom.

Map of Freedom 2008

FREE

PARTLY FREE

NOT FREE

Source: Freedom House


Diversified
economy to meet
global market
needs

39

Producing Variety
Widely diversified economy

GDP by Sector Agriculture, livestock,
(% of GDP, 2008) forestry & fishing
Transport, storage & 10% Real estate &
communications business services
8% 11%

Government
6% Wholesale &
retail trade
Construction
12%
6%

Financial intermediation
5%
Mining Education, health &
4% community services
Hotels & restaurants 13%
3%
Electricity, gas & water
1%
Manufacturing industry
21%



Investment Opportunities Across Sectors in Argentina

Manufactured
Goods with
Added Value or
Design
Agro-Industry, Biotechnology
Wine & Biofuels

Professional
Value-Added Pharmaceuticals
Services & Health
Software &
Information
Technology

Creative Mining &
Industries Forestry
Tourism


Agro Industry
Leading global producer & exporter of food commodities and products

Argentine Share in Global Exports and Global Position
(export % and position)

Natural honey 24.5
Pears 18.2
Lemon juice, concentrated 73.3

Safflower seeds 32.0
Soybean oil 50.2

Grape juice 20.5
Sunflower oil 23.3
Lemons and limes 14.7

Soybeans 11.6
Safflower oil 12.0
Powdered whole milk 9.9

Sunflower seeds 1.3
Source: ProsperAr based on FAO data


Agro Industry
High agricultural efficiency and productivity

Soybean Production Yield Wheat Production Yield
(Hectograms/Hectare, 2007) (Hectograms/Hectare, 2007)

28,270
29,711 27,046
28,133 28,066
23,220 22,199
24,369
23,010

10,562
S.
il

da
lia
a

S.

il
a

lia
az

a
in

U.

az
ad
in
na

U.
ra
Br

ra
nt

Br
nt
st

n
Ca

st
ge

Ca
Au

ge

Au
Ar

Ar

Source: ProsperAr based on FAO


Agro Industry
Booming exports & innovation

Rising Manufactured Exports of
Agricultural Origin R&D Applied to the Value Chain
(in billions of US$)

✓ 16% of the total expenditure on innovative
28
activities is for agro industry
21 ✓ 8% of the manufacturing’s R&D investments
are agro-industry related
15
14
11
12 ✓ 55 biotech firms are working to further
develop the country’s Food & Beverage
industry
03

04

05

06

07

08
20

20

20

20

20

20



Wine Industry
Unique terroir, tradition and freedom to innovate

Wine Exports
(in millions of US$ and in million of liters) 5th largest
producer in
the world
700 450
Fastest growing exporter
in the world (22.3% per 400
600
year, 2002-2008) 350
500
7th largest

millions of liters
millions of US$

300
400 250
domestic
market
300 200
150
200
100
100
50 7th largest
0 0 exporter in
the world
01

02

03

04

05

06

07

08
20

20

20

20

20

20

20

20

Millions of liters US$ millions
Source: National Vitiviniculture Institute (INV)


Wine Industry
Quality-Value advantage positions Argentine wines globally

Traditional and High Potential Markets Growing Sophistication and Value Added
Glass-Bottled Wine Exports by Country Destination (2008) Export Growth by Price Segment compound annual growth rate
(2002-2008)

U.K.
Netherlands
Icon 237%
9.3%
Canada 7.1%
10.4% Brazil
7.7% Ultra
44%
Latin America Premium
5.2%
Others
15.4% Super
Other Europe 35%
4.6%
Premium
Asiatic Countries
3.8%
Nordic Countries
Premium 24%
Mexico 3.7%
Russia
2.5%
Russia1.2%
United States 1.2%
29.0% Popular
25%
Premium
Source: Wine of Argentina and Wine Area


Biofuels
A green powerhouse: competitive production of renewable & clean energy

Projection of Top Five Biodiesel Producers in 2010
(share in total production %) ✓ Competitive advantage based
on abundant and high-quality
natural resources, qualified
human resources and existing
U.S. 14.3%
industrial capacity.

Germany 12.0%

France 11.6%
Investment Incentives
Biofuels: accelerated
Brazil 11.1% depreciation of income tax
and early return of VAT for
capital goods and equipment.
Argentina 7.2%

Source: World Ethanol and Biofuels Report by the Consulting Company F.O. Lichts


Biofuels
Strong international and domestic demand

Projected Rise in International Demand Projected Diesel Consumption
(in thousands of m3)

Countries with mandatory biofuel 19,000

(biodiesel) mixes
✓European Union
14,250

✓Brazil 9,500

✓United States
✓Japan
4,750

✓Canada 0

11

12

13

15
10

14
04

05

06

07

08

09

20

20

20

20
20

20
20

20

20

20

20

20
Estimated growth rate: 3,5%
✓ Diesel, easily replaceable by biofuel (biodiesel), leads
domestic fuel consumption accounting for 66% of total
consumption.
✓ Argentine Biofuel Law 26,093 (2006) establishes
Source: ProsperAr based on the Energy Secretariat mandatory biofuel mixes (5%) by 2010.


