ExportAr News 4 english

Includes Special Reports on China and Azerbaijan

Fundaci贸n ExportAr

July 2011

Medical tourism Mar铆a cecilia Nah贸n Aldo Ferrer Venice Biennale IDEP Certification by Private Organizations Fairs - Events - Calendar 2011

Information Technology A success story Globant

FOREWORD With the premise of developing productivity and bringing Argentine products to the world, since 2003 it had begun the most important phase in the history of Argentine exports. In that context, exports increased in the last 8 years 130%, from 29,940 million dollars of shipments abroad in 2003 to 68,500 million dollars in 2010.

Nevertheless, not only the insertion of Argentine goods or products have had a historic boost, but also the export of services, that is international transport, whether cargo or passengers, tourism services, IT, communication, technical or professional services have also been benefited from public policies towards external development and have also had a historic growth.

During that period, from 2003 to 2010, the export of services has increased 190%. Among which, including those with better performance, can be mentioned IT exports that have increased 163% from 166 million dollars in 2003 to 1,184 in 2010, and entrepreneurial services that have increased 306% from 953 to 3,876 million dollars.

The market of export of services at world level is also showing a historic boost that is reflected through a share in total world exports of 20% and a growth of 98% since 2003 to 2010.

During the period stated before, our country has have a percentage growth that almost doubles the world percentage as a whole (190% growth of Argentine export of services compared to 98% growth of world export of services). Public promotion policies, together with many factors, among which our country has many competitive advantages, such as a highly skilled workforce, the development of an adequate communications structure, time zones closer to big consumer countries, among others, are some of the factors that explain this phenomenon.

Fundaci贸n ExportAr, which continuously evaluates the export of goods and services variables of our country and the world designs promotion programs accordingly taking into account the favourable international context and prevailing conditions in our country, does not only work actively towards the export of services promotion but also has created a division especially devoted to fostering the international promotion of them.

In this regard, through Fundaci贸n ExportAr, the promotion of Argentine services has been supported by and this year will be present with more than 200 national companies in different activities around the world. Regarding IT services by attending international fairs such as CEBIT in Germany, or Mobile World Congress in Spain; audiovisual production and communication services by participating in Business Rounds of Animation in Buenos Aires, or in the Animation festival in France; with promotion activities of health services and outsourcing in Uruguay, Costa Rica, Spain and the US; education services promotion jointly with the Ministry of Education with more than 20 universities and education institutions participating in Canada, Denmark and Chine, just to mention few activities among others.

Globalization has played and still plays a crucial part in the development of the industry of services and export of them is a vital variable to be considered when setting comparison standards for development and insertion into the international economy of each country in addition to the relevant social role the development of services plays since it demands of highly skilled human resources.

Juan Usandivaras

CONTENTS

Newsletter of Fundación ExportAr

July 2011

4 Nampo Harvest Day 2011 6 Interview José Cisneros, Metalfor

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

7

Interview Adrián Tittarelli, GEMAA

9 Nampo Harvest Day 2011,

market and sector

Manager Cdor. Diego Nelli Editorial and contents Santiago Mantelli Dr. Héctor Lorenzo Lic. Nilda Bordón Lic. Verónica Scornik Lic. Javier González Ojeda Lic. Verónica Biganzoli

11 Apas Fair 2011

Design DG. Pablo Caruso DG. Sebastián Feinsilber DG. Omar Baldo Julieta Pratesi English version Gabriela A. Buonomo Laura Rajchman Lawrence Wheeler Typography: Bree, © Type together

13 Promotion of productive investments in

Argentina María Cecilia Nahón

15 Interview Natalia Bosetti 16 Medical Tourism: professional

proficiency and natural attractions

Ministerio de

Relaciones Exteriores, Comercio Internacional y Culto w w w . e x p o r t a r . o r g . a r Complete or partial reproduction of the content and photographs herein is permitted by mentioning the source: News, Fundación ExportAr Newsletter.

18 Optimal production structure

Aldo Ferrer 20 A success story Globant

Information technology

Actividades 24 MICA A party of diversity,

innovation and culture

30 Interview Juan Luis Fernández, IDEP 32 Interview Carlos Torrico 35 Seminar on export services

75 76 76 77 77 78

Fairs Nafsa 2011 XXIII International Exhibition “Agro 2011” Snackex 2011 FIME SHOW 2011 New York International Gift Show 2011 Abastur 2011

Rounds 78 International Business Round of Dairy products - Mercoláctea 2011 Art Business Center in Arte BA 2011 79 6th International Business Round of Buyers from construction and housing 80 5th International Business Round of Supermarket - Sial Mercosur 2011

in Neuquén

36 Interview Daniel Ivoskus 38 A historic achievement

Promoción comercial 80 PINTA London 2011 81 4th Promotion edition on board the iDTGV

in the Venice Biannale

43 Dossier Certification by private

organizations

57 Special report China, José Bekinschtein 63 Special report Azerbaijan

Training 81 Seminar “How to export wines to strategic markets 2011” 82 Seminar “How to export software to the US“ 82 Training cooperative workers and entrepreneurs in the design of successful business plans 83 Calendars

Nampo Harvest Day 2011 The biggest fair in agricultural and livestock machinery in the southern hemisphere took place in South Africa.

The weather and soil characteristics of the African country, and the fact that it shares the same latitude as Argentina, makes it a very interesting market for Argentina factories oriented to the no-till farming technology.

Nampo Harvest Day is one of the biggest exhibitions privately organized in the world and the biggest fair of agricultural and livestock machinery in the south hemisphere, which takes place annually in the suburbs of Bothaville, in the Republic of South Africa.

Bothaville, South Africa May 17th-20th Agricultural machinery

The fair is organized by the Grain South Africa (GSA), which gives the unique opportunity to all manufacturers and distributors of agricultural machinery, products and services, to exhibit and present the wide range of products to potential buyers and South African farmers.

South Africa is a country that started developing interest in the Argentine agricultural paradigm, especially in no-till farming system and technology to bagged grains, in which 40 percent of the national production of grains is stored in silo bags.

The practical presentations of machinery and implements are a unique characteristic of the fair that allows farmers to see the demonstrations of a full variety of machines and implements and to test the efficiency of products and use the knowledge to carry out future commercial transactions.

Argentine participating Companies and Organizations:

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AFAMAC CAFMA CECMA (Clúster Empresaria Cideter de máquinas Agrícola) MINISTERIO DE RELACIONES EXTERIORES COMERCIO INTERNACIONAL Y CULTO PROARGENTINA PROCORDOBA DIRECCION GENERAL DE COMERCIO EXTERIOR - MINISTERIO DE LA PRODUCCION – GOBIERNO DE SANTA FE EXPOAGRO GOBIERNO DE LA PROVINCIA DE BUENOS AIRES – MINISTERIO DE LA PRODUCCIÓN

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• • • • • • • • • • • • •

INTA STANDARD BANK ARGENTINA MAGRIBA METALFOR S.A AGRIBUSINESS CONSULTING & TRADING SRL AKRON APACHE S.A BUFALO S.A INDUSTRIAS METALÚRGICA CESTARI SRL TBeH – Equipos Agro Viales S.A CEDAR S.A. EquiAgro S.R.L.

The fair has been taking place annually since 1967, year in which 200 farmers visited it. This last time, 74,000 visitors attended during the four days of the event, surpassing the affluence of the audience of the previous edition.

According to Jub Jubelius, Chairman of the Committee of NAMPO, results have been very good, highlighting in particular the high standard and quality of the stands, as well as the renewal of exhibitors, indicator of this fair being a space to generate business. Likewise, he points out the interest of international exhibitors, either individually or as members of a government initiative, keeps growing year after year.

Argentine participation This was the third time that Argentina was present in this fair with a National Pavilion. The participation was part of the joint work between Fundaci贸n ExportAr and the Program of Support to International Trade (PDCEX) from the Ministry of Foreign Affairs, International Trade and Worship, the INTA, Expoagro, Cideter, AAPRESID, CAFMA and the Governments of the Provinces of Buenos Aires, Cordoba and Santa Fe. The stand had a surface of 1,296 m2, comprising close and open space and was made up of 22 national institutions and companies, where also 8 machines were exhibited and resulted a key factor in displaying the exportable offer and added great value to the Pavilion.

Moreover, companies and institutions had the opportunity to show their products on signs, brochures and playing institutional videos, just like the INTA and CAFMA did, complemented with the dissemination of the no-till farming system, its advantages, sustainability, efficiency and performance, through relevant informative graphs and images provided by the INTA. The daily attendance of companies at the stand, besides permanent walks along the fair visiting clients or distributors or having meetings, was also accompanied by other complementary activities.

Before the beginning of the event, the Ambassador Carlos Cersale offered a welcome reception followed by an informal exhibition about the commercial strategy to carry out in the future in South Africa after NAMPO for the promotion of the Argentine agricultural technology. In addition to companies, institutions and organizations that participated in the mission, the President of the Argentine-South African Chamber of Commerce, Oscar Hansen, was also present. Likewise, a reception offered by the Standard Bank was carried out in the premises of the Argentine Pavilion in order to create a meeting space among national companies and potential clients, to which authorities of the Fair and of GrainSA also attended.

tives of CAFMA (Ricardo Fragueyro), CIDETER (Ma. Isabel Borghi), GrainSA (Jannie de Villiers) and initiated by Mr. Ambassador, lacking the signature of the INTA, who was represented in the meeting by Mr. Cristiano Casini. The objective of this Letter (as well as the Agreement that will ultimately give a legal framework for the cooperation between both countries) is to facilitate the installation of demonstrative fields of no-till farming, using a space of 20 hectares, monitored and executed with the technology provided by the INTA and using the proper machinery for this experience, mainly seeders and crops sprayers.

Results General results were very good, taking into account the objectives of each one of the exhibitors. Companies as well as the institutions that attended the fair highlighted the excellent location of the pavilion, at the entrance of the Fair, which guaranteed permanent traffic of visitors.

Likewise, they also stressed the good design and construction, the great visibility given by the high graph applied on top of the house, as well as the good layout of spaces, the usefulness of the house and the services and infrastructure there.

Organizers of the Fair have already been asked about the possibility of having the same space in the 2012 edition of NAMPO. During the fair, sales were done for over USD 400,000 and in general companies said that they met their goals in seeking for distributors and strengthening commercial bonds, projecting sales for over a million dollars.

The last day, a letter of intent was signed with GrainSA in order to explore the possibility of developing demonstrative fields of no-till farming. This letter of intent was signed by the representa-

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Nampo Harvest Day 2011 Interview | José Cisneros

Metalfor: Nampo is a platform to reach all Africa.

Metalfor is a family-owned company that was founded in 1974 in the small town El Fortin in Córdoba with the manufacturing of sprayers. As time went by and due to having steady growth, they moved it to Marcos Juárez in 1993 in order to increase their production capacity. Since the year 2000, said growth led to the decision of adding a new plant in Noetinger, also in the province of Córdoba (Ex Plant Araus) and establishing a subsidiary in Brazil, in Ponta Grossa, 120 km from Curitiba. As of that moment and until now, the company has been exporting to 15 countries with the intention to disembark in other markets in the short and medium term.

“The objective is to become a company that provides comprehensive solutions in agricultural machinery for the country and for the world in a product portfolio that is getting bigger, since it not only has sprayers but also combine harvesters, tractors and other complementary tools”, said José Cisneros, Responsible for External Markets of the firm.

Metalfor was present for the third time in a row in Nampo. “Year after year, farmers show more interest in our machineries, since they start getting familiar with the equipment and realize that they offer a good price-quality relation compared to European machinery, for instance”, added the entrepreneur.

“The fair was interesting also due to the public-private joint organization by provinces, as well as by Fundación Exportar, Expoagro, CAFMA and CIDETER. The contribution of sponsors was also important, such as Ternium and Standard Bank, and the vital work of

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the INTA in disseminating no-till farming that goes hand in hand with our machineries”.

“Nampo particularly in South Africa represents a work platform to think about other countries of that continent. As a result, shipments to Namibia and Botswana have already started, and there are other markets where there are concrete contacts, like Kenya, Angola and Nigeria”.

“We appoint representatives in every country, who are then responsible for sales, technical assistance and the supply of spare parts. It would be very hard to work otherwise”, assured Cisneros.

Regarding the next international activities to which they want to attend, he pointed out that in July they have the goal to go to Tecnoagro, in Peru and Agroexpo, in Colombia. In September, the agenda shows four appointments: Agrimega Week and Swartland, both in South Africa, Expocruz in Bolivia and Expoprado in Uruguay. They want to use November as a month to conquer markets in fairs, provided that they foresee attending events to be carried out in Kazajtan, Chile, Germany, Venezuela and Russia.

The calendar of activities of Metaflor ends in December, with the Feria Expodinámica, in Paraguay.

Interview | Adrián Tittarelli, Exporter of Agricultural Machinery Armstrong (GEMAA)

Export Groups: GEMAA, Armstrong’s achievement Six companies of that city gathered and improved their performance significantly. Moreover, they helped one of them have their first exporting experience.

The export group Grupo Exportador de Maquinaria Agrícola Amstrong (GEMAA) is integrated by six companies from the city of Armstrong, province of Santa Fe: Achilli y Di Battista SRL; Industrias Geotec; Industrias Baima SRL; Fabrinor SA; Jorge y Hernán De Grande SRL and Metalúrgica Campero SRL. Said group started its activities in July 2010 and the economist Adrián Tittarelli coordinates it. The formation of the Group was possible thanks to the joint program of Export Groups of Fundación ExportAr and the Standard Bank Foundation.

“Thanks to the help of these institutions that provide economic support, advice and information, we were able to move forward with the organization of the group easily. It was also important the collaboration of the Commercial, Industrial and Rural Center of Armstrong, which offers its premises as the legal headquarters of the group and for the meetings”, indicated Tittarelli.

Working together made possible for these companies to optimize resources, coordinate efforts and increase their exportable offer. It is worth pointing out that among the member companies, the whole range of necessary products is provided for the agricultural work and companies do not compete against each other, since there is strong complementation in the manufacturing of machinery and each one of the partners contributes to the group with different products.

Among the joint activities in which the group was involved, it attended International Fairs and business rounds abroad, a variety of reverse trade missions were carried out, and the image of the group was also promoted by making brochures together.

In the year 2010, the exports done by the Group were worth USD 1.331.990, 89.

This number represented an increase of 100.28% compared to 2009. The exporting destinations varied, having strong presence in neighboring countries, mainly Uruguay and Bolivia; and Paraguay to a smaller extent. However, exports were also done to far-off countries such as South Africa, Ukraine, Russia, Kazajtan and Georgia.

On the other hand, spare parts were also exported to consolidated markets.

In order to carry out many of the exports, transportation was coordinated jointly, especially in cases like the company Industria Geotec, which exports plastic tanks to Bolivia, and due to the low price and great volume of their products, shipments to that country were done jointly with the other companies of the group that export to Bolivia, completing like that the truck with tanks.

Moreover, the group managed to appoint jointly a traveling salesman for all the companies of the group in Bolivia who has the responsibility of being the liaison between the companies and each one of their dealers in the neighboring country.

Also, a wide range of joint trainings were done about different topics such as legal aspects of international trade, tax aspects, international logistics, etc. Another achievement of the Group was, that a few months after its formal constitution, one of the companies, Industrias Baima SRL, which was the only one that had never exported when the group was formed, did its first export. This was possible after attending a fair in Uruguay in December 2010 in which the machinery they had taken to exhibit become a definite export due to the interest of farmers from that country.

Different importers from different countries ask for quotes constantly. The coordinator is responsible for doing the follow-up after the fairs and keeping in touch with potential buyers.

These were some of the fairs that the Group attended: Expo Cruz, in Santa Cruz de la Sierra, Bolivia; Santa Fé Expone in Montevideo, Uruguay and Nampo Harvest Day in South Africa, among others.

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Nampo Harvest Day 2011

The market South Africa, with a total area of 1.219.912 km2 and a population of 49.3 million people, is located in the southern tip of the African Continent, bordering on the Atlantic Ocean at West and with the Indian Ocean at East, at North with Namibia, Botswana and Zimbawe and Northwest with Mozambique. Lesotho and Swaziland are two independent States surrounded by South African territory.

Regarding economy, South Africa is in the engine of the Southern Cone of the Sub-Saharan African region and represents the biggest economy of the continent, with a global GDP of 329 billion dollars and a GDP per capita of 6.600 dollars. The South African economy currently has a highly diversified structure with a share of services in 65% of GDP. Although the South African economy has developed around great wealth and diamonds, South Africa holds the most developed industrial sector of the continent and an important agricultural sector due to a significant proportion of arable land and suitable for grazing.

In 2010, South African exports reached 81.8 billion dollars, where the mining sector has important preponderance, although among the shipments to other countries, products derived from the manufacture of iron and steel also stood out, as well as exports of vehicles and auto parts. The main business partner is China, where 10.3% of the shipments to other countries are sent, followed by the United States (9.2%), Japan (7.6%), Germany (7.0%), the United Kingdom (5.5%). Regarding imports in 2010, they surpassed 73.5 billion dollars, arising as main business partners: China (17.2%), Germany (11.2%), United States (7.4%) and Saudi Arabia with a share of nearly 5%.

Regarding bilateral commerce between Argentina and South Africa, exports in said market reached 870 million dollars in 2010. Among the main products exported to the South African market, the main ones are prepared foods for animals, with shipments for 345 million dollars and a share in the total amount exported of 39.7%, followed by crude oil (159 million dollars and a share of 18%), greases and oils (135 million dollars and a share of 15%), land transport material (55 million dollars and a share of 6.4%) and it is also important to mention shipments of meat (24 million dollars and a share of 2.8%).

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The sector The sector of agricultural machinery plays a main role up to the extent that great part of the crops is done with national machinery, a fact that places the sector as an essential component to reach the production record of the last decade.

Over 75% of the production of machines, agro parts, tractors and combine harvesters goes to the internal market.

The participation in the internal market of the national industry rises significantly obtaining a dominant position in the case of seeders and agricultural implements. In the case of no-till farming seeders or sprayers, either they are pull-type o self-propelled; the position in the national industry acquires a share of over 90% of the market.

The export of this technique to many countries of the region such as Venezuela, Uruguay, Brazil, Paraguay, Bolivia and Eastern Europe; has increased in the last years the export of agricultural machinery from our country to those destinations.

Currently, the production system is characterized by more than 730 companies, 290 of which are agro part companies and 440 terminals of machinery and implements, with an average of over 30 years of seniority in the industry.

Many of them emerged as family business that then grew and have between 100 and 120 employees, focusing on the manufacture of components, tools and agro parts. On the other hand, we see a second group of companies that employs more than 150 people, such as Agrometal, Metalfor, Mainero, Don Roque, Giorgi and John Deere, from national or international capitals, with capacity to manufacture engines and develop new products that have reached high competitivity.

Among the Argentine products wanted internationally, the following are at the top of the list: - seeders and fertilizers (843230) - Presses (847989) - Manual devices and pumps to project, scatter or pulverize, used for agriculture or horticulture (842481) - Parts of machines and devices for agriculture, horticulture and forestry (843290) - Combine Harvesters and threshing machine (843351) - Tractors (8701)

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Apas Fair 2011

A great opportunity to learn what consumers need and want Sao Paulo, Brazil 9 - 12 May Supermarket industry The Congress on Management and the International Business Fair has a tradition of many years gathering thousands of participants and specialists to discuss issues of interest for the sector. The objective of the Congress is to introduce the best practices used and offer professional retailers opportunities to widen their knowledge and intensify the relationships between supermarket businessmen and suppliers. Beyond any doubt, Apas was a great opportunity to exchange experiences and information about the sector.

The Fair gathered suppliers from the complete supply network and supermarket businessmen during four days, and it constituted the occasion to relate with big national and international names in technology, innovation, products, services and trends that directly impact on consumers.

The Association of Sao Paulo has been working for more than 30 years committed to the development of an important participation in this sector, with the purpose to fulfill the wishes of consumers, promote and improve the relationship between suppliers, supermarkets and consumers.

Participation in Apas is useful to learn about wants, needs and wishes of consumers, to know deeply the behavior of persons at points of sale and have a clear perception of the market in Sao Paulo.

Within the framework of international fairs, Fundación ExportAr together with Proargex coordinated the participation of Argentine companies in “APAS – 2011 – 27º Congress on Management and International Business Fair of the Supermarket Industry”, the most important Brazilian event of this sector and one of the biggest in the world.

The fair was held, like every year, at the Expocenter Norte location – one of the biggest exhibition premises in the country. In 10

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this edition around 70,000 professional visitors – entrepreneurs and executives – importers and distributors of the supermarket and retail sectors from Brazil attended the fair.

In this context, Argentine companies appreciated this ideal occasion to make contact with national and international renowned companies not only from the food sector but also from the cosmetics, hygiene, technology and services as well.

Apas 2011 was set up over a surface of more than 68,000 m2, divided into 4 pavilions, accounting for a surface increase compared to last year; where more than 550 national and international companies exhibited products, equipment and services.

The Fair had outstanding professional and organization levels.

As in the former edition, there was a special space named “Arena do Conhecimento” for learning practical routine issues. The motto of this edition was “Innovation. Simplifying lives of consumers”, likewise the fair continued with the concept of sustainability from last year, and implementing measures towards reducing the impact caused to the environment. For instance, the credentials and stationary of the fair including the catalog were printed in recycled paper.

This year there was a great increase of international pavilions.

Likewise, in addition to those countries that have been participating in the last years, such as: Argentina, Germany, Portugal or Peru, other countries such as Costa Rica, Colombia, Ecuador and Paraguay participated for the first time. The rest of exhibitors were Brazilian companies which came from different Brazilian states.

During the Conference Program, there were discussed topics such as: merchandising, marketing, consumer habits, strategy and management, branding, loyalty programs in stores and sustainability.

According to the information provided by the organizer at the end of the fair, it was estimated that 5,000 billion reals were traded during the fair.

hibitors was mainly companies that are already working in the Brazilian market and go to Apas since it constitutes a platform for doing new business.

Taking into account the characteristics of the market and the close bond with this partner of Mercosur, this fair was a great opportunity to transact and do business with Brazil.

So forth, participating in this exhibition allowed Argentine companies to do future export transactions for 10 million dollars.

Argentine Participation

Fundación ExportAr together with Proargex coordinated the participation of 22 companies in the Argentine Pavilion over a surface of 195 m2, double the surface than in the former edition, located at the White Pavilion and divided into six isles.

Most of the companies organized tasting of products at the pavilion, so visitors that came by were able to taste olive oil, olives, toasts and bread sticks, wine, mate, cookies, puddings and scones, dulce de leche, jams and preserves, among others.

During the event, Brazilian businessmen, mostly importers and distributors, who had been previously invited by the Fundación, came to visit the pavilion.

Commercial Results

As regards immediate commercial results from the 22 participating companies, 7 of them have done export transactions during the fair.

Regarding commercial contacts, Argentine companies made contact with around 800 entrepreneurs that encourage prospects on future sales.

The objectives of Argentine companies by participating in this fair were: positioning in the market, seeking distributors, doing sales, strengthening previous commercial bonds, introducing new products, approaching the market. The profile of the ex-

Argentine Participating Companies and Entities:

• • • • • • • • • • •

RODUCTORES DE YERBA MATE DE SANTO PIPÓ SCL LA SALAMANDRA S.A. SUGAR AND SPICE SRL INDUSTRIAS ALIMENTICIAS MENDOCINAS S.A. INSER SA KISKALI S.A LA RIOJANA COOP. VITIVINIFRUTICOLA DE LA RIOJA LTDA. AIMURAI S.A. NOAL S.A. GRUPO DULCOR

• • • • • • • • • • • •

AGENCIA PROCORDOBA SEM ANGEL CAMACHO ARGENTINA S.A. AGRO ACEITUNERA S.A NUTRIFROST S.A. INDUSTRIAS TOLEDO GOBIERNO DE LA PROVINCIA DE ENTRE RIOS BLUEBERRIES SA TRADE FOOD 2005 S.R.L. LABORATORIOS PHARMAMERICAN S.R.L. BRIOSH S.A. GREPAL 3 ARROYOS

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Opinion | María Cecilia Nahón

Promotion of productive investments in Argentina: objectives and actions María Cecilia Nahón, Undersecretary for Investment Development of the Secretariat of International Trade and Economic Relations, talks about achievements and projects in the forefront of that sector of the State Department

Creation of the Undersecretariat for Investments Development.

On August 27, 2010, through the decree 1187/2010, the Undersecretariat for Investments Development was created in the framework of the Ministry of Foreign Affairs, International Trade and Worship of the Nation (MRECIC), transferring the competences of the former National Agency for Investment Developments (ProsperAr). By transferring the functions of promotion, attraction and generation of investments under the scope of the MRECIC, a new key role was added to the tasks of promotion of exports and international negotiations carried out by the Argentine Chancellery in the economic field.

An integrated long-term vision.

Investment is not only a component of the added demand- and as a result- one of the decisive factors of the level of the product in the short term, but also a critical factor to increase the production capacity in the long run. Therefore, the incorporation of this new function into the Argentine Chancellery strengthens its contribution to the development of our country’s economy in the long term, and strengthening the current growth process. Likewise, carrying out the investment promotions and commercial promotion tasks from the same institutional framework, allows for the capitalization of existing synergies, at the same time that it pays attention to specific nature, dynamics and interlocutors of each one of these functions.

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An expert in economic development with teaching experience.

María Cecilia Nahón, is the Undersecretary for Investments Development of the Secretariat of International Trade and Economic Relations. Regarding her professional training, we must point out that she obtained her Undergraduate degree in Economy from the University of Buenos Aires, and her Master of Science in Development from the London School of Economics, and she is applying to the PHD by FLASCO. She is an expert in economic development with vast teaching experience and professional academic publications in specialized magazines in the country and other countries as well.

Functions and competences of the Undersecretariat for Investment Development

The “second generation” strategy for investment development.

According to its creation Decree, the main functions and competences of the Undersecreatariat for Investment Development are: i) designing and executing instruments for international promotion of investments in our country and the international expansion of local companies, ii) working as the “One stop shop” for foreign investors; iii) advising and facilitating projects of foreign investment, coordinating its actions with areas of competences providing direct assistance to the investor; iv) articulating with the provinces and the municipalities for fostering foreign investments, aimed at obtaining its fair land distribution and prioritizing the constitution of strategic alliances among local and foreign companies.

The new macroeconomic scenario gave room to a “second generation” strategy for investment development, paying attention to the quality of the investment and its productive nature. That implied progress from a general strategy of investment promotion to a proactive strategy focused on concrete investment opportunities, working in synergy with national ministries, province governments, Argentine representatives abroad and the private sector. The current strategy intends to identify joint tangible investment projects whose execution demands for capital contributions, technologies, productive know-how or general skills abroad, improving the productive capacity and strategic partnership with local actors over a mere “change hands”.

Foreign investment as a complement of domestic investment.

The current investment development policy has a completely different approach to the one used during the 90’s. In the current framework, characterized by productive investment rates historically high, foreign direct investment (FDI) has become a complement to the domestic investment, both public and private. Instead, during the convertibility years, the attraction policy of FDI was part of a broader policy of looking for foreign investments of all kinds, necessary to compensate the structural deficit of the current account. From the year 2003, the effect of a macroeconomic regime different and favorable to production, characterized by policies of internal demand strengthening, and by a competitive and stable exchange rate, rapidly benefited to obtain structural surplus of the current account, which allows seeing foreign investment not only as a need but also as a factor that boosts domestic investment.

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Opinion | María Cecilia Nahón

Tools and instruments for the investment development.

This strategy is carried out through three main tools. The first one is the Productive Investment Opportunities Database (BaPIP for its acronym in Spanish), an online database of investment projects on the portal of the Undersecretariat for Investment Development (http://bapip.inversiones.gov.ar) whose goal is to facilitate the link between potential investors from the entire world with the existing variety of investing opportunities in Argentina. For these purposes, the Undersecretariat is constantly gathering investment projects throughout the country jointly with national ministries, provincial governments and the business community to nourish said platform.

Secondly, investment promotion activities are carried out abroad, both punctually as well as permanently. Punctual ones encompass the execution of Multi-Sectoral Investment Missions (MIMs) to countries selected according to their importance as origin of FDI. During the MIM, aside from carrying out a “Seminar of Business and Investment Opportunities in Argentina”, there are other sectoral rounds to present investment projects to counterparties specifically identified. During the current year, there have already done MIMs in Kuwait, Qatar, Turkey, Israel, Mexico, Italy, Germany and Netherlands, at the same time that they plan to visit China, Chile, Brazil, the US, Canada, France, Spain and the United Kingdom. Permanent investment promotion encompasses activities from the 130 Argentine representations abroad, which have a full work agenda, including meetings with directors of head offices of transnational companies and with intermediate institutions (chambers of commerce in the industry; business entities; investment banks), seminars about investment opportunities in Argentina, and the presentation and dissemination of the BAaPIP.

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In the third place, promotion actions are boosted by direct assistance services, free and customized to potential investors aimed at influencing positively their decision to establish in Argentina, and eventually, facilitate the realization of their investment project. For that end, the Undersecretariat for Investment Development offers a single contact point for foreign investors, offering professional services in all stages of the investing process, from the evaluation of the project to the post-investing stage, including the work of facilitating the investments coordinated with other national, provincial and/or municipal public sectors, as well as the Argentine representatives abroad.

Challenges.

The creation of the Understecretariat for Investments Development is enshrined with a view, more and more expanded internationally, that the State has to foster actively the designation of productive investments in the country. This view entails some important challenges. On the one hand, the design and implementation of proper instruments to contribute for localization of more and better investments in Argentina. And, at the same time, the dissemination of these activities in the local and international investment community to work jointly towards our ultimate end: contributing to the sustainable development of the country with equity and social inclusion.

Interview | Natalia Bosetti

The evolution of ExportAr is seen in the permanent adaptation of its actions of promotion In this News section where we always give space to former employees of ExportAr to tell their experience in the Fundación and say how they have grown professionally, it is the turn of Natalia Bosetti, graduated in Foreign Trade.

- When and in which way did you have the possibility to enter the Fundación?

- I joined ExportAr in October 2004, through an internship by an agreement between Fundación Bank Boston (now Standard Bank Foundation), where I studied Foreign Trade.

- What was your position?

- During three years, I was in the area of Technical Assistance to Companies (ATE), taking consultations from companies and organizing business agendas in foreign countries, then in the area of Business Missions, during one year. Although in ATE I started attending general consultations, I then developed specifically in different sectors, like clothing, leather goods, shoes, among others, with whom I continued working later when I changed sectors.

- What did the Fundación teach you, both at a personal and professional level? What specific knowledge have you acquired during those years?

- I think that working for the Fundación taught me a lot of things. Since it was my first job, I mainly learned to behave within a working environment. Also I learned to be part of a team, the importance of collaborating with my coworkers and managing my time to perform the tasks of the day. Moreover, since the Fundación offers various training courses, I had the chance to earn experience delivering speeches to companies that wanted to export, and therefore acquire more confidence in public speaking. I would have never imagined myself doing that at first.

- How do you think ExportAr has evolved?

- I think that the evolution of Fundación ExportAr can be seen in the constant adaptation of their promotion actions and the information it offers, thanks to the experience acquired in the promotion of exports. This lets them help Argentine companies that are exporting or want to start exporting in a better way, with tools more adjusted to the need of Argentine companies.

- In which company and sector do you currently work?

-I’m working in Pelikan Argentina, a German company dedicated to the commercialization of school and office items, in the purchase area and foreign trade. Among my tasks, there is the follow up of import and export transactions of the company, being in permanent contact with providers, customers and different agents of the foreign trade.

- What are the main differences and similarities when evaluating the work that you are developing in a private company compared to the one performed in ExportAr? - When comparing the job I used to do with the current one, it is easier to find differences and similarities. Before, I used to assist companies that wanted to export, whether providing them business information, managing a business agenda with potential buyers abroad, or developing promotion activities.

Today I’m on the other side. I work in an export/import company and I have the opportunity to carry out tasks related more to the operative aspects of import and export. However, I find a common thing between the two, and it is that both jobs are done in the framework of foreign trade and day-by-day, I handle the same information about market and standards that regulate this activity.

- How do you see Fundación ExportAr from the outside?

- Although I haven’t had the opportunity to go to the Fundación until now, as I belong to the private sector, from my position, and thanks to the opinion of colleagues who have resorted to their tools, I see ExportAr as an institution very committed to the development of the Argentine exports, not just because of the work done with those companies who have never exported, offering them business information and training courses, but also because of the constant development of promotion tools for those companies who already have some experience and want to enlarge their portfolio in international markets.

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Promotion of services

Medical Tourism: professional proficiency and natural attractions In an industry that grows exponentially, our country offers toplevel doctors and institutions. That is also boosted with the touristic wealth.

In the area of Promotion of Services, Fundación ExportAr has been working actively for years in the so-called “health tourism” or “medical tourism”. It is an industry that, in 2009, was already generating between 20 and 40 billion dollars internationally. That year, more than 4 million patients traveled throughout the world looking for therapies and relaxation.

During the period January-November of that year, the National Secretariat of Tourism recorded in Argentine airports the income of 5,742 foreign patients (0.3% of the total incoming tourists). It is worth pointing out that there is no record of patients that came in by land from neighboring countries, which would increase that figure significantly.

The capital offered by Argentine medicine is invaluable: excellent institutions, prestigious professionals and cutting-edge technology. Moreover, the hospital capacity allows us to assist all kinds of conditions and illnesses, both of low or high complexity.

Argentine researchers and professionals are required by the elite of the world most distinguished centers and universities. They head congresses and participate in crucial research and initiatives for the wellbeing of the world population. The letter of introduction of Argentine medical excellence is vast and includes Nobel prizes, like the doctor and physiologist Bernardo Houssay and the doctor and biochemist Luis Federico Leloir, whose most relevant contribution focuses on the study of nucleotide sugar and allowed for a better understanding of galactosemia.

Important research institutes, like the National Scientific and Technical Research Council (CONICET for its acronym in Spanish), and the Institute Leloir, set the pace for the production in that field. Their members keep adding scientific papers in specialized issues with highest world prestige and they dare to make progress in potential treatments against Alzheimer, Parkinson’s and different types of Cancer, among other conditions. They are part of a huge universe in which Argentine medicine keeps strengthening and developing. In all areas and specialties (cardiology, ophthalmology, dentistry, plastic surgery, reproductive medicine, clinical medicine, etc.) Argentina keeps working to spearhead and position itself at the forefront in many cases.

At the same time, our country offers cultural and artistic wealth

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and a great variety of landscapes that make it an attractive destination for inhabitants from all parts of the planet. The eagerness to see tango from a close distance and visit emblematic places related with its history; the interest in walking around Buenos Aires, seeing the waterfalls, the glaciers… there are innumerable reasons to have the desire to visit Argentina. That is why ExportAr tries to take advantage of that magic combination (excellent medicine plus touristic attraction) to capture more patients/tourists every year.

In this framework, the “Argentine Chamber of Institutions for the Promotion of Health” (CIAPS for its acronym in Spanish) was created this year. This is the result of the work carried out during 4 years together with the group of health institutions, who are the founders of the Chamber: Dental House, Instituto Cardiovascular de Buenos Aires, Xetica Argentina, Clínica de Ojos Nano and Clínica Robles.

Two years before, the Program of Sectoral Promotion had been introduced, with a market research of the four countries from the sector with exporting experience of medical tourism services. Under the motto “Argentina Health Care” the delegation of institutions, coordinated by our Fundación, participates in the Annual Medical Tourism and Global Healthcare Congress, where we also have the collaboration of INPROTUR. The promotion activity had two key scenarios: Costa Rica and Murcia, where ExportAr was present together with distinguished institutions.

In the first meeting, seven Health institutions participated: Dental House, Sanatorio Francés, Clínica Bazterrica, Posada Quenti Spa (Córdoba), Sciavelli Implantes, Hospital Británico and The Chamber of Argentine Institutions for the Promotion of Health.

Our participation was as “gold sponsors”, we had an institutional stand and organized a lunch for 300 people. Ana Prieto, president of the Chamber, gave a speech. She emphasized the quality of Argentine institutions and professional doctors, at the same time that a screen showed images associated with tourism and Nobel prized compatriots.

Twenty-five buyers attended this congress, most of them from the United States, reason why the event was very important for

our institutions to show their excellent qualities and advantages regarding price.

To give an example, Dental House performs 2 thousand implants per month and has its own labs. Its quality level is topnotch and its prices are unbeatable. While in Europe, each implant costs around 700 Euros, this institute can do them for barely 100 Euros.

Furthermore, Dental House and Sciavelli Implantes signed a partnership agreement with Dental Group from Costa Rica.

Our institutes were also able to show their know-how, which in the future can allow them to export it as a service. This is another vein that opens and that we are supporting from the Fundación.

Another relevant event took place in Murica, during the 6th Congress of Health Tourism, in which ExportAr was present together with Dental House, Sanatorio Francés, Hospital Británico, Hospital Alemán, Clínica Robles, Sciavelli Implantes and the Chamber, represented by Dr. Ana Prieto.

There were over 70 buyers, coming from Asia, Europe and Africa. Meetings were celebrated during two days and each national institution had about 20 encounters, very productive for the future.

ExportAr, taking into account the exportable offer and the profile of each institute, organized meetings (matchings) with eventual buyers.

distance, but it was emphasized over the great advantages offered by Argentina. In dentistry, for instance, the price difference is enormous. In complicated surgeries, the optimal environment for rehabilitation was highlighted.

As to future actions, ExportAr is participating for the third consecutive year in the “World Medical Tourism & Global Health” Congress, which will take place in Chicago, United States, in October 25th- 28th. This initiative has the objective of deepening and broadening the dissemination of this new service provided by prestigious Argentine institutions abroad and positions the country as a destination for International Medicine.

The MTA (Medical Tourism Association) is the first non-profit international association, formed by international prestigious hospitals, health-care providers, insurance companies and other affiliated companies.

To optimize promotion, 15 Argentine companies will participate together as SILVER SPONSORS. The activity will take place in the Marriot Renaissance Schaumburg. Also bilateral meetings will take place, complemented with audiovisual presentations. A tango couple will dance and an Argentine lunch will be offered to achieve more dissemination of the national presence at the congress.

In short, our country offers this service, knowing for sure it has two strong aspects. As regards health: quality and excellence, in addition to the favorable prices. And regarding tourism: the magical diversity of attractions to satisfy all tastes.

There was also a presentation, within an exhibitor’s panel, held by Carlos Treseira, member of the Chamber. Images of tourism and icons of our culture and sport were shown (Nobel prizes, Maradona, Messi, etc.).

Fundación ExportAr sponsored- together with the INPROTUR- an outdoor gala dinner for 200 people, where a dancing couple delighted the audience dancing tango and the waiters were wearing Argentine aprons. At the same time, the dinner was a good opportunity to discuss business.

In the case of this market, the difficulty arises from the long News

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Opinion | Aldo Ferrer

Optimal production structure The most appropriate production structure is that which satisfies two basic conditions. On the one hand, it should incorporate frontier knowledge and its permanent transformation in the use of available material and human resources. On the other, it needs to establish an unsubordinated symmetrical relationship with the global economy. These two conditions mean that the fundamental aim of social inclusion through an increase in employment, training of the labour force, and productivity and real salary increases can be acomplished.

The country’s development depends on applying science and technology to production. Increases in productivity, employment and social well-being require to make necessary the permanent incorporation of innovations in production processes and in the quality and versatility of the goods and services that satisfy both consumer and investment demand and exports. At the same time, for this to be possible, autonomy must be maintained in the design and direction of the national economy. The effective exercise of sovereignty is an essential requirement for development. The form in which the country relates to the rest of the world through what it produces, exports and imports, determines whether it can or cannot disseminate technology and set in motion the long-term processes of accumulation of capital, knowledge, management, resource organisation and education, which are the very essence of economic and social development.

The same thing happens with the macroeconomic balances required to sustain policies which defend the country’s interests.

For all this to occur, the best possible production structure is a fundamental requirement.

The extraordinary current dynamism of rural production and the agro-industrial chain have become important factors in how

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these questions are settled. The expansion of world markets as a destination for agro-industrial exports is accompanying the growing trend among the business class to apply advanced technologies (no till farming, transgenic seeds, agro-chemicals, etc.). In fact, much of today’s agricultural activity operates on the frontier of knowledge, to such an extent that one speaks of precision agriculture, in which cutting-edge technologies are deployed in every area, from biotechnology to microelectronics and information technology. The result is an astonishing increase in production and exports, and it has introduced an important favourable dynamic factor into the country’s development.

The agenda for the future includes boosting social inclusion in agriculture through the full development of regional production, the integration of value chains, the protagonism of national enterprises in the production of inputs and equipment incorporating technological change, and technical and financial support for rural SMEs and family businesses in order to help them become profitable and competitive production units.

However, is the agro-industrial chain sufficient for full employment of available human resources with growing pay? Can technological development rest on the technical sophistication and competitive capacity of a single sector? The answer is no. Firstly, because the agro-industrial sector directly and indirectly employs around 1/3 of the economically active population. Therefore, full employment of human resources requires other sources of labour for which a broad-based industrial economic structure is necessary, together with knowledge-bearing services and modern forms of organisation. Secondly, because science and technology are linked to the existence of an integrated and complex production base embracing the sectors that drive innovation in frontier areas such as biotechnology, microelectronics, information technology,

new materials and their close association with basic sciences. The full development of a national science and technology system and the production of machines and equipment incorporating the latest innovations cannot be based on the dynamism of a single sector, however advanced the technology it employs, as currently happens with agro-industry. Lastly, because the demand for goods and services constantly changes in composition, and technology generates new products and services, permanently transforming production and the allocation of capital and labour.

The only way to respond to changes is to have a diversified, complex and flexible structure. If production is concentrated in only one or a few sectors it is unable to respond to the relentless changes in the modern economy.

Today, the improvement in prices of foods and raw materials of agricultural origin, minerals and energy has reopened the debate on the role of the production and international trade in primary products within the development process. It is usually claimed that while computers and electronic products fall in price and cereals rise, the terms of exchange now favour the latter. This would seem to imply that industrialization is no longer an essential condition for development. However, what is fundamental is remuneration based on capital and work in each activity. Profits and salaries paid in the products derived from microelectronics may increase despite a fall in the prices of the end products because productivity in the sector rises, costs fall more than prices and growth generates external economies throughout the economic system. In short, the important thing is whether or not the country’s insertion into the international division of labour brings about the formation of a modern, efficient and competitive production structure able to open spaces of profitability and to pay growing real salaries throughout the production system.

Returning to the example of microelectronics, its incorporation into a production system is essential in broadening the sources of innovation and in gaining access to the most dynamic production.

If Argentina had not dismantled a large part of its electronics industry in the period following 1976, today we would be producing and exporting millions of mobile phones instead of importing them, spending hundreds of millions of dollars and wasting an important source of innovation, employment and profitability.

Competitive advantages emerge from many sources but, above all, from knowledge and innovation. Argentina needs to make the most of the advantages provided by its natural resources and its talent for exploiting them but, also, the multiple innovations that can only emerge from a diversified, complex and flexible production structure.

Experience at home and abroad reveals that such a structure is vital in bringing social inclusion through employment, education, increased productivity and real salaries. In such a scenario, public policies have the resources required to protect vulnerable sectors, ensure the progressive redistribution of income and environmental protection.

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A success story

Globant Information technolofgy Eight years ago, four engineer friends got together with the idea of creating an Argentine multinational company that would provide IT services to the US and Europe. Since 2003 to date, these four professionals from La Plata developed a booming company that today has more than 2,000 employees and an annual turnover close to 60 million dollars. To have an idea of what they have achieved, suffice it to say that Google, Cocacola, Linkedin and Electronic Arts can be found among their customers. And they have constituted case studies for the University of Harvard and the World Economic Forum.

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Martín Migoya, Guibert Englebienne, Martín Umaran and Néstor Nocett are the engineers who, back in 2003, thought about benefiting from the comparative advantages that LatinAmerican was offering in general and in our country in particular to provide IT services to companies in the US and Europe.

“The four of us had worked in many other countries and saw that the outsourcing movement was growing more and more.

We thought it was an interesting model to pursue and saw conditions to go towards that market”, says Néstor Nocetti, one of the founders.

“There was an untapped pool of resources: the little time difference with the United States and Europe; the prestige of the Argentine professionals due to their training and proactiveness and low costs. Internet’s dynamics took the competitive advantage away from India due to their huge time difference.

In Argentina, on the contrary, we can work online with both coasts of the US and with Europe due to our very little time difference with them”, says the businessman, who now also highlights that the “cultural affinity” is another element that favors Latin-America over India.

“Our first client was EMC, from the United States. At first we were responsible for maintaining their website, but the services we rendered them were growing more and more”, says Noocetti. When asked if Globant can be considered as the pioneer company in providing IT to the First World, the engineer answers: “We were definitely the first ones focusing con companies abroad”.

To have an exact idea of what Global represents in the outsourcing world, and of how proud we Argentines should feel for having companies of this level, it is worth pointing out that their story became a case-study for many prestigious institutions: Harvard Business School and the World Economic Forum, together with the University of Stanford and Endeavor Global.

Harvard Business School published the business case about Globant where they give a description of their history, present and strategy of the company.

The case was produced by Mukti Khaire, Gustavo Herrero and Cintra Scott from the Harvard Business School (HBS) and lists some of the challenges that the Argentine company faces on its growth and expansion way. The study was presented to more than 150 students of the second year of the MBA at HBS and had the participation of Globant founders, Martín Migoya, CEO; Martín Umaran, COO; Cuibert Englebienne, CTO; and Néstor Nocetti, VP Innovation Labs.

On the other hand, the Argentine company was also selected as a case study in the report Global Entrepreneurship and Successful Growth Strategies of Early-Stage Companies, done by the World Economic Forum together with the University of Stanford and Endeavor Global.

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Since the four founders of the company are from La Plata, they have a federal vision. “We always suffered the fact that in order to develop professionally one had to go to Buenos Aires. That’s why we decided to open our development center in Tandil, Rosario, Córdoba, Resistencia, Bahía Blanca and of course, in our city La Plata. We also have centers in Montevideo and Bogotá”.

Nocetti emphazises that the company has a brave profile: “We never agreed on being a stable company size wise. When a company grows it’s because it’s doing things right. Our approach was to take calculated risks, reinvest the profits and grow”.

Another interesting piece of information about Globant is that it never resorted to intermediaries: “We always sold directly.