Manufactured Goods with Added Value or Design
Attractive selection of investment opportunities

Auto Parts Industry
Developed and innovative industry with a long tradition in the
country.
International leading companies with presence in Argentina: Fiat,
Ford, General Motors, Mercedes Benz, Peugeot-Citroën, Renault,
Toyota, Volkswagen, Iveco and Scania.
Great opportunity for growth in auto parts to complement
regional and global demand in the automotive industry which is
increasing in sophistication and innovation.
Success case: Rafaela, Santa Fe (Basso) is a leading world producer
and exporter of valves.

Agro Industrial Machinery and Precision Instruments
Major agro machinery cluster with more than 100 years of
expertise, 40,000 employees (80% skilled labor) and 650 factories.
Know-how to produce innovative equipment for new agronomic
practices like “Direct Sowing”.
A growing production of high-tech precision agro components.

Agencia Nacional de Desarrollo de Inversiones 49

Manufactured Goods with Added Value or Design
Attractive selection of investment opportunities
Manufactured goods with design: sailboats, cruisers and vessels
High quality and international recognition.
Over 25 years exporting to developed countries mainly the European and
Asian markets.
Integrated value chain: 120 builders of sailboats, cruisers, vessels, inflatable
boats, equipment and all necessary services for the production and
maintenance of a wide range of boats.
Installed capacity of 700,000 m2 and occupying 700,000 people.

Nuclear, Spatial and Industrial Engineering
INVAP: technology-based company dedicated to developing advanced
technology in nuclear, aerospace, medical and industrial sectors.
In 2000 won an international tender, beating specialized companies from
countries like Canada, Germany and France for a 20 MW reactor power, which
was sold for approximately US$200 million.
The reactor is used for scientific research in the fields of health, environment
and industry and the production of radioisotopes for medicinal purposes,
catering to Australia, New Zealand and Southeast Asian market.
IMPSA: global company dedicated to producing solutions for power
generation from renewable resources.

Agencia Nacional de Desarrollo de Inversiones 50

Pharmaceutical Industry
Long standing tradition, innovation and rising potential

✓ Highest local market share of domestic
Growing Sales & Exports labs in comparison with other Latin
(in millions of US$) American countries.
✓ Local labs in Argentina account for 56%
+69% of local sales while domestic firms in
3,000 Brazil account for 25%, 24% in Uruguay,
and 12% in Mexico.
2,500
✓ Two companies included in the Ranking
2,000 of the 19 Argentine Multinationals
(ProsperAr-Columbia).
1,500 +134%
Market Share of International & National Labs
1,000 in Argentina

500
International
Labs
0 44%
2003 2004 2005 2006 2007 2008 National Labs
56%
Sales Exports

Source: Argentina Industrial Chamber of Pharmaceutical Laboratories (CILFA)


Health Industry
Applied knowledge

✓ The rate of clinical trials per 100,000
Clinical Research Investments in the
inhabitants is 1.45, nearly double the
Pharmaceutical Industry average (0.79) in Latin America.
✓ Competitive advantages due to solid hospital
infrastructure and hi-tech equipment.
91.8 ✓ Creation of the clinical trial registry in 2009:
+170% critical tool for researchers, experts, patients
65.8
and donors.

49.6 ✓ Focus on the more advanced phases of
44.9
37.2
clinical trials.
34.0
Share of Clinical Trials by Phase
(in %)
Phase I
Phase II
1%
18%

2002 2003 2004 2005 2006 2007
Phase IV Phase III
68% 13%

Source: ProsperAr based on CEPAL (2008) and CAEME


Biotechnology
Applied research and first-class scientists

Biotechnology Sales ✓ More than 35 bioscience research institutes
(by type)
operating in private companies and universities
✓ Highest number of biotechnology companies per
capita in Latin America
Food
Ingredients ✓ Leader in GMO applications accounting for 17% of
15% world GM crop area
Human Health ✓ Integrated with industrial production (agricultural
11% and pharmaceutical industries)
Animal Health
25%
✓ High-calibre scientists and researchers
Inoculants
8% ✓ Two biotechnology companies included in the
Ranking of the 19 Argentine Multinationals
(ProsperAr-Columbia)

Biotechnology Investment Incentives: accelerated
depreciation of income tax and early
Seeds & reimbursement of VAT intended to reduce
Plants payments in the first years in purchase of capital
41%
goods and related equipment
Source: Biotec Sur, International Service for the Acquisition of Agri-biotech Applications (ISAAA) and Bisang, Gutman, Lavarello, Sztulwark and Diaz (2006)