When we first started, two of the partners traveled to offer our services and the other two stayed here working. Our first big client was “lastminute.com”, from London. They are a company who auctions last minute flight deals and needs to be online always in order to develop its business. A characteristic of this company is that their staff tends to go to other companies. As a result, these professionals who migrated to other places, recommended us. The word of mouth was our best way of promoting ourselves and helped us grow”. Members of Globant travel a lot in order to meet the client and learn about his interests. There is also part of the team who works at the client’s office. That allows us to solve problems immediately and to have a good relationship.

Regarding how they got to be Google’s client, Nocetti tells us: “Google England chose one of our projects in 2006. Among all the applicants, we got to the final stage together with two American companies and they chose us. That gave us great momentum. Another fact that gave us spirit was getting involved in the gaming industry, in 2009. Both in testing as well as in development”.

Last year Globant performed an internal restructuring. The 22

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company was divided into 8 departments, each of them focused on a specialty. The idea is to improve the performance in each of the areas in which the company offers its so wanted services.

“In order to keep growing, we participate in job fairs at Universities, in events that we organize ourselves and also in international fairs”, explains Nocetti. “With the support of Fundación ExportAr we participated in the World BPO/ITO Forum 2011, in New Jersey. The assistance provided by Funación ExportAr is very important for our country to keep growing in the provision of IT”.

Globant also has an original way to select employees. Some time ago they placed an ad on the newspaper La Nación, that read, “we are looking for talent”, without mentioning the name of the company. In order to be able to send a resume, candidates had to solve a series of riddles that were published during 6 Sundays in a row. They were harder and harder and there were even websites in which people gave possible answers. And everyone knew it was Globant, but the company kept the game and didn’t say the name publically until the last week.

Regarding goals, Nocetti highlights that the idea is “to reach 90 million dollars of profits”. He also reveals that they will keep acquiring companies to create synergies. In this regard, they have the ambition to buy an American company to have a foot in a development center in the United States. “80% of our clients are from the United States, but we also work with companies from England, Canada, Singapore, among other countries”, Nocetti points out.

Argentinas innovation for export Ministerio de

Relaciones Exteriores, Comercio Internacional y Culto News

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Promotion of Services

MICA A party of diversity, innovation and culture From June 2-4 of 2011, in Tribuna Plaza of the City of Buenos Aires, MICA took place, an unprecedented initiative in Latin America. This cultural free market made of over 100 stands of business chambers and SMEs from the whole national cultural industry (publishing, audiovisual, performing arts, design and videogames) aimed at positioning the sector of Argentine cultural industries in the global market. The Argentine Chancellery organized the business space, through Fundación ExportAr. The Argentine Cultural Industries Market (MICA for its acronym in Spanish) was the first space in our country where all the different branches of the Argentine cultural industry converged in one single place, with the aim of generating business deals, exchanging information and presenting their production to key personalities from all around world. Audiovisual producers, record companies, publishing houses, videogames and performing arts producers and designers, had the chance, during four days, to meet with the world’s top Cultural Industries companies and to create new business opportunities.

MICA contained over 100 exhibitions stands from the entire sector, represented by business chambers and SMEs from the whole country and over 200 personalities from abroad, thirsty for cultural exchange with the Argentine cultural industry.

The participation was free and had the cooperation of the main referents of the sector to reach the world’s most important businessmen, producers and journalists.

MICA was aimed at positioning the Argentine cultural industry sector in the world market, accounting for its quality and competitive prices, and at the same time it was designed to attract and invite SMEs from the different provinces of the country to showcase their production in this federal space and interact with representatives from the various local companies.

MICA boosted the generation of contacts and businesses and the positioning of the sector in the country and in the world. The space opened its doors to the general public during the last two hours of each day, closing everyday with different massive shows that at the same time showcased the quality of our spectacles.

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Rodolfo Hamawi, National Director of Cultural Industries, thought the initiative was “a party of diversity, innovation and culture”.

Fundación ExportAr organized the setting of the business space, together with the National Secretariat of Culture. Over 200 international guests had the chance to have business meetings with local producers, in order to generate new opportunities for cultural industries and their international projections.

Fundación ExportAr had its institutional stand located in the main sector of the exhibition that attracted a large number of people. There, videos were broadcasted in huge screens showing the present cultural scenario, produced by students of Graphic Design, from the School of Architecture, Design and Urbanism (University of Buenos Aires).

The initiative was organized by the Ministry of Foreign Affairs, International Trade and Whorship, Fundación ExportAr, the National Secretariat of Culture, ProARgentina and the National Ministry of Industry and the Ministry of Tourism.

Aníbal Esmoris, Executive Producer of MICA, said “culture represents a creative, versatile and sustainable sector that starts playing an important role in the national production development”.

AUDIOVISUAL SECTOR The audiovisual sector comprises films and TV. If we talk about the film industry, we can say that the national production has registered a sustained growth over the last 15 years. In 2009 particularly, 77 national films were produced, a historic figure. In 2010 there were 983 screens distributed in 432 Argentine movie theaters.

Regarding TV, there are 45 over the air networks today. An important piece of information indicates that in Argentina 98% of homes has one TV device. All this gives a glimpse of the importance of the TV industry today and its relevance in cultural consumptions of Argentineans.

Edgard Tenembaum works in a French production company called “Tu Vais a Voir”, producer of the well-known “The Motorcycle Diaries”, is currently co-producing an Argentine film and visited the MICA looking for new Argentine “partners”.

Tenembaum was born in Rosario but has been producing in France for over 20 years. “I like a lot working with Latin America and every time I can I participate in meetings”, said the producer, who confirmed that is currently co-producing an Argentine film

by Pablo Reyero with local actors. Tenembaun added: “I love Argentine films and they are well known in the entire world due to their great quality”. The producer tells us that he worked in Argentine movies like “Buena Vida Delivery” (Leonardo Di Cesare- 2003) and “Por tu culpa” (Anahí Berne- 2010) and that is currently working with Pablo Reyero in the movie “Escapando”.

He is one of the directors of the French production company “Tu vais a voir”. He explained about his work: “I’m one of the directors; we produce European movies and also have editorial development of movies with Latin America”. Tenembaum

confirmed that there is a market for this type of films in France.

“It’s small but it exists”, he assured. In this regard he highlighted the success in his film of the Academy award-winning movie “El secreto de sus ojos” (Juan José Campanella- 2009), as best foreign picture. “The film was seen by more than 500 thousand people in France, which is a lot”, he pointed out. Likewise, he named Pablo Trapero as one of the many Argentine directors who are well known in France. About his work in the movie “Motorcycle diaries” (Walter Salles- 2004) he said that although it was a completely European production, it was shot in our country mostly with Argentine actors, apart from the Mexican actor Gael García Bernal.

Wilbur Leguebe, is Responsible for Documentaries in the state TV in Belgium. He visited the MICA during his second trip to Argentina, looking for Argentine films.

Wilbur Leguebe told us that for Belgian state TV, is very common to coproduce documentaries with other countries. “We look for co-productions or acquisitions of documentaries in the areas that we have on air: research, history, trends”. Leguebe explained that with his budget he always supports independent Belgian production companies and it also lets him partner with other production companies in the world.

About the MICA he assured “I’m also looking for Argentine movies to buy”. Leguebe considered that “there are some important issues in Latin America that worry us like the history of Chilean miners” (referring to the 33 miners who were trapped during 70 days in the mine of San José, Chile, in August 2010).

The Belgian said that “the quality and creativity of Argentine

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products are very good”, and he added, “Argentine movies have topics that adjust or suit our audience”. Leguebe confirmed that the network has already done co-productions with Chile and Colombia so, after the MICA, the experience might be done with Argentine partners.

writer). Regarding dance, she showed particular predilection for Miguel Robles and assured that she is very interested in presenting one more time the group Tremor, in the context of electronic-cumbia in Mexico. “The rhythm is very present in the north part of Mexico”, she added.

PERFORMING ARTS

DESIGN

There are around 2700 performing spaces in Argentina, spread around the whole country. The city of Buenos Aires, considered as one of the most important areas offering national theater, has recorded a sustained growth in the amount of theatergoers, especially in the private sector. Already in 2002, there were more than 1.5 million theatergoers. By 2009, this figure grew and reached 2.5 million. We could say that the non-official amount of theatergoers in the City of Buenos Aires, increased 70% between 2002 and 2009.

Cristina King Miranda, from Mexico, producer and promoter of performing arts and music, confirms the success of the Argentine cultural expression in her country. The producer visited the MICA to add new proposals to her repertory.

Miranda directs a festival in Puebla, two hours from Mexico City, called Barroquísimo Puebla, and she also makes links of productions in other parts of the country. In her fifth visit to Argentina, she told us that she has had the privilege, to take, in many opportunities, Argentina artists from different spheres, to participate in different showgrounds and projects in Mexico.

For instance, in theater, “Timbre 4” with “Tercer cuerpo”, the music groups “Tremor”, “Quinteto Suarez Paz” and “Camerata Bariloche”, among others.

The producer expressed that “Mexico shows a lot of interest in Argentine art, there is a lot of knowledge in some branches but some collaboration is still lacking, as well as a cultural corridor between the diversity of performing arts and musical expression in Argentina towards Mexico and vice-versa”. Miranda disclosed that she has the intention to take the theater play “Amar”, by Alejandro Catalán, to Mexico and she showed great interest for the artist Lola Arias (writer, theater director, performer and song 26

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The design sector in Argentina has acquired great visibility. One of its indicators are the commercial areas such as Palermo and Recoleta, which recorded great growth in recent years with the peak of independent designers and the wide variety of the offer. Every year there are more and more design students in all different senses and the City of Buenos Aires was appointed as the “the first City of Design” by UNESCO. However, this sector represents a space difficult to restrict within the framework of Cultural Industries since it is an activity that comprises at the same time a wide variety of goods and services.

It is an area that adds symbolic and economic value to other activities.

A research carried out by the Center for Research and Industrial Development of the INTI shows that as of 2008 71% of the revealed companies have developed products or services with strong design. Furthermore, those new products meant significant increase in more than half of the cases and favored the opening of new markets in more than 40%.

Regarding international market, exports of goods with a high content of design have made a significant and increasing contribution to Argentina foreign trade. In 2007, they generated around USD 700 million with an increase of 40% compared to the previous year. The main exported products in 2007 within the industry were furniture (USD 115 million), leather goods (USD 108 million), garments and clothing accessories (USD 93 million).

PUBLISHING During the last decade, the production of Argentine books has recorded significant growth, both in the amount of printed copies and in quantity of registered titles. If we take the period

from 2003 to 2008, the amount of copies increased three times, from 38.1 to 97.1 millions.

Libros”, among others.

During the 90’s decade, if we compare it with the following one, it can be registered a transfer of volume from 50 to 70 million books per year.

María Teresa Carbano, Business Manager of the publishing company Imaginador, attended the MICA to generate new contacts and potential businesses. Carbano, who has participated in many Business Rounds organized by Fundación EportAr, told us that “Imaginador” sells in the national market and is also now exporting to Latin America and the United States.

Our country is well known worldwide for its great amount of bookstores, in fact today there are 2,377 registered bookstores throughout the country.

Antonio Ramírez is the representative of “La Central”, an important bookstore in Spain. In the MICA framework and during his first visit to Buenos Aires, he told us that the bookstore has been selling Argentine books for many years already.

“The Spanish market is not easy”, said Ramírez, “it’s a highly saturated market”. The expert explained that there is more offer than actual demand, which makes it very difficult for a publishing company from Latin America to enter Spain if it doesn’t have a headquarter or stable representation.

“There is a great crisis in Spain and we are not used to it”, he explained. Then, he added, “This led to part of the big groups to have lowered their publishing rhythm and abandoned some difficult topics and sectors”. He considers that it would be a good opportunity for Argentina to occupy those spaces that said groups left vacant. Ramírez explained that the industries that are first abandoned are the minority or most restricted ones “big groups with complex structure usually focus on what is more main stream, on what has massive demand, because there is less risk”, he pointed out, to then add that “philosophy, sociology and human sciences in general start being risky for these groups because they start not showing expected results”. The expert considered that, if from Argentina, country with great tradition in this kind of books, the production can be completed, then there will be another opportunity to enter the Spanish book market.

Likewise, Ramírez confirmed that the bookstore is already working with Argentine publishing companies such as “Katz”, “Cuenco de Plata”, “Hidalgo Ediciones” and “Las Cuarenta

“We’ve been exporting since 1997”, said Carbano, “that’s why we participate every time that there is an activity with Fundación ExportAr”. The manager said that in 2009 and 2010 the effects of the international crisis were felt, especially with the purchases to the United States. “Now they are recovering a little”, she expressed and she assured that the publishing company has not lost markets anyway.

Regarding selected topics, the manager highlighted the success of a Mandalas collection (chromatic energy, spirituality) developed by “Imaginador”. She also added that some of the most sold topics today are those related to spirituality and healthy life, as well as a universal classic collection, a new stamp created in 2009 that is also selling pretty well.

Source: Information disclosed by the development team of the MICA magazine.

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MUSIC There are 120 record labels in Argentina; while 4 of them correspond to big transnational corporations, the rest is made up of a group of independent companies that have smaller budgets and more restricted access to traditional promotion channels such as radio and TV. Towards the end of the 20th century, in a framework of constant technology breakthroughs, the music business started suffering strong changes. One of them was the fall of sales of physical formats (discs). To that, we have to add the expansion of Internet services and the reduction and spread of goods such as personal computers, Ipods, and CD recorders. An important piece of information indicates that 40% of registered music sales between 1997 and 2008, corresponds to local artists.

Jeffrey B. Clyburn works in New York, United States, in National Geographic Music. In the framework of the MICA and his first trip to Argentina, he highlighted the quality of local musicians.

Clyburn tells us that his objective for MICA is to reach other professionals from the music industry to work together, since he works in the music department of National Geographic. He confirmed that this label which was created in 2006, includes a music channel called Nat Geo Music, a brand of discs, publishing company, music supervision in TV programs and a website.

Clyburn considered that “Argentine’s musicians have amazing quality and creativity”. He mentioned that he had seen Paco Luciani playing the harmonica, whom he considered “one of the best musicians I’ve seen play that instrument”. The producer explained “we are looking for artists to represent and promote: they bring us their discs, we register them and promote them to the rest of the world”.

Finally, Clyburn assured that “the Latin American market is growing a lot and very well, surpassing the mainstream audiences”.

Nagumi Takahashi is part of “Ahora Corporation”, from Tokyo, Japan. Her company is already working with Argentine record labels, but is looking for new partners and also Argentine independent artists.

Takahashi said, “in MICA we are looking for potential partners to produce Argentine artists”. The production company assured that “Ahora Corporation” is already working with some Argentine record labels but announced that they are looking for more strategic partners with deeper knowledge of Argentine music.

“We’ve been working with Epsa Música and other smaller and independent record labels for 5 years and also with some artists directly”, said Takahashi.

Likewise, she expressed “we are looking for partners to coproduce music, since we have many music styles in Japan”. She assured that “We are interested in everything ranging from tango to new folklore”.

Regarding the market for Argentine music she said, “It is small but strong in Japan”. Takahashi explained that every year they bring one Argentine artist to Japan for a small music tour around the country. The producer explained that Argentine musicians have a lot of fans, especially among younger people. “They start becoming popular and I think this can grow with time”, she added.

The Japanese expert said that it was the third time that she came to Argentina and she considered “some of the new generation music in Argentina sound like the Japanese music”. She clarified “especially independent artists, not the most popular ones of pop and rock, but more specific artists who create their own music”.

Takahashi said that she is currently working with the Argentine artist Mariana Baraj. She expressed, “Mariana is a very special artist who makes a mixture of interesting diverse rhythms”. She confirmed that last year Baraj went to Tokyo and other important festivals in Japan. “Now we are looking for new young artists and talents”, she assured.

Native and resident from the province of Cordoba, Nadia Vidal is the producer of the music group Diente de León. She saw in MICA the great opportunity to approach international markets.

Nadia Vidal traveled to Buenos Aires for the first time to promote the group she represents. “Some producer friends from Buenos Aires told me about the MICA”, she said. “I’m manager and producer of the band Diente de León, selected to play in the show together with 15 bands”, she told us introducing it. Vidal confirmed that there are two bands from Cordoba that traveled to participate in the MICA. Likewise, the manager said that the band is 6 years old but hasn’t been able to play abroad. “The idea of the MICA is to be able to reach, on the one hand, places in Argentina where we haven’t arrived yet and then in other countries, the goal is to expand horizons”.

About the musical style of the band, she defined it as “Latin American fusion, between rock and native rhythms of Latin America”. Vidal expressed that “the idea of playing abroad has always been present but the possibilities have restricted us”.

The producer explained that the biggest issue to move the band abroad is the cost of fares.

“Traveling is a whole artistic movement, there are at least around 9 people, among musicians, sound technician, producers”, she explained, “it’s a great number and that’s why is difficult to leave the country”. Vidal showed optimism and assured that “it’s difficult to jump outside but we’re still working to make our work more and more professional in order to spread it”. On the other hand, she considered “these spaces are very useful for us, MICA represents our first time in Buenos Aires, which is an important event”.

Source: Information disclosed by the development team of the MICA magazine.

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Aira, Andahazi, Arlt, Bioy Casares, Borges, Caballero, Caparrós, Casas, Castillo, Cohen, Conti, Cortázar, Cossa, Filloy, Fogwill, Fontanarrosa, Fresán, Gelman, Girri, Guebel, Hernández, Jitrik, Kozameh, Marechal, Martínez, Mujica Láinez, Ocampo, Piglia, Pizarnik, Rivera, Sábato, Saccomanno, Saer, Sarlo, Soriano, Steimberg, Viñas, Walsh...

Argentinas culture for export FUNDACION

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Interview | Institute for Productive Development of Tucumán (IDEP)

A boost for the production in Tucumán Tucumán is considered a technologic, scientific and productive center in the Northwest of Argentina. From the IDEP, they foster, among other things, exports of the province, helping companies from Tucuman to improve their competitiveness. Moreover, the IDEP and Fundación Exportar work jointly to maximize this task through the recently inaugurated office of the Fundación in the institute.

IDEP (Institute for the Productive Development of Tucuman) is an autarkic entity, whose main goal is to foster investments in the province and exports, and encourage companies from Tucuman to enhance their competitiveness. In order to carry out this mission, it works hand in hand with universities and other knowledge and production related institutions.

The institution was created in 2005 and it is formed by a mixed board of director made up mostly of representatives of the private sector of production. Through the activities that the institution carries out day by day, the IDEP offers technical assistance to companies from Tucumán and helps them participate in national and international fairs that would allow them to generate new business opportunities. The IDEP is an office of the Fundación ExportAr in Tucumán, and together with that institution, they made it possible for businessmen from Tucuman to exhibit their products and generate new business agreements in international fairs such as Berlín Fruit Logística and Anuga (Germany), World Food Moscow (Russia), Asia Fruit Logistic (China), PMA (United States) and Expocruz (Bolivia). These are the most important multi-sectoral and foods fair worldwide, in which Tucumán managed to position their products thanks to the participation of local companies and the support from Fundación ExportAr. In order to be able to enter new markets, the IDEP also offers the necessary tools for companies from Tucumán to enhance their competitiveness. This is done through technical assistance and training, financing quality standard certification programs. The IDEP is also an office of Sepyme in Tucuman.

“The institution was created with the goal of fostering production from Tucuman. Our main task is to accompany small and medium producers in the growth and grant them 30

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Quesos de Tafí del Valle

the necessary tools to enter new markets. We can do all that with the support of institutions like Fundación Exportar, a very important organization for us”, expressed Juan Luis Fernández, Executive Director of IDEP. Fernández talked about the agreement that the institution celebrated with Fundación ExportAr with the aim of performing various trainings for producers and businessmen, whether in events that take place in Argentina, or those during international fairs. “In August we will carry out training for producers in the framework of the second edition of the fair Expo Lules”, exemplified Fernández. “We also work with the program Grupos Exportadores, thanks to which we managed to form the first group of avocado producers in Tucuman”, he added about the work done with ExportAr. Fundación ExportAr, together with the IDEP, participated for the first time in the Consejo Consultivo Aduanero (Customs Advisory Committee) and coordinated also the participation of companies from Tucumán in the Business Rounds that took place in the fair “Feria Puro Diseño 2011” (May 17-25, 2011, Buenos Aires) and also in the fair SIAL Mercosur of the Foods and Beverage sector (31st August to 2nd September 2011, Buenos Aires).

representation of this Fundación will take function. “For Tucuman it was very important to be able to recover and open the office to Fundación ExportAr in the province again, and do it in the IDEP even more, since both institutions have in their respective areas, similar functions”, expressed Mr. Fernández.

“Having an office of ExportAr gives us many tools. These can be conveyed to SMEs and the public in general who ask about business opportunities, profiles and market research, etc. Also, it let us offer trainings, business rounds and participate in fairs in which the province goes with the businessmen from Tucuman”, he added. “If we didn’t have the support of ExportAr, it would be very difficult to carry out this type of assistance to exporters from Tucumán”, he then added “We are convinced that working hand in hand and being having an office of ExportAr, we will meet our goals in the province, offering a better service for our exporting companies and the ones who want to start exporting”, concluded Fernández.

On the other hand, the special report of the province of Tucumán, with relevant information about the production, export and development of the province, has been completed

by Fundación ExportAr.

Last year, Fundación ExportAr rewarded the IDEP granting them an award in the category “Support service process to the exporter”.

Also, ExportAr has a significant participation in the Guía de la Oferta Exportable, the publication done by the IDEP that has the information of all exporting companies of the province.

On the other hand, it is worth pointing out that Tucumán recovered the office of ExportAr through the celebration of an agreement with the IDEP, in whose headquarters the News

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Interview | Carlos Torrico

The first thing a company has to do to enlarge its market is to train itself Lacking information and preparation often lead to failure when trying to conquer international markets. Internationalization should be the result of a planned and organized activity. Preparation is a previous requisite.

That’s why, Fundación ExportAr offers the Seminar “Primeros Pasos en la Exportación” (First steps in export), in which Carlos Torrico, consultant and trainer, shares his knowledge related to International Marketing.

- When is the ideal moment to start with the internationalization process?

- There are no ideal moments or one valid response applicable to all companies. There are different variables, reasons and circumstances to be considered. Sometimes markets get to a saturation point, and so entering a new one, is usually an option related to the company’s growth.

The company’s directors must be well aware that the decision of expanding at an international level is very important for the company. The process must be gradual, since foreign trade brings a lot of advantages but can result in great damages for those who lack knowledge.

The first thing a company that wants to expand their market has to do is train itself. This must comprise the entire company, starting from directive levels. Internationalizing the company implies changes, internal and external transformations and, to make that decision, the company needs to be prepared.

Directors must reduce change resistance from the personnel, explaining the benefits to be obtained and conveying calmness to face the new challenge.

They have to know how markets work, what the new rules of the game are, different standards, regulations, payment means and 32

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methods, business, socio-cultural or customs or para-customs barriers, that exist both in our country as well as in others.

- What aspects should businessmen keep in mind when trying to sell their products to the world?

- There are different promotion and dissemination channels to make products known in other countries and Fundación ExportAr has many and puts them to the service of Argentine companies through Business Missions, Fairs, Exhibitions, Indirect Missions, among others, which complement each other and bring technologies closer, like an institutional web page, e-commerce, etc. All those tools can be used, but they have to prioritize and that depends on the product. A dairy products company will not go along the same path as the company that commercializes textiles, not because of the product, but because the channels are different.

A businessman has to reduce risks and manage his company to grow in a steady way. He needs to know that there are several tools that will help him reduce error margins and that will make his management easier.

- How to select the target market and how to enter in it?

Carlos Torrico has professional business experience in national and transnational companies. He has experience due to his performance in different countries of Latin America, Europe and Middle East. He has coordinated and supervised many areas and tasks that make up the business processes, logistics and international distribution. He currently does advising and consulting for companies that operate in the International Trade.

- When the company is on the way to internationalization and has already taken the previous steps, it is advisable to start with neighboring countries, not just because of their proximity, but because the socio-cultural barriers will be smaller and they will understand better with each other. Moreover, if there is a problem, it could be solved quickly and effectively. The adaptation of the product will be easier and I even dare to predict, based on experience, that it will almost be unnecessary.

The person who is about to start an experience in the international market has to travel abroad, for instance, to an exhibition where he will first participate as a visitor, not as an exhibitor. He will interiorize in the process, observe what the local and international competence is doing; he will meet the exhibitors and the way of presenting products. That is, he will go there to learn and learn from the experiences.

To attend a Business Mission, one must be prepared, investigate and learn previously about that market. His best travel companions, other than business cards, must be good brochures, videos, catalogs, details that illustrate the product, tech specs, and an idea of costs and high dose of patience. If he has any doubt about some business issue, he should say he doesn’t know, no matter how hard it is, and that he will then respond with more information. The company shall be very responsible and it wouldn’t be convenient for someone to promise things that he’s still not sure about.

- In such a dynamic market, which parameters are useful and can be used as a guideline when selecting a positioning strategy?

Concentration or diversification? Why? - It depends on whether the company is starting to export or if it already has some exporting experience and is looking to enlarge markets. A company that is only starting has to focus on and enter in a small market, to experiment. If it already has some experience and is exporting; it’s likely that we’ll find similar products, or that our potential buyers would think that they are the same.

Therefore, they should ask the customer what they want or what product they need. This is the product adaptation.

Adapting it to the new market, to the buyer, and this means adding services, and with that, integrating the customer in such a way that he will feel associated and supported by our company.

The hardest thing is entering a new market. Once that goal

is met, then you can think about expanding. Consolidating in a new market will let him grow, invest in the medium and long term, diversify risks, reduce costs and even, be more competitive in the local market.

- How to calculate the selling price to estimate the potential profitability of the transaction?

– It is convenient to calculate the price of the product FOB (Free on Board), which equals the cost plus the desired profit.

This amount will change depending on the destination, being aware of agreements between countries, and this is obtained by doing research and learning. Not always the prices will be the same for the same product. This is called price policy of the company. For instance, if that target market has fee preferences negotiated with Argentina, then the buyer will pay less import taxes, therefore there is an advantage compared to our external competitors who don’t have that benefit (for instance buyers within MERCOSUR, who don’t pay taxes and where all the goods and products can be moved in the free market, should pay a higher price than the one that a buyer outside the Mercosur pays). You have to keep in mind, that depending on the goods or services to be exported, some tax retentions may apply over the amount to be charged, and that should be foreseen in our price, when we give a quote.

Before making a steady offer, one should evaluate “the cost of the product in the target market” and settle a price policy.

We shouldn’t forget that the final price, the one we sell for, is barely the first link of the chain of costs that our buyer will have to face.

- What aspects should be taken into account when making an offer?

- You have to know that products are classified according to international standards. That is called “tariff item code” a unique code valid for all customs of the world and said tariff code must be inserted with the business denomination of our product. A wrong tariff code may imply import rights different to the ones initially estimated, and even the prohibition to import said product.

It is very important to use Incoterms 2010 (International Business Terms, provided by the International Chamber of Commerce) since they define the basic rights and liabilities by buyer and seller. We shall make sure that we will be able to meet what we are about to “promise” in a timely manner. The News

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quality of the offered product is not part of the denomination of the product, but one of its characteristics.

We shall have our price policy defined for that customer or for that market and we have to mention which paying means and methods we expect, as well as the valid rules about packing and packaging (materials, storage, environmental impact, etc.) in the destination country of the product. It is also important to verify beforehand if the trade name is not registered in the destination market by another company: the meaning of the product’s name in that country, also keep into account the color of the logo and packaging. In some countries certain color may give the image of a healthy product and the same color might mean the opposite in another country. All these small or huge details, must be known by the businessman before going out to the international business and making a “firm offer or a proforma invoice”, which, is also the first document that we issue with legal implications.

- Will the lack of good marketing strategy development lead to an exporting company’s failure? Why? - Definitely no. You need to have a very good product, good marketing, a strong follow-up, a good market selection and a good selection of the buyers who integrate it, so all that together with good marketing, can assure you success, and make it last. Marketing is a very important tool, but it’s not salvation. It can anticipate problems, track trends, but decisions are always business decisions. The businessman knows that there is always a percentage of luck in play, but it’s minimal and it never balances against conceptual mistakes.

Entering the international market doesn’t mean casual or sporadic sales. It is a market where you have to be in the long term, that’s why the decision of entering has to be part of the company’s policy.

- What are the most common risks when exporting? How to limit them?

- One of the risks is ignoring the tools to minimize mistake and another one is being aware of them but not knowing how to use them. The most common mistakes are the rush, lack of foresight, and mistakes when formulating offers or signing

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contracts without assessment (many times the applicable legal systems are different to ours or the jurisdictions where we need to solve conflicts are unknown); sending products in non proper means and not calculating times properly; trusting third party services and not following up the transaction, until having obtained the end, usually brings surprises. In the external market, one has to have predictability and seriousness towards customers and convey calmness and trust in one’s company.

- What do you have to keep in mind when negotiating with foreigners?

- Language and cultural barriers have to be kept in mind.

Some topics should never be discussed with customers, such as religion, politics or sports, since it could result in a conflict of unpredictable consequences. It will translate into beginning off with some friction before starting to negotiate. You have to have enough information about the market, rules and regulations, know the competition, the destination country, if they import or manufacture, who are those who export to that region. The businessman shall train to go out, and mainly be very patient with international negotiations. We have to know our boundaries and accept our limitations. That way we will avoid breaching something that we have promised or offered. We don’t have to seem nice, but prove to be serious and responsible.

Any mistake done outside of the country is much harder to fix, and almost always ends in a credit note negotiated under pressure, as an immediate cost. But the bigger cost is in the medium or long term, since in globalized and interconnected markets, the lack of credibility changes the category and image of the company, which is so hard to achieve and position.

Seminar in Neuquén

Seminar on export services in Neuquén

Before an audience of experienced entrepreneurs in exports, a dynamic and rich lecture was held.

Under the framework of the Federal Training Program given

by Fundación ExportAr through the Support Services Division, a seminar was held in the city of Neuquén.

Upon the request of the Economic Development Agency of the province, we went to give a seminar on services and support to SMEs and at the same time to clear out any doubts as regards the export of services.

In this regard, Mr Alejandro Vicchi gave a detailed introduction on the topic and answered the questions from the audience. It is worth to mention that most participants were companies that already had some exporting experience, so forth it was a very dynamic lecture and was enriched with the exchange of experiences from the audience.

Mr. Vicchi also discussed about the current outlook in the international trade of services, international marketing, and how to export services. Also he emphasized that in order to have access to the export of services the tools used are very different from the ones used to conquer markets of tangible goods exports.

Sebastián Quintana, who gave the seminar, highlighted how important it is for entrepreneurs to learn about the services that the Fundación provides for SMEs. “We stayed talking for a while with the people after the end of the activity since they were very enthusiastic about all the services Fundación has to offer and they were unaware of”.

Government convening authorities of the seminar expressed a high degree of satisfaction on the topics discussed, emphasizing the need to cover unsatisfied demands as regards international trade, and, specifically, those about training of human resources of the province.

In addition, from the survey carried out among the attendants to the seminar, it is worth to mention that: Almost one hundred percent of the audience was specialists and professionals in the marketing of services. Most of them said were able to follow up the seminar easily. The audience expressed a high degree of satisfaction as regards the quality of the seminar held.

Among the attendants of the seminar that was held in the Association of Commerce, Industry, Production and Agriculture of Neuquén, it is worth mentioning the assistance of representatives from Banco Macro, Digital Data, La Posada, Patagonian Consulting and Neuquén’s Undersecretariat of Tourism.

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Interview | Daniel Ivoskus

EPSAM, San Martín’s pride and with a pavilion of ExportAr “In San Martin we have 600 exporting companies and we want to have more. In our district there are 3, 500 industries”, pointed out Daniel Ivoskus.

Recently, mayor of San Martín, doctor Ricardo Ivoskus, and our Executive Director, Lic. Juan Usandivaras, have signed a cooperation agreement enshrined under the close bonds that the municipality and ExportAr have had for ever. Speaking of this agreement, and the imminent Exposición Pyme San Martín 2011 “EPSam” exhibition, we have interviewed Daniel Ivoskus, secretary of government.

- What is the meaning this agreement has for San Martín?

- It is a very important step for us, it gives us a huge backup, and it will enable us to win international markets. It is a step taken towards the strengthening of local workforce and to continue being the national capital of the industry.

Daniel Ivoskus, secretary of government of the district known as “capital of the industry”, highlighted the relevance of the agreement signed with our Fundación.

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- How does the Municipality work to help local companies to access new markets?

- We always work hand in hand to give them support and opportunities. I think it appropriate to highlight the importance of having opened a San Martín’s promotion office in Europe. It is located at Lithuania, and there our entrepreneurs can exhibit and promote their products inside a showroom (located in the city of Kaunas) and sell in Europe. This is a brand new tool at a strategic point to commercialize their products, become more dynamic and increase the business volume with Europe.

In a context of production and commerce expansion with a well defined exporting profile, we have designed a number of actions that we have been perfomring from the Municipality to create new commercialization channels that benefit the business scope of the district, where 18% of the industries are purely exporting companies from sectors such as textile and clothing, leather and shoes, non metallic minerals products, metalworking, machinery and equipment, electrical devices, and household appliances, among others.

- How did you manage to achieve a position in Lithuania?

- By means of a Cooperation Agreement with the ArgentineanLithuanian Chamber of Commerce, Industry and Services. In addition we have promotion programs in Latvia, Estonia, Belarus, Poland, Kazakhstan, Russia and Western Europe. It is a key tool that gives us permanent connection with promotion agencies and companies from Europe.

- How many exporting companies are there in the district?

- We have 600 exporting companies and we want to have more. So forth the agreement with ExportAr will let us take them to international fairs and make possible that many SMEs start the process of becoming international. In our district there are 3,500 industries and 96% of them are SMEs.

- What do you expect for the municipality in the near future?

- Argentina has suffered a deep transformation in the last years. With a woman president and a provincial governor that have had a strong willingness to work and deal with problems.

It has been achieved that the society is at calm and that equal opportunities exist. The model of country initiated by NĂŠstor Kirchenr in 2003, and that continues with President Cristina has encouraged us notably. Before that production was not fostered as it is today. Take this into account: we have opened an industrial park with 30 spaces and there are 150 spaces demanded. That says it all. Our commitment is to keep working for San MartĂ­n continues being the capital of the industry and the inhabitants improve their life level day by day.

- EPSam exhibition is coming soon. What expectations do you have?

- The best ones. This is the 8Âş edition and the first time ExportAr will have its own pavilion. The exhibition will be held from September 8 to 11 at the Parque Yrigoyen, on the premises of the Centro de Exposiciones Miguelete. Companies from all the region are coming, and there will be 600 exhibitors and international buyers.

- What are the advantages of exhibiting at EPSam? - To offer and demand; make direct contact with potential clients and suppliers; obtain information about the sector; launch new products (opinion polls); strengthen relations with habitual customers; start new business and identify solutions for the company. There will be local and international business rounds. It is the biggest SMEs exhibition of the country.

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Venice Biennale An historic achievement for Argentine culture Argentina to have its own pavilion at the world’s oldest and best known fair.

Ambassador Faillace thanks ExportAr for its support.

The President among representatives of our culture in

In what could be called an historic victory for culture, our country has reached an agreement with the Venice Biennale authorities which will give Argentina its own pavilion over the next 20 years at the Arsenals, the site of the fair which saw its 54th edition last June. President Cristina Fernández de Kirchner attended the Biennale along with a large delegation of Argentine artists to celebrate the cultural achievement, which involves a 500-square-metre pavilion at a strategic point of the fairground. Here, thanks to a decision by King Umberto of Savoy, the world’s oldest and best loved biennale has taken place since the end of the 19th century.

Fundación ExportAr has played an important role in the event with its executive director, Juan Usandivaras, signing this loan for use agreement that grants Argentina a privileged position in the world of culture. In an interview with us, ambassador Magdalena Faillace, the true architect of the agreement, and minister Sergio Baur, one of the public officials with greatest prestige in the field of arts, spoke of this agreement.

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- Ambassador Faillace, how would you define this achievement?

- When I returned from Venice, a friend at the Fine Arts Museum said: “The truth of the matter is that you’ve saved us from two cultural tragedies that were hanging over Argentina.” He was referring to the rescue and restoration of the Siqueiros mural which had spent some 16 years stored in containers in the open air in La Matanza. I’m just thinking of these days of freezing temperatures we’re having and the vicissitudes the work has suffered. When I first saw it, it even had icicles on it. He was also referring to the fact that a country like ours, with the art and artists we have, didn’t have its own space at Venice. We’re very pleased to have made this agreement, but the joy is felt not only by the cultural community. I go to the cinema, or meet people in the street who say: “What excellent news”. We have a society that’s coming to terms with the fact that if there’s something in which Argentina stands apart from the rest of Latin America it’s in cultural matters. We’re not simply sitting on the edge of things. We are undoubted leaders in the region, and that leadership’s acknowledged in Europe.

- How has all this been achieved?

- It was achieved because we handled things well and because a political decision was made. Our presence over two years has been very influential, and ExportAr worked very closely with us.

I always say that ExportAr is our strategic partner. Everything we did last year at the Frankfurt Book Fair was of great importance.

Besides, the executive director of the foundation, Juan Usandivaras, is especially sensitive to cultural matters. Being a cultured man who understands the issues we’re dealing with here, he feels genuine interest for culture.

Besides, in ExportAr he understands that if there is something we Argentines can export in quality and in quantity in the best conditions it’s culture. ExportAr cannot be left outside this process of inserting the country in the world.

- Minister Baur, is this an historic event?

- Absolutely. Be in no doubt about it. We told Usandivaras that his signature on this loan for use agreement is an historic one.

The fact that ExportAr has signed on behalf of Argentina lends the work we’ve been doing and also the way in which we’ve been working great significance.

- How important was the role of the president, Ambassador?

- It was fundamental in making this a reality. President Cristina Fernández de Kirchner is genuinely interested in cultural affairs. She’s a very intelligent woman, as everyone knows.

She’s understood that not only is the number of trade missions organised by the Foreign Ministry or the Fundación ExportAr important, she also knows that cultural affairs require substantial support. This doesn’t mean simply verbalised political support, but resources. There is no cultural policy in the world without economic resources. There is no country where the State doesn’t subsidise culture. And we have to do that here. We’ve settled a debt. There were two things that carried weight: the political will which was seen in resources, and Argentina’s presence. So said the president of the Biennale, Pablo Baratta. This pavilion occupies a marvellous strategic space seen from both accesses to the Biennale. It’s a pavilion which dates from 1570 and is much sought after. It’s going to become a banner for Argentina.

- It was wonderful to see so many presigious artists in Venice…

- When I first spoke about this with the Foreign Minister in January, I suggested we invite a number of well known and prestigious artists so there wouldn’t just be an official party consisting of political authorities. So we got together a marvellous group of Argentine artists. The president was really pleased that they could be there, and the artists too; they were very grateful, and very moved. In fact, they made that abundantly clear. There wasn’t a single conflict. The artists were delighted to be able to visit the pavilions. We took topranking artists, such as Yuyo Noé, Marta Minujín, Nicolás García Uriburu, Renata Schusheim, Margarita Paksa, Daniel Santoro, Miguel Jarke, Alejandro Puente… We were present in three places: we rented a pavilion for the guest artist because ours needs restoration that is to start at the beginning of September.

The resources have already been allocated. We dressed up the space for our guest artist, Adrián Villar Rojas, and it was an incredible success, everyone was amazed. It was comletely different to anything else in the Biennale. And the icing on the cake was when the Biennale president thanked our president and they gave us the ground floor hall, which is where all the artists, collectors and journalists from all over the world have to pass. It’s where we mounted an exhibition called Memory and Freedom in Argentine Art of the 20th Century.

Adrián Villar Rojas, “The Murderer of Your Heritage” Images courtesy of Ruth Benzacar Gallery News

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- It’s so important to transmit a political and social message through art…

- Of course it is. The impact of the political and social references we see in Berni, in Noé and in Minujín, for example, revealed the commitment of our artists. And through art we presented a vision of recent history. We have now had almost 30 years of democracy and the fact is, as we said in the prologue to the catalogue, the dictatorship was never able to silence art.

The same thing happened with literature. Last year at the book fair, Griselda Gambaro was invited to speak on behalf of the 70 Argentine writers present. We had permanent support from ExportAr and this year we’re already very busy. We need to continue making progress now with the restoration of the Venice Pavilion. And in October we have to mount another stand at the book fair. We work very well as a team.

- When’s the inauguration of the pavilion?

- We hope to inaugurate the Venice Pavilion next year at the Architecture Biennale. We’ve already met with the Society of Architects and we want to federalise Argentina’s presence at the Biennale. The architects are so lucky to be the ones inaugurating that magnificient pavilion. The Society of Architects is basically restricted to Buenos Aires, which is why we’re going to invite the country’s most prestigious universities and the College of Architects. Architecture can be studied at universities in Córdoba and Tucumán, for instance, where the level is excellent.

Cesar Pelli studied in Tucumán. And in the University of Buenos Aires, Clorindo Testa. We have extraordinary architects. Roca is studying at the University of Córdoba. So we want to generate a synergy between all that grey matter and show that we also stand out in architecture.

- I understand that for the Biennale it was important for Argentina to obtain this spot because it meant extending the exhibition area.

- The Arsenals are partially occupied. As the president of the Biennale told us, they’re hoping that Argentina’s investment will produce a domino effect in other Latin American countries, like Mexico, that are negotiating their own space. Argentina’s the first country in Latin America to have its own space in the Arsenals. The fact that they’ve opened the Arsenals again is in response to an increasingly multipolar world which includes China. The military governments plunged their countries into debt and left them bankrupt, and it’s taken decades to redress the situation. The worst of it was that they left us with 30,000 disappeared, but also an appalling foreign debt. A country which was the seventh economy in the world at its centenary now lags far behind. But we’re successfully restoring the country to its rightful place with trade missions accompanied by cultural events. In a globalised world what gives you a face and an identity is your culture. It’s what sets you apart, because dollars are like the English language. But the Ibero-American community has its Cervantes Institute, which has a very aggressive active policy to make Spanish a language for trade relations. And there are many people around the world studying Chinese at primary school. In a world in which everyone dresses the same way culture makes all the difference.

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- This comes after another resounding success, like the Frankfurt Book Fair, doesn’t it?

- Exactly. In Frankfurt we were guests of honour after China. Our investment was much lower, but the impact was overwhelming.

We’ve had writers exiled all round Europe, amazing ones. Others chose Europe for different reasons. We need to be on those platforms, like the Frankfurt Book Fair, that help launch the image of a country. We too have a wonderful book fair but it’s a fair for readers. That’s why it’s called from the author to the reader.

The Frankfurt fair is a business fair where copyrights are sold.

We arrived with almost 300 titles translated into 33 languages.

It’s something we had never done before and means that we’re making a mark in the heads and imaginations of 37 countries.

Our books have been translated into Malay or Georgian, for instance, which proves that when we know how to promote and sell we get good results. We need to get away from the idea that the word sell besmirches culture. If you invest well and transparently in culture you are sowing magnificent seeds. The great empires on earth were always very clear about this, and the countries that were once great empires dominated through culture, which is a seal of identity. And when those empires collapsed what remained was their culture. And Argentina can stand on the front line in any area of culture.

- So would you say that our artists are being reappraised?

-This policy is being carried forward by a progressive government which is successfully helping artists increase what they can charge on the international market. We Argentines don’t usually offer such high amounts, although many of our artists deserve to receive them. The important thing is that culture produces in itself great synergy. When I first travelled to Frankfurt in 2008, I realised that plastic artists were the least known sector of our cultural world. Our greatest plastic artists were completely unknown to museums in Germany. Culture is an ambassador, that’s abundantly clear. Taking an exhibition of paintings abroad is complicated and expensive, but this government attaches great importance to the issue and has allocated the necessary resources. In this regard, the restoration and inauguration of the Venice Pavilion is a priority. We’re planning to invite our most prestigious architects to the event. They’re a product of our country and our public universities. The important point to remember is that we have top-level, public and, above all, free universities.

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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 decided to widen the 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 a mutual technical complementation and carry out in a coordinated way projects in areas of mutual interest, working in cooperation through different activities.

To this regard, the Senasa and Fundaci贸n ExportAr jointly assist to the small and medium agrifood exporter abroad, as well as boosting imports, in matters related to quality and health in agrifood.

This joint work permits to collaborate in the design of the necessary conditions for the development of actions towards the fulfilment of the policies set forth by the national government as regards exports.

Thus the Senasa widens its regional scope by participating at 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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Dossier: C.O.P.

Certification by private organisations By: Lic. Javier Gonzalez Ojeda

Subject index A. Artícle B. Interviews 1. Beatriz L. García, Argentine Accreditation Agency 2. Damián Zetone, Montever/Zetone enterprise 3. Gustavo Idigoras, Centre for Studies into the Agrifood System News

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Voluntary quality standards required by private organisations Certifications and quality standards seek to legitimize quality in production processes and compliance by enterprises with a minimum level of quality in the activity they perform1. In this regard, certifications play a double role: on the one hand they allow a third actor, who is neither the buyer nor the seller, to certify the product’s quality attributes; and on the other they facilitate stability of trade flows in the receptor market and the reliability of the product.

The impossibility of reaching new agreements in the World Trade Organization (WTO) on the reduction of tariff and para-tariff barriers, within the “Doha Development Round,” has introduced growing complexity into international trade, particularly in agricultural issues. Accompanying this stalemate, a reduction in trade barriers (in cases in which an agreement on tariff reduction was reached) did not necessarily bring with it greater access to markets in developed countries for agro-producing countries. On the contrary, tariff reductions were frequently accompanied by an increase in para-tariff demands.

In this international context, SMEs face a dilemma: although certifications and private voluntary quality standards are now a vital element in securing access to certain markets, the generalized demand for quality standards may well become a new system of trade barriers, in addition to adding costs to exporting.

A recent paper by Tomás Castagnino2 indicates that there is a remarkable relationship between permanence in the export business of an enterprise (in contrast to sporadic export companies) and the holding of some kind of quality certification. In this respect, the author explains that those companies that hold some type of quality certification have on average spent a greater number of years in the export business.

Establishing quality standards for enterprises in developing countries came about as a tool to temper the vision of consumers who associated the capacity to manufacture quality products with the degree of development of their country of origin. This meant that the incorporation into international trade of new production sectors in developing countries should be accompanied by compliance with international standards, prior to the adoption of national standards in developing countries.