Professional Value Added Services
High quality at competitive costs

Record Levels of Exports of Value Added
Professional Services = US$4.9 billion
✓ According to Deloitte’s latest Global Shared (2008)
Services Survey, 265 leading global firms from
all sectors, rank Argentina as the fifth best
location for outsourcing services for it’s labor Cultural & Entertainment
quality and availability, just below the US, (US$419 mn) IT
(US$770 mn)
India, UK and China (2009)
✓ Buenos Aires as the 14th most attractive city
in the emerging world for outsourcing
activities (“Global Services” index)
✓ A location with the presence of leading
companies: Globant, Atento, Teletech,
Teleperformance, Motorola, Microsft, HP,
IBM, Citibank, Repsol, CapGemini, Tata
Consulting and Nextel Business, Professional & Technical
(US$3,7oo mn)

Source: ProsperAr based on Balance of Payments data, INDEC, Deloitte Global Shared Services Survey 2009 and Global Services Magazine


Professional Value Added Services
Strong advantages make Argentina a global center for skilled outsourcing

Minimal time difference with the
✓ High penetration and best English levels in
US and main European cities
the region (Cambridge ESOL exams)
✓ Other languages spoken: Italian, German,
Portuguese and French
✓ Cultural similarities with European markets
✓ Competitive costs
✓ World renowned creativity
(advertising and design)
✓ Native Spanish speakers reaching out to a
population of 500 million people that speak
the language worldwide

Argentina Time Zone = GMT -3 hours

Source: ProsperAr based on Balance of Payments data, INDEC, ATKearney Consulting and Global Services Magazine


Software and IT Industry
Thriving growth driven by innovative local firms and leading global companies

✓ 1,600 software companies
Growing Software Production & Exports (60% SMEs)
✓ Young and dynamic sector:
40% of the SMEs started operations
2,500 after 2002 and 85% after 1991
SALES EXPORTS
+152%
✓ In 2008 exports accounted for
2,000
28.6% of total sales and 55% of all
software companies export
1,500
✓ Leading international presence:
+364% IBM, NEC, Siemens, Google, Oracle,
1,000
SAP, Intel, Motorola and Sabre
Holdings
500
✓ According to The Economist's
technological ranking, Argentina
0
surpasses Mexico, Colombia and
2003 2004 2005 2006 2007 2008
Peru and ranks 3rd in Latin America
Source: ProsperAr based on Cessi and INDEC after Brazil and Chile (2009)


Software and IT Industry
Talented labor force and public support

✓ Available and affordable high skilled IT Hot Spots
labor force
✓ 243 IT degrees offered locally
Santa Fe
✓ Some 70,000 students enrolled in
university-level informatics programs Córdoba
Gualeguaychú
✓ Public-Private cooperation networks Mendoza
Rosario
✓ Software Promotion Law (2004) Buenos Aires
✓ Diverse attractive locations Mar Del Plata

Tandil
IT Industry Investment Incentives:
10-year tax stability; tax credit up to
70% of employers’ contributions;
60% reduction in income taxes.

Source: ProsperAr based on Cessi and other sources


Creative Industry
Diverse and attractive segments

Advertising

Music Publishing

HOT
SECTORS
Videogames Audiovisual

Fashion Design


Creative Industry
A flourishing cluster

Cultural GDP
2005 2006 2007 Export boom:
US$500 million in 2007,
Annual growth rate 19.6% 18.6% 15.0%
double 2002 values
As a % of total GDP 2.6% 2.8% 3.0%
Source: ProsperAr based on SINCA.

Advertising
The Gunn Report 2008 Argentina, leading television
The most awarded countries in the world in 2008 content exporter: 4th exporter in
TV contents wordlwide
TV & Gunns
Print Interactive Total
Cinema Blazing(*)

U.S. (1) 149 52 91 39 331
Great Britain (2) 124 39 45 4 212 Argentina in Top 3 :
Argentina (3) 99 21 2 7 129 One of the three best places in
Germany (4) 47 35 31 6 119 the world to look for ideas. And
Japan (5) 42 1 60 14 117 one of the three best to produce
Source: ProsperAr based on The Gunn Report 2008. (*) Note: Gunns Blazing tallies all them, according to
awards given under the various labels of Integrated, Mixed Media, Innovative,
Content and Contact, Titanium, and other advertising award categories; Frapa The Gunn Report.
(The Format Recognition and Protection Association)


Tourism
Magnificent cultural experiences and a striking geography attract global tourism

✓ One of the most exciting and diverse tourist ✓ Buenos Aires ranked #1 gay friendly city by
destinations in Latin America offering from Out Traveller Magazine
wine tourism to eco-friendly adventures
✓ Excellent hotel infrastructure throughout the
✓ Buenos Aires ranked in the top 5 cities to country
visit in the world for 3 consecutive years
✓ Exquisite gourmet dining & restaurants
(Travel & Leisure, 2009)

Tourist arrivals Rising Tourism Expenditures
(in millions of people) (in millions of US$)

2.30 2.33 3,295
2.06 3,060
1.79 2,472
1.51
1,883
0.93 1,476
1,052

2001 2004 2005 2006 2007 2008 2001 2004 2005 2006 2007 2008
Source: Tourism Secretariat


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