This vision was reversed with the incorporation into the world production structure of new production regions such as Asia (particularly China, India and South Korea) and South America in questions of food production.

Together with the appearance of international quality standards, developed with relative consensus as international standards, the implementation of voluntary quality standards demanded by private enterprises, particularly in developed countries, became increasingly common and, in practice, compulsory for access to those markets.

Dentro de las barreras no arancelarias al comercio exterior, a los efectos de sistematizarlas, podemos identificar dos grandes grupos3:

1 Catagnino, Tomás; “Estándares Internacionales de calidad y desempeño exportador: Evidencia a nivel de firma” CEI Review Nº7 2 Catagnino, Tomás; Op. Cit., CEI Review Nº7

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So since the year 2000 there has been a proliferation of private voluntary standards that do not have the required international consensus and which often contradict agreements and standards reached within the WTO. With a view to systematizing the non-tariff barriers to foreign trade, two large groups can be identified: - Public and compulsory non-tariff barriers cover technical regulations and sanitary and phytosanitary (SPS) measures imposed and agreed by governments to protect the health and security of their citizens and the environment. They are enshrined in the Agreement on the Application of Sanitary and Phytosanitary Measures (the “SPS Agreement”) and the Agreement on Technical Barriers to Trade (TBT)4, both within the WTO. These are standards established by national, regional and international bodies.

- Private and voluntary non-tariff barriers can be divided into two kinds of measures: a) Private voluntary measures that enjoy international consensus, such as International Standardization Organization standards. These are created by the ISO, which seeks to unify quality criteria between the different countries to be applied as a single model. The ISO is a global federation which comprises national standardization bodies from 153 countries5, one from each member state, which means that the work done is the result of commonly agreed negotiations which give rise to international agreements that are published as international standards.

b) Voluntary measures established by private bodies to which the export company must adapt.

The latter are established by consortia or retailers that draw up stricter regulations for product suppliers. This practice gave rise to forums and consortia establishing private standards such as the Food Security Standard of the British Retail Consortium and the GlobalGAP of the European Retail Working Group on Good Agricultural Practice6, to quote just two examples. These standards are some of the internationally most disseminated models that allow distributors to rate their suppliers.

Although one can find most of these standards in sanitary or phytosanitary security, the UNCTAD estimates that there are over 400 groups of private standards. Within this type of measures can also be named standards such as Worldwide Responsible Accredited Production which is applied particularly to the clothing and footwear sectors, which are designed to address environmental and social concerns. Another standard that deserves mention is the SA 8000 on social responsibility, as well as bodies such as the Forest Stewardship Council for wood and the furniture sector, and the Marine Stewardship Council that governs fishing7.

3 This systematization does not claim to be exhaustive or exclusive and was made for teaching purposes.

4 The Agreement on Technical Barriers to Trade (TBT) states that countries must apply compulsory standards regarding products in such a way that they do not create unnecessary barriers to international trade. Besides, the standards must be based on scientific information and observations. From the point of view of the Agreement on TBT, compulsory requirements regarding products do not create unnecessary obstacles to trade when they are based on internationally agreed standards.

5 Figures expressed when preparing this report based on the most recent data from the Organization.

6 Gujadhur, Shyam; “La calidad prerrequisito de las exportaciones: creciente complejidad de los requisitos técnicos de los mercados de exportación”; International Trade Forum Nº 3/2010.

7 Gujadhur, Shyam; Op. Cit.; International Trade Forum Nº 3/2010.

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Main voluntary standards created by private organizations

As regards the implementation of voluntary standards created by private bodies there are two positions. The countries in which these measures originate are generally of the opinion that the standards set by the private sector can help suppliers improve the quality of their products and obtain, and retain, access to high quality markets.

In contrast, many countries claim that private standards may be more restrictive and more perceptive than the official standards for imports, and thus, become a further barrier to market access8.

Among the main standards established by private organizations that have gained considerable acceptance for access to destination markets are the following9: Globalgap: a private body that sets voluntary standards through which agricultural products can be certified in most of the world. This system was born in 1997 as an initiative of retail traders and European supermarkets. The objectives of GlobalGAP are to reduce risk while ensuring the quality and safety of foods in primary production. This single standard brings together in a modular format different groups of products, from the production of plants and livestock to plant reproduction material.

In Argentina, the OIA is the certifying agency designated to control compliance with the GAP (Good Agricultural Practice) Programme for fruit and vegetables, cattle, sheep, dairy cattle, poultry, pigs and bulk crops.

Global Standard for Food Safety BRC: Created by the British Retail Consortium for the food manufacturing companies that supply products in the United Kingdom’s retail market.

Developed to assist retailers in complying with their legal and consumer protection obligations by means of the creation of a common base for the certification of companies supplying retailers.

TESCO Natures Choice: a standard that all producers/suppliers of the TESCO supermarket chain around the world must comply with in order to be able to supply fresh fruit and vegetables.

The standard was drawn up to ensure that high quality vegetables are produced in production units in which Good Agricultural Practice is applied, which are environmentally friendly and which protect the health of their workers.

The main aspects covered by the TESCO Nature’s Choice standard are: • • • • •

Rational use of crop inputs, such as fertilizers and pesticides to minimize risks for the environment and for man.

Prevention of contamination through the identification and reduction of potentially polluting agents.

Conservation of flora and fauna and of the landscape by encouraging the use of insects in pest control rather than chemical agents.

Recycling, reuse and conservation of energy by encouraging the recycling of water and improving efficiency.

Protection of the health and safety of workers by identifying and reducing risks and by training personnel.

Safe, Quality Food10 (SQF): First established in 1996 by the Western Australian Department of Agriculture. Since 2003 the standard has been managed by the Food Marketing Institute (FMI). The SQF consists principally of two certification programmes for the food industry: one for primary producers (SQF 1000) and the other for the industry (SQF 2000).

Global Food Safety Initiative (GFSI): a non-profit foundation created in Belgium in May 2000 within the Consumer Goods Forum.

8 Wolff, Christiane; “Las normas privadas y el comité de medidas sanitarias y fitosanitarias de la OMC”, Conf OIE 2008, 99-107 9 The description of the different private standards was supplied on the basis of information from each of the pages of the private organizations.

10 Universidad Tres de Febrero (UNTRAF), Instituto Latinoamericano para el Consumidor.

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Besides the work of harmonizing food safety standards, the GFSI also seeks to develop mechanisms for the exchange of information on the supply chain, to raise awareness among consumers and to disseminate good retail practice. GFSI certificates are formally accepted and recognized by the leading global retailers such as Carrefour, Tesco, ICA, Metro, Migros, Ahold, Wal-Mart and Delhaize.

The International Food Standard (IFS) is an internationally accepted standard that adheres to accreditation criteria based on the EN 45011 standard for product certification. The IFS was developed for all kinds of distributor (all sizes of enterprises and shops, independent or otherwise) and for wholesalers with similar activities (e.g., cash and carry).

Possible implications for food exporting countries

The first doubt in the issue was raised in June 2005 by St Vincent and the Grenadines, which expressed its concern to the Committee for Sanitary and Phytosanitary Measures regarding the limits set by GlobalGAP for pesticides in imported bananas.

It also wanted to know what relationship existed between GlobalGAP and the official standards of the European Union, a concern felt by various different food producing countries. The European Union replied that GlobalGAP standards were not official European standards and that, although they were more demanding than official European regulations, they did not contradict them11.

In this respect, the main problem in the advance of private standards is that although they are not formally compulsory or adopted by the official authorities of the members, from the moment at which private standards become industry standards they also become in practice requirements of access to foreign markets, particularly in situations in which there are few distributors accounting for the largest proportion of sales12.

While the Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary (SPS) Measures are based on compliance with international standards, the proliferation of private standards in questions of food security, environmental affairs and social questions, pose greater complexity for the SME exporter.

In short, many countries are concerned that the cost of applying private standards, plus the additional cost of certification, which at times is paid to cover various series of standards for different buyers, should become problematic, especially for small producers, particularly in developing countries13.

Bibliography

•

Catagnino, Tomás; “Estándares Internacionales de calidad y desempeño exportador: Evidencia a nivel de firma” Revista del CEI Nº7

•

Gujadhur, Shyam; “La calidad prerrequisito de las exportaciones: creciente complejidad de los requisitos técnicos de los mercados de exportación”; Revista Forum de Comercio nternacional Nº 3/2010.

•

OMC; G/SPS/W/246, Marco legal OMC de las normas privadas; Comunicación de Mercosur (Argentina, Brasil, Paraguay y Uruguay); del 30 de septiembre de 2009

•

Wolff, Christiane; “Las normas privadas y el comité de medidas sanitarias y fitosanitarias de la OMC”, Conf OIE 2008, 99-107

11 Wolff, Christiane; “Las normas privadas y el comité de medidas sanitarias y fitosanitarias de la OMC”, Conf OIE 2008, 99-107 12 OMC; G/SPS/W/246, Marco legal OMC de las normas privadas; Comunicación de Mercosur (Argentina, Brasil, Paraguay y Uruguay); dated 30 September 2009. The document gives the position of both Mercosur and Argentina on the matter.

13 Wolff, Christiane; Op. Cit., Conf OIE 2008, 99-107

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Interview | Beatriz L. GarcĂ­a: Argentine Accreditation Agency

Certifying management systems is one of the key elements of support for company production Beatriz GarcĂ­a is at present Operations Manager of the Argentine Accreditation Agency (OAA in Spanish). Internationally she is a member of the Interamerican Accreditation Cooperation (IAC)

-What are voluntary quality standards? What do they consist of?

In the terminology used in questions of quality, accreditation and the whole evaluation of conformity process standards, whether international (ISO/ IEC) or national (IRAM, in Argentina), are all voluntary and set the minimum conditions a product or service should have in order to serve the purpose for which it is designed.

They are intended to be used by the private sector, and they often become obligatory when national regulatory bodies take them as a basis on which to establish the requirements for products and services in the area of competence (health, foodstuffs, security, environment).

In this regard, accreditations of laboratories and certification and inspection bodies carried out by the OAA have an effect both in the private/voluntary and in the regulated/obligatory spheres.

- Why is it important for an enterprise to certify the quality of its products or processes? What is the relevance for exporting SMEs? Certifying quality and environmental management systems, as well as products, is one of the main elements of support for production in companies since it serves to demonstrate compliance with the conditions required to enter different international markets –security, performance, maintenance, environmental effects, etc.

In order to reinforce exports and eliminate technical barriers to trade, the Argentine Accreditation Agency has been assessed and has signed multilateral agreements with international and regional accreditation organizations. So the products and services backed by duly accredited certifications, inspections and laboratory tests have made acceptance in the global market a feasible option.

- What is the difference between voluntary quality standards like the ISO and those demanded by private bodies?

As we were saying, voluntary international standards are designed to serve as a base to prove compliance with the requirements established by both the private and public sectors.

In the private arena, demands for standards may come from companies or different sectors, and in some cases the private sector establishes certification schemes that do not strictly respect such standards. A case in point is that of food-related products by the GlobalGAP world organization, whose requirements are the object of certification, and compliance with them is the key for supplying large supermarket chains.

In this case, accreditation also plays its role since it endorses the corresponding certification bodies.

- How does each one influence international trade?

Both the standards and the government programmes or regulations laid down by companies, entrepreneurial groups or governments of countries are conditions that the exporter must comply with and show that he has done so. The important thing in such cases is that none of the bases for certifications should be technical barriers to trade.

- What recommendations would you make to a company that wishes to embark on the quality certification process?

We need to distinguish between the concept of quality management certification or product certification. The first of the cases requires implementation of a management system based on the standard it plans to use for certification (quality: ISO 9001, environmental: ISO 14001). In the second case, the company must implement a quality management system and subject its

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products to laboratory tests. In both cases the implementation process of certification standards can be done internally, after training of those responsible in the area, or contracting the equivalent consultancy service.

Specific certification activity must be done by hiring duly accredited certifying agencies which endorse their products both locally and abroad.

Companies are normally familiar with the requirements for their products or services made by their local or international clients. These conditions may involve certification of management systems and/or product certification and/or laboratory tests, etc.

The OAA web site (www.oaa.org.ar) gives the list of accredited bodies and their respective contact details, as well as answers to frequently asked questions on accreditation and the assessment of conformity.

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Interview | Damián Zetone: Company Montever/Zetone

The important thing is not entering a market but staying there. Our company is committed to providing the highest quality and quantity

Located in the Upper Valley of the Río Negro, the company is one of the most widely recognized traders in pears and apples in the world, and ranks among the 5 largest exporters in the country for those fruits. In this interview Damian Zetone, Sales Director, tells of the company’s strategy over certifications and makes recommendations on how to undertake the certification process.

Glossary of private certifications.

Safety: Necessary condition to ensure that food will not cause illness when consumed.

GAP: Good Agricultural Practice.

GMP: Good Manufacturing Practice.

HACCP: Hazard Analysis and Critical Control Point.

BRC: International Food Standard, British Supermarket Consortium.

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- Could you tell us about the voluntary certifications of private organizations made by the company?

The Montever/Zetone company has been GAP certified for 6 years under the GlobalGAP standard in production and packing, and 2 years in GMP-HACCP in the processing, conservation and dispatch areas. At present the senior management of the Montever/Zetone company has set itself a future commitment to certify BRC regulations and social responsibility.

- What led the company to decide to apply for voluntary certificates from private organizations?

As a company with long experience in fruit farming, we are convinced that clients and consumers must be supplied with healthy, uncontaminated food. The important thing factor is not entering a market but remaining there. The company’s commitment is to provide the highest quality and quantity over time.

- What recommendations would you make to a company that wants to start the quality certification process?

Contact a reputable certification agent who has been officially approved in the principal protocols. Depending on the markets to which we supply our fruit, the most requested are GAP in production, GMP, HACCP and BRC in the packing and conservation processes of raw materials.

- Tell us about the certification process. What are the steps involved in obtaining certification?

The first step is for the company’s senior management to be convinced that the implementation and certification of such a protocol is necessary. Having made this fundamental decision, it goes ahead with the interpretation of the protocol and its implementation (trained implementer), when with internal audits we prove that we have fulfilled the protocol. Then the chosen certifier should be called to conduct the certification audit (third party audit). The time implementation takes depends on the resources allocated; for example, if human and economic resources are ideal it can be done in 3 or 4 months, depending on the size of the enterprise. The certification audit takes 1 to 1½ days according to the protocol to certify. Generally the certificate lasts one year, during which time recertification can go ahead to avoid losing the status. The Montever/Zetone company does this every year since its in-house policy is that food safety is non-negotiable.

- In your opinion, what are the benefits and the costs of voluntary certification?

It is a necessary condition to enter and sell in the main markets for our fruits. The world trade in fruits in general (there are always exceptions) and consumers in those markets require foods which do not make them ill, that can be safely eaten by risk groups (children, pregnant women and the elderly), therefore, we must produce safe food. The way to guarantee this is by showing a certificate issued by a third party and recognized by the client.

Costs are set in accordance with the size of the company and the protocol chosen. But its value is affordable by all, since for small and medium producers there are SEPyME (Spanish acronym for the Secretariat of Small and Medium Enterprises) subsidies for up to 80% of the money paid to implement and obtain certification. Finally, I suggest that anyone interested in certifying a standard should analyze the process well.

Dossier: C.O.P. Interview | Gustavo Idigoras: Centre for Studies of the Agrifood System

The impact of private standards in food chains Gustavo Idigoras is Director of the Centre for Studies of the Agrifood System (CEAGRO) and Director of BIM, a consultancy company in Agrobusiness and Bioenergies. Professor at the Universidad de Lomas de Zamora, he has recently published a book entitled “Impact of Private Standards in the MERCOSUR Beef Chain�

The present agrifood systems of production, distribution and consumption are greatly affected by the presence of public and private standards in animal and plant health, and the quality and safety of fresh and processed food consumed daily.

The scope and rigour of the quality and sanitary standards established by international retail chains and food companies will continue to grow strongly and will directly impact the sustainability of the food export sectors of producers in both developing and developed countries.

Private standards are the true conditions to secure market access given that it is impossible to export if such standards are not met, although they may still be applied voluntarily by companies and international trade.

Most standards seek to strengthen aspects of food security, quality and safety.

However, some of them incorporate dimensions more closely linked with ethical questions and issues of corporate social responsibility, such as compliance with labour regulations, animal well-being, crisis management and corporate social responsibility. In fact, some international institutions such as the OIE, CODEX or IPPC stress that these dimensions lack sufficient scientific support, that there is a need for a principle to recognize equivalents, that there is a lack of proportionality between the potential problem and what is demanded as a private standard and, at the same time, that there are great difficulties in access to information.

Compliance with, and the implementation of these private standards require a considerable effort by food producing enterprises, which results in higher production/ export costs and/or in the displacement of producers unable to satisfy these new requirements (basically small and medium enterprises).

The evolution of private standards is explained by a variety of factors, including: 1. Dissemination of concerns relative to the safety of foods and problems of trust in national health control bodies.

2. New legal requirements both in the European Union (EU) and in the USA by virtue of which production companies and traders must show due diligence in preventing risks related to food safety (the famous Community Hygiene Package).

3. The growing attention attached to the social responsibility of companies and their efforts to reduce to a minimum the risks of reputation.

4. The globalization of supply chains and a trend to vertical integration by the use of direct contracts between suppliers and retailers.

5. The strong expansion of supermarkets in the retail trade in both national and international food products and in food production.

6. The worldwide expansion of service companies in the food sector (e.g., certification agencies).

The growth of these standards occurs within a context of globalization of production and particularly the commercialization and distribution of foods. Health and safety requirements are becoming widespread around the world given that a supermarket today has on its shelves products from various different origins and therefore minimum health and quality guarantees are required when buying.

Dossier: C.O.P. Likewise, retail chains have been expanding in many developed and emerging countries, and in those with lower relative development. These multinational enterprises are mostly firms with open share packages that are quoted on the stock exchange, meaning that the sale of foods now carries a financial risk that did not exist previously in which speculation could lead to lower commodity prices or to certain enterprises and origins being excluded from some markets.

The financial risk faced by retailers comes in addition to new consumer expectations. There has been much debate on this aspect but it is clear that there is great concern felt by a large number of consumers who demand healthier food of better quality, which produces less contamination, and which has an ethical production system, etc. There was recently a case of dioxin pollution in German pork which News

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sparked a new crisis in prices and sales in the sector in almost all European countries. Retail chains halted their purchases and consumers were on the alert and more cautious about buying such meat although the risk was limited. In fact, the industry in Germany claimed that there had been a fall of 10% in the consumption of pork and chicken. Meanwhile, France, Austria and Poland requested the implementation of measures to restrict sales from Germany so as to avoid problems in supply chains and not damage consumer confidence. Such is the magnitude of these concerns that the Health and Environment Commission of the European Parliament unanimously requested that criminal sanctions be imposed on commercial operators of those meats.

In addition, in this world of on-line communications, the reputation of retail enterprises comes into play. In this specific case, retail chains acted rapidly by withdrawing the affected products from their shelves and offering greater information on the origin of pork, eggs and poultry. However, the fall in consumption was felt anyway due to the speed at which the information reached all the journalistic media. In fact, there were cases of smaller retail chains that had to close operations because of bad news in the press derived from poisoning by food purchased in their shops.

Likewise, food control systems in the EU and USA have altered their liability and forms of control. Currently, the enterprise, whether a primary or industrial producer, is responsible for having a control system that offers guarantees. If it has no such system it could be criminally liable, as occurs with the EU’s Food Hygiene Regulations. Therefore, retailers take these new standards and delegate primary responsibility to the producer and/or industrialist.

Lastly, we have consumer NGOs that have a strong influence in acceptance of prices and quality of products. Their news portals and newsletters are permanently comparing products, prices, quality of attention, etc. of each food sales chain. Retailers claim that they receive daily pressure from these NGOs to increase demands in the health and quality of the foods in their stores as well as providing further information by means of labelling or information posters.

In short, all these elements act jointly to increase the demands and requirements on the health and quality of the foods offered in retail stores. This explains why these private standards have arrived to stay and continue growing, because there is no obvious reason for them to disappear.

The consequences of the emergence and expansion of these standards could be summarized in the variables reproduced here, which have an impact on the viability and growth of retailers as well as on the entry of producers and industrialists into, or their desertion from the retail commercialization channels.

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Dossier: C.O.P.

a) Mass proliferation: all medium or large retail distribution chains in the EU or the USA have adopted private standards to regulate their purchases. These private standards, whether collective or specific, are composed of more demanding requirements than the official regulations in force; b) Triple standards in force as a condition for market access: to be able to export to the EU or the USA it is necessary to satisfy government regulations in force and be certified as having done so. Once the product has crossed the frontier (the only guarantee offered), exporters must seek to comply with other stricter standards in order to be able to sell their products. In first place, they must have certificates of collective standards (GlobalGAP or BRC, depending on the product if it is in the EU). Once that is done, they must obtain an additional certificate that allows them to sell their products in a supermarket chain and for that they must comply with the specific standard for that group (triple standard); c) Lack of transparency in information and public knowledge of collective and specific standards: it has been an arduous task to obtain information on specific standards which shows that the distribution chains have no interest in publicly disseminating the additional requirements they request in order to avoid unfair competition or official questioning about non-scientific standards. It is evident that health and quality have become a financial asset for supermarkets, most of which are quoted on stock markets; d) Incremental costs: the implementation of a standard in food production in Mercosur countries generates significant incremental costs. Depending on the size of the enterprise those costs may imply being in or out of the market; e) Excluded operators and countries: this is the most dramatic consequence of standards since costs of implementation and certification can negatively affect export capacity and exclude operators unable to access new technologies, human resources and adequate infrastructure but which do comply with the government standard of the country of origin.

The most complex case is Paraguay with a list of plants authorized to export to the EU but which, since they do not have the British Retail Consortium, prefer their operators to trade with other countries, thus losing higher income and sources of employment. f) Possible illegality: several analysts have posed an apparent violation of the WTO’s SPS Ageement by the countries in which these private standards proliferate, given that Article 13 on implementation speaks of observance by other regional, local and nongovernmental organizations of SPS principles. The national government must therefore watch over its compliance. This debate is internationally incipient and greater analysis is required to clearly detect such a link, although it seems reasonable to present it. Chapter 4 is devoted precisely to these aspects and it is one of the first full analyses that have been made. The absence of a scientific basis on which to establish the requirements for certain private standards is of the greatest concern for operators from Mercosur countries and of their governments. Lack of rationality in the health measures identified by the standards also generates many conflicting reactions.

In a recent study we conducted for the IICA (Impact of private standards in the MERCOSUR beef chains. Idigoras et al. IICA. 2011), various lessons have been learnt. It is worth stressing them here as conclusions: - The universe of export enterprises applies or complies with the private standards demanded by retail chains, i.e., no commercial operator wishing to export to developed countries fails to comply with at least some of the most important requirements in the market; - Consequently, the costs of implementation and certification are difficult to distinguish from total costs since a standard is considered to be part of the whole. Most of the companies consulted that have certified standards cannot distinguish intrinsic costs since they consider them to be obligatory requirements similar to those requested by governments; - In short, private standards are production practices and processes already acquired, meaning that once implemented they are not seen to be entry barriers. To be in the market, standards must be observed because they are the rules for belonging; - There is a generalized perception among all interviewees that private standards improve quality management systems and eliminate or reduce weaknesses in areas not regulated by states; News

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- Additionally, in the beef industry of these countries, the implementation of such standards is a process of improvements in health and quality due to the level of informality in production and commercialization that still exists; - Large enterprises have shown in this study that they feel comfortable with and are interested in implementing and certifying standards; - For many operators having these standards is a guarantee of sales, of higher prices and access to more affordable financing; - For smaller companies it is evident that some costs of implementation are thought to be excessive and can undermine the possibilities of reaching standards and, therefore, of sales to those chains. This study has shown that small operators cannot afford costs in human resources and infrastructure to reach these standards, despite the fact that their plants may be authorized to export to the EU; - The total costs compiled by the study measured against the total value of annual exports in 2009 account for 3.5% in the MERCOSUR, including implementation and certification; - As regards specific disaggregated costs, the study indicates per country: Argentina: USD 64 million per year Brazil: USD 266 million per year Uruguay: USD 20 million Paraguay: USD 14 million - The distribution of costs is given by the significant prevalence of implementation measures over certification as such. A total of 82% of costs originate at the stage of adapting processes and technologies to the requirements of the protocol; - In implementation, all interviewees have indicated that the highest costs are: infrastructure, training of existing and new human resources and new technologies, and between the three we reach 55% of the total costs detected.

The clearest teaching stems from the lack of human and infrastructure resources to reach these standards. This is where small operators and some MERCOSUR countries have the greatest difficulties in certifying and gaining access to better prices and quantities in the much sought after European market.

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Dossier: C.O.P.

The case of Maximum Residue Limits

Fuente: elaboración propia

Several retail chains in the EU apply maximum residue limits below the tolerance levels allowed by community regulations.

Regulation (EC) No. 396/2005 of the European Parliament and Council of 23 February 2005, which came into force on 1 September 2008, sets out the maximum residue limits (MRLs) for pesticides in foods of plant and animal origin for human and animal consumption, with the aim of consolidating the free circulation of goods within the bloc and trade with third countries under the harmonization of standards, establishing fairness in competition between the various players, as well as a high level of consumer protection, and avoiding risks to life throughout the European market. Before the entry into force of this regulation there were 27 national MRL lists and four community rulebooks partially regulating the MRLs: Directive 76/895/EEC for selected fruits and vegetables, Directive 86/362/EEC for cereals, Directive 86/363/EEC for products of animal origin and Directive 90/642/EEC for fruits and vegetables. Under the new harmonization regulation, when the 315 products in 10 groups of commodities included in Annex I (subsequently published under Regulation 178/2009) are sold as foods for human or animal consumption, they must contain no pesticide residue exceeding the specific MRLs established for each particular product, whether composed/ transformed or fresh (Annexes II and III), or rather 0.01 mg/ kg (“lowest limit of analytical determination (LOD)”) for those cases in which the products have no specific MRL, or for unlisted active substances. The Member States will be able to authorize restrictions on active substances above those established after fumigation processes subsequent to harvesting if the end product is not for immediate consumption and there are adequate controls that guarantee this, until such

It is time to do something. Retailers’ chains should be more transparent and promote the dialogue; governments should accept that there is a new actor with similar powers and reach agreements, operator should not be afraid of discussing their problems.

In few years, excessive growth will cause a crisis of standards that will lead to a redefinition in view to the consolidation of few private safety standards similar to those for the control and certification of foods that all commercial operators must comply with. This statement is based on the increasing and proven purchase power of some retailer chains and the establishment

time as the residues no longer exceed the stipulated limits.

In these cases the other MS and the Commission must be informed of the measures taken. In exceptional circumstances member states may authorize the commercialization or use as animal fodder, in their countries, of treated foodstuffs that do not meet the established guidelines, provided they contain no unacceptable risks accredited by means of a thorough assessment and simultaneous notification to the remaining MS, the Commission and the European Food Safety Authority (EFSA), with the aim of establishing temporary MRLs. There is also a procedure for import tolerance in cases in which, at possible differences in applying GAPs of exporting countries, it may be impossible to comply with the MRLs contained in European legislation.

If the maximum limits set by different chains in the chart above are compared with the annexes contained in community legislation, the conclusion may be reached that in all those cases the requests to producers for maximum tolerances are always greater in terms of demand and more restrictive in terms of the presence of agrochemical substances. None of these chains has presented risk assessments to validate these maximum limits.

of voluntary standards that along practice have been losing these characteristics. During the transition from the atomization of private standards and the consolidation of just a few, Governments of developing countries that export foods should intervene for the benefit of their manufacturers, by opening dialogue channels with other countries and retailers as well as providing support to operators in order to reach those standards either directly or with assistance from technical and finance cooperation international organizations.

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Special Report | José Bekinschtein - Proargex Advisor

China This article aims to highlight the following core ideas:

1. Changes in the Chinese demand for foods are profound and “are here to stay”, The profile of needs, consumption, and foods domestic production capacity in China is undergoing a structural and long term transformation. So, this is a strategic challenge, not only manageable through short-term isolated measures.

2. Suggesting a challenge in terms of volume and adapting the supply, In some cases, current or expected imports of China are equal or superior to the total Argentine production, in others what is produced or exported to other destinations requires adaptations that are time and resource consuming. Likewise the increase of volume in as much as the adaptation of production requires, in addition and above all, of an integral view of this issue, which is not always available to the Argentine company.

3. That invites to think an integral and coordinated approach.Facing challenges such as adapting production and creating channels of trade and distribution supposes the coordination of efforts between public entities and them with producers and exporters, under the framework of a commercial negotiation scheme: a change, even the slightest change in the profile of our foods export to China, could have relevant and beneficial implications in terms of impact on the incorporated added value.

4. And also with appropriate answers to the Chinese investment strategy of resources in our region, with a medium and long term view.

As regards the effects of exports settlement, the BCRA (Central Bank of Argentina) establishes that the designated entity for the follow up of advance payments or pre-financing must inform the status of each operation as regards the compliance with the terms to issue the shipping permit, according to purchase orders or contracts that validate said indebtedness.

Credit lines for the pre-financing of exports are used for financing manufactures production and importing manufactures of industrial or agricultural origin supplies destined for export.

Credits provide for financial resources to the exporter in order to be able to fulfill the different phases of the production and marketing processes of goods to be exported, all of which stimulates exports.

Through this instrument, the exporter may finance loans in USD up to 80 % of the FOB value of agricultural products for a period of 180 days, which can be extended to 270 days, depending on the production cycle.

As regards the industrial and mining sectors, the maximum terms offered by the market may be 180 days and may exceptionally reach 365 days, when dealing with capital goods exports or those goods with a strong technological component.

1 Economist. Prosap-Proargex Advisor. He was Economic Advisor of Argentina in Beijing during the 1980s. Since 1998, he is Executive Director of multinational companies in China. As University Professor has published a number of articles on the links between China and Latin America.

2 Lester Brown . 1995: http://www.archive.org/details/Who-Will-Feed-China 3 The Global Harvest Initiative 4 2010 GAP Report™

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I. China: a permanent change.

Wealth, relative prices: keys to a lasting change in consumption and demand.

Since 1950s, China had based its food strategy in self-sufficiency and almost and absolute reluctance to depend on the international market for the provision of basic foods. Behind that decision there were geopolitical reasons: the latent conflict with the US and as from 1960s, with the Soviet Union, but also China doubted whether the outside world had the physical capability that, in case of emergency, could help feed two billion mouths the country had at that moment.

With accomplishments and drawbacks, it can be said that late during the first decade of this century, China’s objective of food autarchy has been accomplished. The answer to the question: “Who will feed China?”2 through the decades was “Chinese themselves” So China has maintained a positive agrifoods outcome reflected on its trade balance for those products, and above all it has maintained a minimum nutrient supply for the population. Imports – mainly grains- were destined to cover temporary and season shortages or a deficit in the transportation structure that, even nowadays, makes it cheaper to supply those areas Southern Yang Tsé River with landed bulks in Shanghai than with crops from Northern plains. But in the same way China imports grains, it also exports them – mainly rice and maize- and processed foods.

The first wave of economic reforms – started back in 1978- that ended with the communities system permitted that part of the agricultural production could be sold in the “free markets”, furthered the self-provision capacity, and generated incentives for production mainly of crops with high unit value, although the State had managed to maintain the capacity to sustain cereal and grains production. Likewise, those reforms have led on one hand to an improvement in the rural population’s income, and on the other, to widen the diversity and quality of the foods offered to inhabitants of the cities.

But the impact of the transformations stared in 1992 – “to get rich is glorious” was then the statement of Deng Xiao Ping contemporary to the release of reforms that continue to date—had long term effects on the possibility of maintaining food autarchy.

Really, since then and especially during the last ten years, wealth was generated rapidly. But this time, the principal beneficiaries

were urban residents, industrial activities and services. Agricultural production and stockbreeding responded to the challenge of a rapid and increasing demand with a strong productivity increase: only in terms of Total Productivity factor, China’s advance, based on the improvement of its “technological capacity: research, extension and education was 2.5 % annually between 1970 and 2007, way above world average of 1.4% 3.

But in the past three decades since China started with the reform cycle based partly on diffusion market mechanisms, economic growth has led to a dramatic improvement in life conditions and dietary habits.

According to data based on FAO4, protein intake which was below world average in 1975, today are way above it, and in particular animal protein intake surpassed world average in 1990.

Generally this change in dietary habits tends to be interpreted as a consequence of the improvement in the population’s income.

Likewise we need to add another factor, not less “structural” and foreseeable, but permanent: gradual deregulation of prices previously “planned” of grains and basic foods that are part of the economic reform. So forth on the demand side we have two structural factors that tend to make increases and variations of the demand permanent: more available incomes and changes in relative prices towards protein foods and differentiated quality.

At the same time, as income grows, the quality of consumed foods is the most changing factor, even more than quantities: hence constant modifications to the demand profile. Quality search has been the protagonist likewise diffusion in supermarkets, specialized stores and restaurants. That network responds to the search of new wealthier consumers, with a higher added value and marketing in their diet, instead of bigger quantities of foods. Consolidation and expansion of that network, at the same time, helps to reproduce and widen the availability in quantity and quality of new consumptions: changes become more permanent.

Nevertheless, these strict transformations cannot escape from strengthening contacts with neighbor markets that act as “models” or fashion beacons, as regards consumption trends in the continent: in the first place Hong Kong and Taiwan, for obvious cultural reasons, but Japan and Korea as well.

2 Lester Brown . 1995: http://www.archive.org/details/Who-Will-Feed-China 3 The Global Harvest Initiative, 2010 GAP Report™, Measuring Global Agricultural Productivity http://www.globalharvestinitiative.org/documents/GAP%20Report.pdf 4 http://faostat.fao.org

Technological improvements, but limited resources: unequal competition.

Improvements in productivity have been impressive, and will continue to be. But they could compensate with more difficulties the availability decrease of arable lands especially in water sources and reservoirs for crops.

Chinese farmers still have a wide range to increase efficiency in production. Official Chinese policies have contributed to this and continue fostering mechanization, new varieties and breeds implant and streamlining campaigns. In the last five years, China has experienced the creation of new rural credit institutions, cooperatives, and new leasing forms and land transfer that may allow establishing production units of bigger size.

A recent report from the United Nations5 reminds us, however, that “since 1997 China has lost 8.2 million of arable land hectares due to urbanization and forest and hills replanting projects...””Such loss “represents a bigger threat to the Chines capacity for maintaining its current self-sufficiency in grains (that is 95%)”. So forth the Government drew a “red line” of 120 Ha beyond which will be not permitted further reductions in the availability of arable lands. Nevertheless, the threshold is uncomfortably close:

Soya: Area sown. Selected countries 35000000 30000000

USA

25000000 20000000

Brazil

15000000

Argentina

10000000

China

2009

2006

2003

2000

1997

1994

1991

1988

1985

1982

1979

1976

1973

Source: Faostat.

1970

1967

1964

0

1961

5000000

The case of soya sown areas is particularly illustrative of a trend – or plan let’s say – for the long term in order to optimize the use of resources and direct to the external market certain amount of bulks.

Water is another increasingly scarce resource, is only ¼ per capita of world level. Agriculture being the most water demanding sector.

Particularly in the North of the country, water consumption for agriculture, urban and industrial use has caused a decrease up to critical extremes, in some cases, of water sources such as surface and underground water sources, causing serious environmental consequences such as desertification and salinization.

In addition, water pollution limits the availability of drinking and irrigation water. Lack of water and pollution complement themselves thus representing a threat to the food security of the country. There are no easy solutions to this problem thus becoming another structural factor for changing in the long term the agrifood situation in China.

Increases in demand and restrictions on available resources then result in foods trade trends speak of a turning point. Until then and for a long time with surplus, and still keeping a leading position as exporter, Chinese foods trade registered in 2008 for the first time a reverse:

5 UN High Commissioner for Human Rights, Mission to The PRC from 15 to 23 December 2010, Beijing 23 December 2010.

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II. Argentine food production on stage.

First step: the universe of products and activities and the dimension of current and possible market.

The first step to evaluate a “non traditional agrifood” linkage with China is to determine its dimension to do business at steak, in physical and value terms as well. From there it can be seen a universe-objective of possible products and activities for intensive support and business actions. A selection of foods imports – excluding commodities- for the China-Hong kong group6 requires certain criteria or filters. Based on my own experience they should be:

•

Excluding “commodities”: bulks and non-industrialized fishing, generally “bought” and not “sold”

•

Including primary or elaborated foods that:

• Register imports from the group China/HKG above certain point of significance that justify sustained investments in promotion actions. In the fiscal year that is the basis for the comments that follow, it was placed in values of USD 10 million at some year of the five-year period 2005/2009.

• Register imports of the group China/HKG from Argentina or other countries of the South Hemisphere so they are empirically “plausible” sectors.

• They are not subjected to market access restrictions or said the removal of said restrictions are under negotiation.

• They have or allow some degree of differentiation: adequate production policies, promotion and marketing may imply some changes in their possibilities of market access.

The dimension of this universe was 12 billion dollars for 20097, but we have to consider that its growth is very dynamic, and should not be under 25% annual (historic high for the five-year period 2004-2009 was 22%) Participation of supplies of Argentine origin in that total was 2.4%, except for some articles that are faced with barriers whose removal is under negotiations.

A “conservative” scenario that may lead that participation at least to 5% in the next five years, or to a maximum 10%, which seems reasonably in terms of the Argentine production potential, would generate additional exports values over the current ones, between 300 and 900 million dollars, in both cases over “static” figures (excluding the increase in Chinese imports). By adding a moderate annual increase of 20% for the Chinese demand in this universe, we should be talking about a minimum of (5% share) additional 900 million dollars – a total of 1.5 billion and a maximum of (10% share) 2.2 billions (total 3 billion in 2015).

The amount exported by Argentina of same universe to every destination in 2009 was 9 billion dollars, so forth the additional impact would be between 10 and 25% of “current” Argentine exports of said goods.

6 Aún considerando las enormes diferencias entre el Continente y Hong Kong. Esta última es una región administrativa especial con autonomía aduanera y en la práctica sin existencia de barreras comerciales. Pero a largo plazo las pautas de consumo de Hong Kong son las que se imponen en el resto de China.

7 No se dispone aún cifras comparables para el 2010

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Foods in million USD. A turning point?

1990

2000

exports

7868

13559

33159

35885

35316

China

imports

4619

9043

32422

49521

45248

3249

4517

736

13637

-9932

Chinese demand, Argentine production, dimensions contrasted.

Some examples are:

•

China and Hong Kong imports of sheep, pig, and poultry meat are equal to or superior to the total Argentine production.

•

Chinese imports for this year represent one time and a half the Argentine whole milk powder production and three times the skimmed milk powder production, double exports expected for 2011 in the case of whole milk powder and are five times the expected exports.

•

However, current Chinese imports of bovine meat, cheese, fruits, confectionary, must of grapes and wines, represent relatively small proportions to the argentine production, though with variable implications according to products.

A complex market.

China continues to be a place in which the importance of centralized decisions is in force; make no mistake about this: Big corporations that trade abroad are intimately connected to decision making in Beijing, therefore this destination, more than in other, requires:

•

Support of state agencies, Knowledge about the interaction between the government and private sector, Possible review of available resources allocation.

So it is a matter of giving answer to the following: • • • • •

2008 2009

China

Trade balance

• •

2007

How to support programs of Argentine companies How to minimize entrepreneurial risk, especially in the cases of small and medium enterprises, How to attract Chinese investment in combination with the disposition of real and virtual distribution channel at destination How to support new developments in destination How to integrate these needs in a comprehensive and intelligent framework of State to State negotiation

Offer adaptation.

In addition to the impact on available production volumes, it cannot be overlooked the need for adapting or generating production that does not exist in the country yet, but it is demanded in China. This approximation includes from fruits variety adaptation, flour lines especially those apt to be cooked at destination, ingredients and preparations, to production of vegetables and specific preparations for the Chinese market, unusual in the market of our country.

Characteristics of the Chinese market. a) It is not one but many markets, differentiated by:

• • • • • •

Geographical distances Differences of income Different culinary cultures Cosmopolitan cities, with a strong presence of foreigners, Others from “hinterland” without an “international” diet.

Poor logistics infrastructure

Summary: We are before a scenario of new foreseeable enduring opportunities, not only due to production reasons but also to the Chinese demand of food. Such circumstances include not only current and potential trade flows, but new investment currents as well. The challenge is that in both cases the value chain from production to distribution is integrated and not broken at destination. Once it is accepted that the market is enduring, it is possible to foresee, at micro and macro levels, plans and efforts thinking in the medium and long term: issues such as the coordination of efforts, production and marketing structure organization, specific negotiations but also strategic and even physical logistics and transportation supports that are justified due to the volumes and terms to be managed.

b) The Chinese market is not only Beijing and Shanghai, or even provincial cities such as Changsha, Hunan, or Harbin, Heilongjiang but also “smaller” communities between 5 and 10 million inhabitants.

So forth there is a vast territorial extension to be covered through:

• • • • • • • • •

“commercial “antennas” support “platforms”: administrative Web 2.0 logistics, of distribution, of storage Preferably with local human resources, though not exclusively With different levels, forms and ways of distribution at destination.

Main distribution channels at destination, especially those chains of “big surfaces” that mainly concentrate imported foods offer, and new on line distribution channels, of huge growth and potential, may possibly require an adequate support for storage and cold chain in different locations. Issues such as geographical extension, heterogeneous income and consumer’s taste and the future part assigned to “second” or “third” level cities, will require at the same time multiple and localized support to give answers to them.

The Argentine offer has a disadvantage since the beginning. The principal imported foods distribution channel is generally hypermarkets, which are familiarized with trademarks and foreign products. But they also tend to develop groups of “favored distributors”. They are reluctant to work with unfamiliar trademarks unless they can offer a wide range of products, a strong marketing support and additional incentives that compensate hypermarkets for the effort and risk implied in changing or incorporating new product lines.

* The author thanks comments from Omar Odarda, Agricultural Attaché in Beijing, and Lin Yung, Advisor for the Ministry of Agriculture, Livestock and Fishery. Diego Muscará and Francisco Vener, of Proargex, provided the support for statistics processing.

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Special report

Azer bai jan Report written jointly by Fundaci贸n ExportAr and the Embassy of Azerbaijan in Argentina

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Azerbaijan: Getting to know a market with great strategic potential With the opening in 2010 of the embassy of Azerbaijan in Buenos Aires, the first one in South America, a new phase in strengthening bilateral relations with the biggest Caucasian economy started.

Official Name: Republic of Azerbaijan Capital: Baku Area:

86.600 km²

Population (2010):

9,2 millions

Government:

Presidencial Republic

International Cooperation:

UN, IMF, WB, OSCE, Council of Europe, CIS, Partnership Agrrement with NATO, European Neighbourhood Policy and Eastern Partnership of the EU

GDP (2010):

51,9 USD millions

GDP composition by sector (2010):

Industry: 52,6%, Services - social and informal: 11,9 %, Construction: 7,5%, Agriculture: 5,3%, Trade: 7,7%, Transport and Comunication: 7,7%,

GDP per capita (2010):

5.800 USD

Total investments (2010):

15,5 billion dollars

FDI (foreign direct investment) (2010):

3,1 billion dollars

Exports (2010):

21,3 billion dollars

Imports (2010):

6,6 billion dollars

Unemployment rate:

6% (2010)

Inflation:

5,7% (2010)

Foreign exchange reserves:

38 billion dollars (first quarter 2011)

Main cities:

Baku, Ganja, Sumgait, Nakchivan

Rwa material:

Petroleum, Natural gas, copper, gold, aluminium, mineral waters

Main harbours:

Baku (Biggest port of the Caspian Sea)

Air traffic:

Passengers and cargo flight to CIS, Europe, China and the Middle East

Major Airport:

Heydar Aliyev International Airport

Currency: Manat 64

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Why Azerbaijan?

After a strong fall at the beginning of 1990s, Azerbaijan experienced a gradual transformation from a planned economy to a market economy based on a developed and active private sector. Since 1997, with the strategy designed by their national leader Haydar Aliyev, the country started to achieve a stable and rapid growth for 13 consecutive years, multiplying its economic potential, sustaining the macroeconomic stability and carrying out economic and regulations reforms of a Wide scope that assure a sustainable environment for doing business and investments.

Particularly, in the last seven years, its economy has experienced an outstanding boom during which the GDP of the country has trebled with an annual average growth of 17%. Growth high record was observed in 2006 which represented 34.5 %. Even during the period of the world crisis it managed to maintain a high level of growth of 9.3% of GDP in 2009. The country’s budget in 2003 was 1.2 billion dollars, and in 2010 reached 20 billion.

This country is the region leader as regards foreign direct investment. In 2005 the Trade & Investment publication of UNCTAD placed Azerbaijan as the number one at world level due to its FDI. It is worth mentioning that it is also in the top 20 because of the attraction of own capital in absolute terms. During the independence period USD 97 billion have been invested into its economy, out of which 42 billion were destined to the oil and gas sector, mainly by foreign investors.

Long scale development has contributed to the country with huge money resources in a relatively short term, around USD 34.2 billion. The importance of an effective management from oil and gas incomes has led to the creation of a special stabilization fund “State Oil Fund of Azerbaijan Republic (SOFAZ)”, a transparent public agency under state control that currently accumulates USD 27 billion. The creation of SOFAZ was one of the measures adopted by the government to reduce the country’s dependence on oil income and to avoid the so called “Dutch disease”.

The Extractive Industries Transparency Initiative (EITI) under the UN framework has granted Azerbaijan the “EITI Prize 2009” for its commitment towards the principles and criteria of the initiative and the achievements in its implementation. The Strategy of economy diversification, that includes the development of regions of the country and non oil sectors, it is also a priority.

Azerbaijan economic achievements have been highly appreciated by international organizations. The Report “Doing Business 2009” of the World Bank named this country as the world reformer leader because of its regulations for business. The country experienced a jump from 97º to 33º in the ranking of facilities for doing business, among 181 economies (the biggest jump ever recorded by the World Bank). Azerbaijan improved in seven out of ten indicators, climbing up 64 positions in the ranking.

Reforms have fostered areas such as starting business, employment, property registry, credit lines, tax payment, and investor protection. In the Report 2010, Azerbaijan has significantly improved its general classification in the “Doing Business” index of World Bank from position 99º among 175 countries in 2007 to position 38º among 183 countries between 2009 and 2010. The key component to assure such a high position was the “one-stop-shop” system introduced in 2009 that lowered costs and paperwork associated to starting up a business in the country. As regards Global Competitiveness Report 2010-2011, Azerbaijan not only surpassed its neighbors but also countries such as Greece, Brazil and countries of CIS. These achievements are also highlighted by international ratings agencies. In 2010, Fitch Ratings agency improved the long term national credit classification to BBB and short term credit classification to F3, which means a satisfactory solvency level and an adequate capacity to meet financial commitments in term.

All of these have turned Azerbaijan into a regional leader that concentrates 80% of the economy and 95% of financial resources of the entire South Caucasus region. Today it is the fosterer of all initiatives towards regional integration and development that unites Eastern Asia to Europe and countries from the North to the Middle East region.

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The main factors which have guaranteed economic and social prosperity of Azerbaijan, and which have made the country a favourable destination for international trade and investments are:

Abundant Resources The country is rich in mineral resources and natural diversity. Caspian Sea’s oil and gas reserves are one of the biggest fields at world level. Many considerable deposits have also been explored such as those of precious metals (including gold and silver), ferrous and non-ferrous metals, deposits of different raw material for construction, and so on. One of the principal resources of the country is its natural diversity. Despite the relative small size of the country, the territory has nine types of climate ranging from wet subtropical to sub-arctic, due to its terrain and geography. This creates unique opportunities for agriculture and tourism.

Strategic location and access to emerging markets Azerbaijan is located at the Southeast border of Europe and is the natural bridge between Europe and Central Asia. It is the most convenient route from Europe to the Middle East. The country is also the logistics centre of the Caspian region. The excellent structure of its capital city, Baku, which has the biggest marine and air terminals of the region, continues to be the best option for any company wishing to enter the markets of the South Caucasus, Caspian Sea and Central Asia regions that altogether represent a consumption capacity of 200 million inhabitants. It is also part of a series of regional trade initiatives including the Transport Corridor Europe -Caucasus- Asia (TRACECA) and (North-South Transport Corridor) between Russia, Azerbaijan and Iran. These projects are designed to foster international trade through the routes above mentioned by the coordination of trade and tariffs policies, improvement of infrastructure, simplifying customs procedures, and so on. The impact of said initiatives on Azerbaijan’s international trade and status as regional transport centre is substantial, in addition to the modern energy infrastructure of the country, including Baku-Tbilisi-Ceychan, Baku-Supsa and Baku-Novorossiyisk oil pipelines, as well as Baku-Tbilisi-Erzurum gas pipelines, which have a key role in mineral oil transport from the Caspian basin to international markets.

Political and economic stability Among the main comparative advantages for doing business in Azerbaijan are the political and macroeconomic stability of the country in addition to Baku’s reputation as the only metropolitan capital in the Caspian Sea. It also outstands for being one of the most rapid growing economies in the world.

Foreign direct investment and trade welcoming laws Legislation is evolving in accordance with the strategic objective of the government towards a “welcoming policy” for foreign companies. Foreign investments are protected by certain guarantees against adverse legislation changes, nationalizations and requisition, compensation for damages guarantee, and repatriation of profits.

As regards commercial rules, there are no general obstacles to trade related to import of any kind of goods in Azerbaijan and there exists a minimum level of non commercial barriers for international trade. Regarding the export of goods, they are not subject to customs duties and restrictions. The country’s legislation recognizes different customs regimes applicable to imported goods, which the most relevant ones for foreign investors are: transit, customs warehousing, temporary importation, processing in or outside customs territories. In case of temporary importation, no duties are applied and goods must be re-exported from Azerbaijan until the limit deadline established by customs authorities. Goods introduced under the temporary importation regime must be re-exported without any substantial changes to the nature of goods.

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Free Trade agreements Azerbaijan has signed free trade agreements with some countries of the Community of Independent States (Russia, Georgia, Ukraine, Moldova, Kazakhstan, Kyrgyzstan, Turkmenistan, Uzbekistan, and Belarus). Likewise, it has signed a trade agreement with the European Union by which it receives MFN (most favored nation) treatment. In addition, commercial regimes issued by the EU, US and Japan under the generalized system of preferences (GSP) have created new access opportunities to the market. Also economic relations with BSEC (Black Sea Economic Cooperation), ECO (Economic Cooperation Organization), EFTA (European Free Trade Association), OECD (Organization for Economic Cooperation and Development), and other international organizations are being fostered.

Special fiscal regime Under PSA’s regime (Production Sharing Agreement on “upstream” exploration of oil and gas) contractors and their agents and subcontractors have the right to import and re-export from Azerbaijan, free of duties and restrictions, resources used in mineral oils activities. Imports under PSA regimes enjoy VAT exemption. A similar regime is applied under the HCA (Host Country Agreement on “downstream” projects of oil and gas).

New fiscal regime for the agricultural sector On 25J anuary 2011 the Government of Azerbaijan enacted a new fiscal regime for the agricultural sector that includes VAT exemption on agricultural products and technologies imported to the country. The purpose is to develop the agricultural sector and support production and processing of foods. This regime will be in force until 1 March 2014.

Competitive production costs Azerbaijan has a long tradition in industry and commerce. The industrial revolution in the country took place by the end of the XIX century due to the expansion of the oil production and processing sector. Further industrial development has contributed to enlarge the research and development basis (R & D). A big R&D centre, the National Academy of Science, has near 7,000 research studies, and coexists with a wide number of universities and institutions. The country has a vast knowledge in engineering, although salaries continue being very competitive. Azerbaijan’s policy on public services taxes for manufacturers is favourable too.

A solid institutional framework A series of initiatives and instruments have been introduced by the government with the purpose to strengthen the entrepreneurial environment of the country. In addition to the State communication legal framework through ministries and agencies, foreign companies may resort to agencies such as Export and Investment Promotion Foundation (AZPROMO), aimed at fostering trade, exports, and non-oil investments (for further information visit: www.azpromo.az).

Other government initiative is the Azerbaijan Investment Company (AIC), a state owned corporation with the purpose to implement fixed term capital investment in the private sector and promote FDI in the non-oil sector (for further information visit: www.aic.az).

Possibilities for Argentina Everything before mentioned sets a solid basis to foster Argentine companies’ interest in Azerbaijan, a country offering favourable investment and trade opportunities for emerging markets, as well as huge perspectives for the Caspian Sea, South Caucasus and Central Asia regions. The biggest potential for Argentina is in the following sectors: metalworking; oil and gas; alternative energy technology and know-how; agriculture; wine; plants for fruit, vegetables, dairy products and meat processing; refrigerating facilities and storage; health equipment; construction and infrastructure materials and technologies; pharmaceuticals; cereals and derivatives; and so on. One of the tools for studying the market and its potential is assisting to sectoral fairs held in Azerbaijan and that are recognized as the most important events in the region. The embassy of the Azerbaijan Republic is willing to cooperate with all those companies interested in discovering the possibilities this market offers to them.

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Bilateral Relations with Argentina

Diplomat relations between Azerbaijan and Argentina were established as of 9 March 1992, and the two countries signed a protocol establishing diplomat relations on 8 November 1993. With this protocol, Argentina has designated an Ambassador to Moscow accredited also to Azerbaijan.

On 3 April 2006, the Minister of Foreign Affairs of the Azerbaijan Republic, Mr Elmar Mammadyarov came to visit Argentina. During his visit, the Minister Elmar Mammadyarov had meetings with the Argentine Foreign Affairs Minister, Mr. Jorge Taiana; the Vice President of Argentina, Mr. Daniel Scioli; the Minister of Public Investment and Services, Mr. Julio De Vido; and had signed a Memorandum of Understanding and Visa Exemption for diplomats, Public Officers and Service Agreement between the two countries. That visit was very important for determining cooperation perspectives for the two countries.

In 2007, accredited diplomats of Argentina to Azerbaijan moved to the Argentine embassy in Ankara, and on March 5 of same year Ambassador Sebastián Lucas Brugo Marcó presented its credential letters to the President of the Azerbaijan Republic, Mr.Ilham Aliyev.

On 10 June 2009, an exploring trade mission integrated by members of the Argentine Foreign Affairs Ministry and the Public Income Federal Administration (AFIP) visited Azerbaijan. On that occasion, many interviews were held with Azerbaijan authorities, among which it is worth mentioning those maintained with the Vice Minister of Foreign Affairs, Mr. Mahmud Mammad-Guliyev and the Vice Minister of Agriculture, Mr. Bahram Aliyev.

In 2010, the Government of Azerbaijan made the decision to open an Embassy in Argentina, the first South American diplomat mission, and on 25 May 2010 the President of the Azerbaijan Republic, Mr. Ilham Aliyev, signed the decree appointing Ambassador Extraordinary and Plenipotentiary, Mr. Mammad Ahmadzada, of the Azerbaijan Republic in Argentina, who presented his credential letters to the President of Argentina, Mrs. Cristina Fernandez de Kirchner on 1 November 2010. With the settlement of the Azerbaijan Embassy in Buenos Aires, the relations between the two countries have entered a period of evident development.

That decision from the Azerbaijan government has been highly appreciated by the Argentine government and it translated into the visit paid by the Argentine Vice Minister of Foreign Affairs, Mr Pedro D’Alotto on 24-25 November 2010, during which it was held the first meeting on Politics Consultations between two countries. The Vice Minister Alberto Pedro D’Alotto was welcomed by the Azerbaijan Minister of Foreign Affairs, Mr Elmar Mammadyarov, and held meetings with the Minister of Agriculture, Ismat Abbasov; the Vice Minister for Economic Development, Sevini Hasanova; the Vice Minister of Foreign Affairs for Bilateral Matters, Khalaf Khalafov; the Vice Minister of Foreign Affairs for Economic Cooperation, Mahmud Mammad-Guliyev; the Vice Minister of Foreign Affairs, and the Dean of the Diplomacy Institute of the Ministry of Foreign Affairs, Hafiz Pashayev; and the Vicepresident of the State Oil Company of Azerbaijan (SOCAR) Davud Mammadov. On that occasion, there were signed between the two Ministries of Foreign Affairs a Memorandum of Understanding on Politics Consultations between the two countries; and a Memorandum on Cooperation between the Azerbaijan Diplomacy Institute of the Ministry of Foreign Affairs and the Argentine Foreign Service Institute. During those meeting topics related to bilateral agendas and regional mutual interest were discussed. Reference was made to opportunities for the participation of Argentine companies in Azerbaijan’s development particularly in the energy, agricultural and pharmaceuticals sectors.

On 21-25 February, the President of State Customs Committee of Azerbaijan, Mr Aydin Aliyev, visited Argentina upon the invitation by authorities from AFIP, and held meetings with the Authority of the Public Income Federal Agency, Ricardo Echegaray, and the Argentine Customs Director, Siomara Ayerán, that were followed by the signature of Inter- government Agreements on cooperation and mutual assistance in customs matters. Likewise, during his visit, Mr Aydin Aliyev, had met with the Minister of Industry, Débora Giorgi; the President of the Argentine Industrial Union, Lic. Miguel Acevedo; and the President of the Buenos Aires Stock Market, Mr Adelmo Gabbi, and discussed the perspectives on economic cooperation development between the two countries.

On 10 March 2011, the Argentine Ambassador in Turkey accredited to Azerbaijan, Mr

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Armando José Maffei, presented his credential letters to the President of the Azerbaijan Republic, Mr. Ilham Aliyev.

On 19 April 2011, within the framework of the International Summit on Safe and Innovative Uses of Nuclear Energy held in Kiev (Ukraine), the Argentine Minister of Foreign Affairs, Héctor Timerman, held a meeting with the Prime Minister of Azerbaijan, Mr. Artur Rasizada, and both congratulated the recent opening of the Azerbaijan embassy in Argentina, and highlighted the potential of bilateral relations and wide possibilities on economic and political cooperation. The Prime Minister of Azerbaijan expressed the interest of his country in agricultural machinery and energy technology developed by Argentina, and in turn the Argentine Foreign Affairs Minister, Héctor Timerman, focused on the importance of Azerbaijan as a linking country between Europe and Asia.

During 28 - 30 June 2011, the General Customs Director, Mrs Siomara Ayerán, visited Azerbaijan to perform customs exchange information between the two countries.

Trade exchange The current stage of political bilateral relations allow inferring an important economic dynamics in the short and medium term, though trade between the two countries is currently meagre, though it registered a strong growth since the beginning of this decade. At the same time, it is worth to mention that Argentina has had trade surplus with Azerbaijan since 2004, and almost the totality of bilateral trade is explained by national sales. Following charts nº 1 and graphic nº1 show trade evolution between the two countries between 2004 and 2010:

Chart N° 1. Trade Balance Azerbaijan-Argentina.

In dollars Year

Azerbaijan’s exports

Azerbaijan’s imports

to Argentina

from Argentina

Trade balance

Total trade

-310.450

323.250

1.867.114

-1.751.914

1.982.314 5.392.649

2004

6.400

316.850

2005

115.200

2006

91.200

5.301.449

-5.210.249

2007

70.400

8.591.266

-8.520.866

8.661.666

2008

96.000

17.744.657

-17.648.657

17.840.657

2009

56.038

19.941.209

-19.885.171

19.997.247

29.126.218

-29.109.155

29.143.281

2010

17.063

Source: own data based on WITS-COMTRADE

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Graphic N° 1. Trade Exchange Azerbaijan-Argentina. In dollars 35.000.000 30.000.000 25.000.000 20.000.000

Imports

15.000.000

Exports

10.000.000 5. 000.000 0 2004

2005

2006

2007

2008

2009

2010

Source: own data based on WITS-COMTRADE

An important part of the trade growth registered can be explained by purchases from the Azerbaijan Republic. Azerbaijan imports from our country have shown a growing tendency in amounts traded since 2004, and in contrast to purchases said country performs from other countries; ours did not decrease due to the negative effects of the world crisis at the end of 2008. During the analyzed period important increases of imported values have been registered allowing in 2010 Argentine shipments to be 46.1% higher over those of 2009. If the analysis is extended to 2004 values, it is possible to affirm that Argentine products demanded from Azerbaijan have had an explosive raise, since said increase is of 9,092.4%.

Likewise, sales from Azerbaijan to our country have never been superior to 115.200 dollars during the analyzed period, what means that they have had a minor participation in the bilateral exchange, and it never represented more than 5.8% of the total traded amount.

In contrast to Azerbaijan demand of Argentine products, sales from this Caucasus nation did not show a stable trend, combining increasing and decreasing cycles. Currently exports from Azerbaijan to Argentina are 116.6% superior than those of 2009, though it is important to highlight that they are for low amounts, during 2004 purchases were only for 6.400 dollars whereas in 2010 they were for 17.063 dollars.

Graphic N°2. Bilateral Trade Share,1% 2004-2010 Azerbaijan

Argentina

99%

Source: own data based on WITS-COMTRADE

A detailed analysis of Argentine sales shows that Azerbaijan imports from our country in recent years are characterized by a strong concentration in a reduced number of sectors. In fact, 83.4% of total purchases from Azerbaijan for the period 2004-2010 were in the following sectors: waste from the food industry (34.4 million dollars); pharmaceuticals (23.4 million); sugar and confectionary products (11.3 million). The total demand from the Eurasian nation of products from the sectors above mentioned was 69.1 million dollars, out of an exported total from our country of 82.8 million. Following, graphic nÂş3 shows the share of said sectors in purchases performed by Azerbaijan in our country for the period 2004-2010:

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Graphic N°3. Share by Chapter of Azerbaijan total imports from Argentina, 2004-2010 Other 16% Chapter 23 42% Chapter 17 14%

Chapter 30 28% Source: own data based on WITS-COMTRADE Chapter 23: residues of the food industry Chapter 30: pharmaceutical products Chapter 17: sugar and confectionery

Azerbaijan imports of waste from the food industry of any origin have reached in 2010 17.5 million dollars, being our country the principal supplier of said product. Purchases from this country are heavily concentrated since the four main selling markets to Azerbaijan in 2010 represented 91.5 % of the total: Argentina (35.9%), Russia (21.4%), Brazil (21%), and Ukraine (13.2%). It is also worth to mention the evolution of purchases Azerbaijan has performed in our country, registering shipments increase of 8.304% since 2004. It is important to highlight that 2010 values are not the biggest amounts registered for the period under analysis, since in 2008 Azerbaijan’s demand for Argentine products of Chapter 23 reached 11.1 million dollars, that is to say 76.6% more than in 2010.

Graphic N°4. Share by country in total Azerbaijan imports of waste from the food industry, 2010.

Other 8,5% Ukraine 13,2%

Argentina 35,9%

Brazil 21% Russia 21,4% Source: own data based on WITS-COMTRADE

As regards pharmaceuticals, Azerbaijan purchased products from 62 countries for an amount of 152.1 million dollars during 2010. As it had been verified for the demand of waste from the food industry, Azerbaijan imports are concentrated, though in a smaller percentage, since the five principal markets of origin concentrate 42.2%: Russia (12.4%), Switzerland (12.1%), Austria (7%), Turkey (5.5%), and Argentina (5.2%). Our country managed to reach the fifth place as supplier by sending pharmaceuticals for an amount of 7.9 million dollars. This period is similar to that of 2009, when Azerbaijan purchases reached their maximum high. As regards the rest of the previous years, it is worth to mention that purchases from the Caucasus country were almost non-existent during 2004 and 2005, reaching in 2006 exports of certain relevance for 262,000 dollars. In 2007, a strong inter annual increase was registered and started a growing stage that continues to date.

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Graphic N°5. Share by country in total Azerbaijan imports of pharmaceuticals, 2010

Russia 12,4%

Switzerland 12,1% Other 57,8% Austria 7,0% Turkey 5,5% Argentina 5,2%

As regards sugar and confectionary products purchases, Azerbaijan imported products from 34 countries for 208.2 million dollars during 2010. Again it can be seen a strong concentration in purchases, 92.1% can be explained due to the demand from four countries, highlighting the sugar dependency from Brazil (73% out of the total). Argentine shipments were among the four most important ones, totaling 11.2 million and providing for 5.3% of the total Azerbaijan demand during the last year under analysis. It is worth to mention that national sales under Chapter 17 registered a different dynamic than the two previous chapters. That is so since these products register a demand from Azerbaijan as of 2010, in contrast to products under chapters 23 and 30 that have been demanded throughout all the years under analysis. This was the most imported product to Azerbaijan from Argentina for the complete period under analysis, thus surpassing 11.1 million dollars this country purchased from our country of waste of the food industry in 2008. The fact that this is such a high amount and corresponds to the last period with available figures makes it impossible to state whether is a trend for the long term or an isolated case.

Graphic N° 6. Share by country in total Azerbaijan imports of sugar and confectionary, 2010.

Other 7,3% Argentina 5,3% El Salvador 6% 7,8% Brazil 73%

Source: own data based on WITS-COMTRADE

Following, chart nÂş2 shows the principal imported chapters to Azerbaijan from our country between 2004 and 2010:

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Chart N°2. Azerbaijan imports from Argentina. Principal Chapters. In thousand dollars R°

Main Chapters

1°

23 Residues and waste from the food industry

2° 3°

2004

2005

2006

2007

2008

2009

2010

75

649

2.370

5.362

11.131

8.596

6.303

30 Pharmaceutical products

2

60

262

1.250

5.923

7.964

7.940

17 Sugar and sugar confectionery

0

0

8

3

8

64

11.237

4°

15 Animal or vegetable oil and fats

0

0

2.174

85

0

1.454

1.674

5°

12 Oil seeds and oleaginous fruits

31

245

368

1.036

0

988

335

6°

04 Dairy produce; bird’s eggs; natural honey

0

0

0

167

466

254

776

7°

24 Tobacco and manufactured tobacco substitutes

0

742

12

0

0

176

208

8°

08 Edible fruits and nuts; peels of citrus fruits

80

21

17

86

119

55

132

9°

84 Machinery, equipments and mechanical appliances

0

2

0

347

0

0

13

10°

02 Meat and edible meat offal

0

43

39

118

0

147

12

11°

03 Fish, crustaceans and molluscs

0

93

0

0

3

29

102

12°

19 Preparations of cereal, flour, starch

89

0

3

9

25

49

40

13º

18 Cocoa and cocoa preparations

0

0

29

29

36

63

21

14º

87 Vahicles and tractore¡s

0

0

0

0

6

15

141

15º

22 Beverages, spririts and vinegar

0

0

0

32

0

76

0

16º

10 Cereals

0

0

0

0

0

0

95

17º

73 Manufactures od cast iron or steel

15

2

0

52

0

4

0

Other

25

11

20

16

28

8

98

Total

317

1.868

5.302

8.592

17.745

19.942

29.127

Source: own data based on WITS-COMTRADE

Posibilidades para Argentina All the above sets a solid basis to foster interest by Argentine companies in Azerbaijan, a country offering favourable investment and trade opportunities for emerging markets, as well as huge perspectives for the Caspian Sea, South Caucasus and Central Asia regions.

The biggest potential for Argentina is in the following sectors: metalworking; oil and gas; alternative energy technology and knowhow; agriculture; wine; plants for fruit, vegetables, dairy products and meat processing; refrigerating facilities and storage; health equipment; construction and infrastructure materials and technologies; pharmaceuticals; cereals and derivatives; and so on. One of the main tools for studying the market and its potential is attending the sectoral fairs held in Azerbaijan that are recognized as the most important events in the region. The embassy of the Azerbaijan Republic is willing to cooperate with all those companies interested in discovering the possibilities this market offers them.

Lastly, it is worth to mention that the current stage of political and economic relations open new opportunities to strengthen bonds between Argentina and Azerbaijan.

In this regard, the organization of mutual visits at different administrative levels and the improvement of legislation on cooperation are very significant for strengthening bilateral relations.

At the same time, this dynamic cannot set aside the private sector, so forth the importance of reciprocal Exchange between entrepreneurs, the organization of business forums and participation in sectoral exhibitions. Azerbaijan may be the door for Argentina to enter big markets in the Caucasus region, Central Asia and the Caspian Sea basin, thanks to traditional bonds and free trade agreements between the countries from those regions.

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International Fairs in Azerbaijan FALL 2011 13-15 September 2011 BIHE 2011 17th Azerbaijan International Healthcare Exhibition http://www.bihe.az/2011/

13-15 September 2011 STOMATOLOGY AZERBAIJAN 2011 6th Anniversary Azerbaijan International Stomatology Exhibition http://www.stomatology.az/2011/

13-15 September 2011 BEAUTY AZERBAIJAN 2011 5th Azerbaijan International Beauty and Esthetic Medicine Exhibition http://www.beauty.iteca.az/2011/

6-8 October 2011 EDUCATION & CAREER 2011 5th Anniversary Azerbaijan International Education and Career Exhibition http://www.education.iteca.az/2011/

19-22 October 2011 BAKUBUILD 2011 17th Azerbaijan International Construction Exhibition http://www.bakubuild.az/2011/

19-22 October 2011 AQUATHERM 2011 3rd International Exhibition for Heating, Ventilation, Air-Conditioning, Water Supply, Sanitary, Environmental Technology, Swimming Pool and Renewable Energies http://www.aquatherm.az/2011/

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19-22 October 2011 CASPIAN MEBELEXPO 2011 9th Caspian International Furniture, Interiors and Design Exhibition http://www.caspianmebelexpo. az/2011/

SPRING 2012

19-22 October 2011 CASPIANREALTY 2011 Caspian International Real Estate Exhibition http://www.iteca.az/

14-17 March 2012 AUTOPARTS 2012 5th Azerbaijan International Spare Parts, Accessories and Service Equipment Exhibition http://www.autoparts.az/2012/

19-22 October 2011 CIPS 2011 4th Caspian International Protection, Security and Rescue Exhibition http://www.cips.az/2011/

2 – 4 de Noviembre 2011 CTE 2011 Caspian: Technologies for Environment International Environmental Exhibition and Conference http://www.cte.az/2011/

23-26 November 2011 BAKUTEL 2011 17th Azerbaijan International Telecommunications and Information Technologies Exhibition and Conference http://www.bakutel.az/2011/

14-17 March 2012 AUTOSHOW 2012 8th Azerbaijan International Automotive Exhibition http://www.autoshow.az/2012/

12-14 April 2012 AITF 2012 11th International Travel and Tourism Fair http://www.aitf.az/2012/ 12-14 April 2012 HOREX 2012 6th Caucasus International Hospitality Exhibition http://www.horex.az

16-18 May 2012 WORLDFOOD AZERBAIJAN 2012 18th Azerbaijan International Food Industry Exhibition http://www.worldfood.az

16-18 May 2012 AGRIHORT AZERBAIJAN 2012 4th Azerbaijan International Agriculture Exhibition http://www.iteca.az/?year=2012

16-18 May 2012 PLASTEX 2012 2nd Caspian International Plastics and Rubber Exhibition http://www.plastex.az/2011/

5-8 June 2012 CASPIAN OIL & GAS 2012 19th International Caspian Oil and Gas Exhibition Incorporating Refining and Petrochemicals http://www.caspianoilgas.az

6-7 June 2012 CASPIAN OIL & GAS CONFERENCE 2012 19th International Caspian Oil and Gas Conference Incorporating Refining and Petrochemicals http://www.oilgasconference.az

13-15 June 2012 TRANSCASPIAN 2012 11th International Transport, Transit and Logistics Exhibition http://www.transcaspian.az/

13-15 June 2012 ROAD & TRAFFIC 2012 2nd Caspian International Road Infrastructure and Public Transport Exhibition http://www.roadtraffic.iteca.az

Activities Fairs Rounds Commercial promotion Training

Fairs Nafsa 2011

Vancouver, Canada 29 May – June 3 Education

Nafsa 2011 fair was held at the Convention Centre in Vancouver, hosting 400 exhibitors and 7,000 professional visitors. FundaciĂłn ExportAr, the Export promotion agency of the Argentine Ministry of Foreign Affairs, together with the Secretariat for University Policies of the Argentine Ministry of Education, under the Program for the Promotion of the Argentine University; and the Foreign Trade General Directorate of the Ministry of Economic Development of the Government of the City of Buenos Aires, coordinated, for second year in a row, the Argentine Pavilion at the fair.

Edition 63 of Nafsa’s annual conference and exhibition was aimed at fostering the promotion of public policies, expanding knowledge on the sector, and keeping a strong organization by gathering chains of education agents. Year after year, this fair becomes a strategic participation and meeting point for Argentine universities to interact with foreign universities, international agents, and international student counsellors, exchange program developers, and services providers from the rest of the world.

The fair was attended by 30 Argentine universities and a delegation of 43 representatives from public and private institutions. The Pavilion was set up over a surface of 108 m2 and had a great impact because of its design and the display of images of our country attracting a big number of visitors.

This event enabled institutions to make a total of 250 contacts and to accomplish their participation objective.

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Fairs XXIII International Exhibition “Agro 2011” Kiev, Ukraine 2-5 June Agricultural machinery

Fundación ExportAr participated in the XXIII International Exhibition “Agro 2011”, the international trade show for the agricultural machinery sector. This was a joint activity coordinated with Agencia ProCórdoba, the Province of Santa Fe, the Argentinean Chamber of Agrimachinery Manufacturers (CAFMA), and the National Institute of Agricultural Technology (INTA), also with the support from the Argentine Embassy in Kiev, Program of Aid for Trade from the Argentine Ministry of Foreign Affairs (PDCEX) and Fundación ExportAr. Over a surface of 102 m2 the Argentine Pavilion was set up and there were present Argentine companies from the sector.

By fixing this activity as part of the annual calendar of activities, the Fundación tries to promote the internationalization of products manufactured by metalworking value chains.

The task carried out from the Argentine embassy in Kiev helped to organize within the activities of the fair a Seminar called “Argentine Technology. Advances in Eastern Europe”. The lecturers of the seminar were Mr Mario Bragachini, Cristiano Cassini and Javier Pognante, from INTA. The national production of agricultural machinery is concentrated mainly over the provinces of Buenos Aires, Córdoba, and Santa Fe. It is organized in chambers and regional institutions that provide support to manufacturer companies and develops joint activities with the INTA for improvements in productivity and performance by the implementation of new high tech techniques. Fundación ExportAr and ProArgentina jointly designed a program to approach target markets such as South Africa, Australia, Russia and Ukraine.

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Snackex 2011 Barcelona, Spain 13-14 June Food

In the exhibition centre Gran Vía II of the city of Barcelona, Snackex was held. This event is the most important and specialized exhibition in the salt snacks and nuts in Europe, and is organized by ESA – European Snacks Association, that takes place every two years changing the location for each edition (last edition was held in Berlin).

During the fair, at the same time, there was held a congress that gathered the principal actors of peanuts, walnuts and jams world trade. “The Argentine production of peanuts is mainly concentrated in the province of Córdoba and is under a continuous process of technology incorporation and production growth, mainly oriented towards high quality peanuts for human consumption.

This orientation of the Argentine production is consistent with international market trends which mainly demands peanuts, and to a lesser extent oil and pellets.

The European Union is a very important market for the Argentine peanuts production, which represents 60% of peanuts without skin exports and 70% of prepared peanuts exports.

Since the recognition Argentina has acquired as regards quality, Argentine peanut is being imported mainly to most demanding consumers (gourmet niches).

The Argentine stand had a surface of 25 m2, and was jointly coordinated by the CAM (Argentine Peanut Chamber), Agencia ProCórdoba and Fundación ExportAr. There participated 29 national companies mainly from the province of Córdoba.

Fairs FIME SHOW 2011 Miami, USA 10-12 August Medical Equipment

The Argentine Ministry of Foreign Affairs through Fundación ExportAr coordinates our country participation at FIME 2011, the annual and most important fair of medical equipment sector in the USA. Also the Ministry of Production of the province of Santa Fe will participate.

Among the variety of products and services of the sector, FIME will exhibit the last trend in medical technology, such as: electronic medical equipments, wheel chairs, hospital furniture, laboratory equipment, nursing, rehabilitation, orthopaedic products, sterilization products, intensive care and monitoring equipment, dental equipment, and diagnosis equipment, among others.

FIME is a place where to learn about new technologies, make commercial relations with colleagues, competitors and professionals of the sector.

Participation in this event, of high technical standards, contributes to the positioning, expansion and consolidation of the Argentine presence in foreign markets.

Companies have made different investments to consolidate their international positioning. In general, most of the investments have been into extension and renovation of machinery.

Likewise, companies have increased their investment in research with the purpose of focusing on the development of new designs and products.

New York International Gift Show 2011 New York, USA 13-17 August Gifts

Fundación ExportAr participates in the fair “New York International Gift Show”, the event that hosts more than 35,000 visitors from the 50 states and 85 countries. This fair is held twice a year, in January and August, in New York. In addition, 2,800 exhibitors show the most innovative trends in gifts for household or personal use.

The Argentine Pavilion is located at Pier 92, New York’s newest area over a surface of 40 m2. This is the biggest fair of gifts and decorative articles in the world. Due to its dimensions it is held in the convention center of New York along with two marine terminals and an exhibition room.

New York Gift exhibits from jewelry to home textiles, accessories, purses, leathers, cosmetics, perfumes, gardening, games; it is the gifts fair par excellence. New York International Gift Trade Show exhibits the last trends and products, merchandising, ideas and manufactures of the sector. This fair is designed for retailers and agents of retail companies.

Fundación ExportAr by participating in this fair wish to reflect the quality of craftsmanship, design and gift articles manufactured in our country so this would be translated into an increase of the exports in this sector.

This fair facilitates meetings and bringing the national offer closer to the international demand. Participation in this fair is an opportunity, as a business strategy, to introduce the exportable offer of companies and to strengthen commercial relations, as well as to positioning in the regional market. It is important to consider FIME as an international exhibition whose target is the Caribbean and Latin American markets.

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Fairs Abastur 2011

Mexico D.F., Mexico 31 August – 1 September Food, beverages, and supplies hotels and restaurants

Abastur 2011 is the most important international exhibition of the restaurants industry and hospitality sector and this year will be celebrating its 26 edition at the Centro Banamex.

This Fair, whose first edition was held in 1985, has become one of the fundamental events of Mexico and Latin America as regards suppliers of equipment, accesories, product, food and services for the sector. In addition, the latest trends and news will be displayed too.

5 star hotel chains and Big Tourism hotels, restaurants, cruises lines, cafeterias, catering, bars, and the hospitality industry perform their purchases at Abastur. Also important chambers, such as the National Association of Importers and Exporters, have a stand in this fair.

During the fair, significant events, contests, seminars and tastings will be carried out too.

Fundación ExportAr together with Fundación Banco Credicoop will participate for the first time with the Argentine Pavilion over a surface of 36 m2 divided into open stands in the premises of the fair.

This exhibition is held every year and convenes professionals from Canal HORECA (Hotels, Restaurants and Catering) of Mexico, a market that comprises almost 16,000 hotels, and more than 33,000 direct premises among which can be found bars, restaurants, night centres and cafeterias.

For this edition it is expected the attendance of 800 exhibitors and 23,000 professionals, visitors and local and international professionals as well.

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Rounds International Business Round Mercoláctea 2011 San Francisco, Córdoba 11 – 14 May Dairy

Within the framework of Mercoláctea 2011 fair held at the premises of the rural society of San Francisco City, the International Business Round of the dairy industry was carried out. In this activity participated Argentine companies and their counterparties from Colombia, Ecuador, Paraguay and Peru.

This ativity was the result of a joint effort between Fundación ExportAr, ProCórdoba Trade Promotion Agency and CFI (Argentine Investment Counsil). The entities coordinated activities including business meetings and visits to plants: Frusso Máquinas Embotelladoras SRL, Bauducco and ETI Industrial Technical Consulting settled along the main Argentine milk production region.

On the Argentine side 16 companies from the dairy sector participated. Likewise, the round was attended by 5 big importers/ distributors of the milk machinery industry. Participating foreign companies were: Harvestcomm S.A. (Quito , Ecuador); Inventagri (Quito, Ecuador); Equipamientos Industriales y Agrícolas SRL (Paraguay); Dominion Group Condor Food SAC (Lima, Peru); Coolechera Ltda. (Colombia).

The 5 operators showed their interest not only in the products offered by Argentine companies but also in the premises they visited, the quality of the offer and advised obtained from participating entities. The result of this promotion activity was trasnsactions perfomred with Argentine companies.

Rounds Art Business Center in Arte BA 2011 La Rural, Buenos Aires 19 – 23 May Art

At the premises of La Rural was held the fair Arte BA, one of the mos visited events in the City of Buenos Aires and the most important one in Latin America of the sector. The fair not only attracts general public but also is the meeting spot for the most outstanding collectors, galleries, artists and relevant persons from the national and international culture field.

Exhibitor galleries are selected by a strict curator committee; so forth galleries exhibit the best artwork at this event. Also there is a selection of galleries that promote emerging artists, where new trend in tha artmarket are outlined.

Fundación ExportAr attended the fair for the seond time, and set up a stand over a surface of 32 m2 where the “Art Business Centre” was, a business spot that facilitated meetings between curators, galleries and artists, and more than 250 contacts were made between artists, curators, art dealers, galleries, collectors and national and international fairs organizers.

The “Art Business Center” helped to survey the needs of a sector that is seeking new tools as regards trade promotion.

Again, Fundación ExportAr becomes a strategic partner for the sector by the design of facilitating mechanisms to have access to the presentation of artwork from artists at national and international fairs as well.

6º International Round of Buyers from Construction and Housing La Rural, Buenos Aires 30 May – 2 June Construction

Fundación ExportAr coordinated the “6° International Round of Buyers from Construction and Housing” jointly with Batimat Expovivienda, under the framework of Batimat Expovivienda 2011 Fair.

Buyers rounds gathered Argentine companies from the construction sector with the following foreing importers and distributors: Constructora Ginaca (Santo Domingo, Dominican Republic); Prodel Instal (Lima, Peru); Nexo Arqitectura E Construções LTDA (Poços De Caldas, Brazil); Casa Ferreira Gonçalves LTDA (Belo Horizonte, Brazil); and Cochez and CIA (Panama, Panama), a company that has 24 branches and outstands as one of the main companies of the construction sector in Panama.

Prode Instal Construcciones, was created in 1998 and has two stores in Peru, and it is devoted to providing technical solutions in construction, engineering, mantainance, new develompents and specialized services.

Nexo Arquitetura e Construções LTDA was created in 1998 with the purpose to work on construction and civil construction projects.

Casa Ferreira Gonçalves, was founded in 1943 and is dedicated mainly to the commerce of pipes, accessories and hydraulic and gas valves.

Constructora Ginaka, was created in 1984 and outsands as a building apartments, offices and shopping malls company in the Dominican Republic.

The profile of foreing companies invited to this event allowed to hold 96 meetings with 44 Argentine companies carefully selected to this end.

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Rounds 5º International Business Round Sial Mercosur 2011

La Rural, Buenos Aires 31 August – 2 September Supermarket

Under the framework of Sial MERCOSUR in addition to ASU conference it will be held the 5º International Business Round of the Supermarket sector. These rounds are jointly coordinated with Exposium América Latina and the United Supermarkets Association (ASU).

This promotion activity has been carried out by Fundación ExportAr for 5 years in a row, and last year 90 Argentine companies from the food and beverages sector (including 3 export consortiums which comprised 22 companies) and 11 foreign importers from stores, super and hypermarkets attended the event.

Given the wide variety of products displayed by national companies, the purpose was to comprise a variety of international markets and commercialization channels as well.

In last year’s edition participated buyers from the following countries: Brazil, Panama, Chile, USA, Colombia, Ecuador, Bolivia, Paraguay, Algeria and Tunisia. In that opportunity 405 meetings were held during the 3 days of the event.

For the round that will be held in Sial Mercosur 2011 so far the following foreing companies have confirmed their attendance: Intervan Distribution, Morocco; Premium Distribuidora, Brazil; Panaderías Castaño, Chile; Sik S.A., Benin; Continente Hierpmercados, Portugal; Zamboni Comercial S.A., Brazil; Metro Cash and Carry, Germany.

This year is also expected the same amount of participating companies from our country.

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Commercial promotion PINTA Londres 2011 London, United Kingdom 6 – 9 June Art and antiques

At the “Earls Court Exhibition Centre” was held the second edition of Pinta with record attendance compared to edition 2010. Since the opnening day, Latinamerican and European collectors, who came last year, visited the event attracted by the modern and contemporary art variety displayed by galleries, among which there where the following six Argentine galleries: Cosmocosa, Galería Matilde Bensignor, GC Estudio de Arte, Ruth Benzacar, Praxis Internacional Art and Teresa Anchorena.

In this edition, in addition to public and private collectors, also agents from museums such as Tate Modern of London, Pompidou Centre of Paris, University of Essex, MUSAC, Museo de Arte Contemporáneo de Castilla y León, Museo Reina Sofía of Madrid, Daros, among others, attended this event. They were invited under the “Program for the Acquisition of Museums”, which turned this event into an important platform to make and update contacts that benefit not only emerging and established artists but also galleries, art consulting and art dealers that represent them.

Pinta and auctions performed within the framework of this fair have proved to be effective in terms of profitability due to the varied offer of artwork from established artists to emerging Latin-American artists that presented their work there.

The second edition of Pinta surpassed the amount of visitors at the opening day, 30% more than in the previous edition, there were 2,500 visitors. During the three days of the exhibition near 5,000 visitors attended this event, 25% more public attending than edition 2010.

Commercial promotion 4º Promotion Edition On board the iDTGV

Paris, Toulouse, Hendaye, Lyon, Marsella 16 – 26 June Food

Fundación ExportAr jointly with the Argentine Embassy in France coordinated the “4º promotion edition on board the iDTGV”, carried out on the high speed train line (TGV) that connects the sections Paris-Toulouse, Paris-Hendaye, ParisLyon, and Paris-Marsella.

This activity started with a working lunch at the emblematic restaurant “Le Train Bleu”, located at the Lyon train station.

The embassy invited to this lunch 80 guests, such as Argentine restaurants in France, hotel chains representatives from Ritz, HMC Résidences & Hotel, Les Palmieres, representatives from SIAL Paris and buyers from Bateaux Six Huit, Food and Beverage International and Les Chais Saint Laurent, among others. Also there were invited different press media from Argentina and France. The Argentine Ambassador Aldo Ferrer was present at the lunch too.

Bar-coaches were decorated with Argentine themes banners and national music was played and Argentine products exhibited.

The following companies participated in this activity: Caro Import (with products from Arcor, Bagley and Mardel, among others), Compañía Americana de Alimentos (with its premium line of Alfajores and Dulce de Leche “Aires del Sur”), Havanna, Las Marías (with mate bags), Molino Cañuelas (with biscuits “9 de oro”, through the company Caro Import), Cervecería y Maltería Quilmes (Quilmes Cristal beer), La Virginia (coffee bags), La Salamandra (Dulce de Leche), La Elisa (organic honey) and Minitost (toasted croutons). All products were tasted at the lunch and on board the train as well.

Training Seminar: “How to export wines to strategic markets” 2011 Bodega Fabril Alto Verde, Pocito, San Juan 15 June

The Ministry of Production and Economic Development, the Secretariat of Commerce, Industry and Services through its Directorate of International Trade jointly with Fundación ExportAr coordinated the Seminar: How to export wines to strategic markets.

Fundación ExportAr invited the wine specialist Lic. Georgina Losada, advisor to the INV (Winemaking National Institute) and jointly designed a program to satisfy the needs of the sector.

The Directorate of International Trade was responsible for inviting the winemaking sector of the province and the dissemination of this event.

The seminar dealt with different topics related to wine positioning in strategic markets such as: USA, Russia, European Union, Brazil, China; revision of our export figures; requirements for wine export; and the legal framework of International trade, among others.

The seminar was attended by 35 wineries and advanced students. The opening ceremony was held by the Directorate of International Trade, and then Lic. Georgina Losada gave a lecture on Winemaking Practices and Labeling, as well as Argentine Winemaking Market update, specific rules, and analysis of opportunities for the sector.

The Seminar started with an introduction, and then took place the discussion of topics, and lastly the audience had some time to ask questions to lecturers and clear out doubts.

Likewise, in every train section Argentine themes boxes with products from the companies already mentioned were raffled, and also there was included a flyer with information of the Argentine companies in each theme box.

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Training Seminar: “How to export software to the US” 2011 Jujuy 30 June

Training cooperative workers and entrepreneurs in the design of successful business plans Posadas, Misiones 6 July

In the city of Jujuy took place the seminar “How to export software to the US” and the opening ceremony was held by Mr Gustavo Ortiz, Secretary for SMEs Development and Regional Integration of the province and engineer Oscar Tito from the Agency of Commercialization.

In addition, Mercedes Maceira from Fundación ExportAr introduced the services provided especially to small and medium enterprises by the Fundación.

Mr. Alejandro Vicchi gave a lecture on “Current reality of international trade of services. Export modalities” and also on “How to export software to the US”.

With regard to the export of professional services the following topic were discussed: Self diagnosis on competitiveness; market research, export strategy; internationalization of the company, planning and control actions, among others.

Likewise, in the first part of his lecture he discussed on: international commercialization (selling actions, missions, fairs); economic aspects: tax, currency and customs rules; legal aspects: contracts, opening of subsidiaries, trade mark registration; specific cases: copyrights, licenses, patents; other aspects: migration, rules for the professional practice; international agreements on trade of services, double taxation, among others.

In the second part, reference was made to the export of this service which is an economic, intangible, invisible and perishable activity (it cannot be stored) that demands a direct interaction between consumer and provider. Also reference was made to the Tax Regime with an explanation of the Federal Regime Code.

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The seminar destined for entrepreneurs and representatives of cooperatives was about “How to develop a successful business plan”. It was held at the Centro de Acceso of the Federal Investment Council (CFI) in Posadas city.

This seminar was carried out under the framework of export promotion activities for SMEs that are being implemented by the government of the province of Misiones through the Ministry of Cooperative, Mutual Action, Commerce and Integration jointly with Fundación ExportAr. The program included: a presentation on services provided by Fundación ExportAr; why a business plan and different types; fundamental aspects of a business plan; systemic thinking and vision; analysis and methodology in a real case of products export; analysis and methodology in a real case of regional services development; video and analysis on the two cases discussed during the seminar.

At the end of the seminar, the audience asked questions to lecturers

International Fairs Event

Sector

Country

Date

Book Biennal

Book

Brazil

01/09/2011

Expoprado

Multisectoral

Uruguay

07/09/2011

Asia Fruit Logistica

Fruits y Vegetables

Hong Kong

07/09/2011

World Food Moscow

Beverages / Foods

Russia

13/09/2011

Eaie

Education

Denmark

13/09/2011

Expocruz

Multisectoral

Bolivia

17/09/2011

Expoalimentaria Perú

Foods

Peru

22/09/2011

Biofach Latinoamérica

Organics

Brazil

05/10/2011

Liber

Book

Spain

05/10/2011

Anuga

Beverages / Foods

Germany

08/10/2011

Equipauto

Autoparts

France

11/10/2011

Frankfurt Book Fair

Books

Germany

12/10/2011

Pma

Fruits y Vegetables

USA

14/10/2011

China Educational

Education

China

15/10/2011

Interlift

Elevators

Germany

18/10/2011

Mercopar

Metalworking

Brazil

19/10/2011

Cphi

Pharmaceutical

Germany

25/10/2011

World Food Ukraine

Beverages / Foods

Ukraine

25/10/2011

Canton Fair

Multisectoral

China

31/10/2011

Habana International Trade Show

Multisectoral

Cuba

02/11/2011

Andina Pack

Packaging

Colombia

08/11/2011

America Food & Beverage

Beverages / Foods

USA

14/11/2011

Fiera Cavalli

Horse and related

Italy

15/11/2011

Agritechnika

Agricultural industries

Germany

15/11/2011

Food & Hotel China

Beverages / Foods

China

16/11/2011

Sial Middle East

Beverages / Foods

United Arab Emirates

22/11/2011

Guadalajara Book Fair

Books

Mexico

26/11/2011

Prishow

Race

USA

01/12/2011

L´Artigiano In Fiera

Crafts

Italy

03/12/2011

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International Business Rounds September - November 2011 Round

Sector

Date

International Business Round of Wine Buyers

Wine

01/09/2011

International Business Round of Fishing Industry

Fishery

01/09/2011

International Business Round of Cosmetics

Cosmetics

01/09/2011

International Business Round of Art Dealers

Art and antiques

01/09/2011

International Business Round of Fruits

Fruits and vegetables

01/10/2011

International Business Round of Agricultural Machinery

Agricultural machinery

01/10/2011

International Business Round of Electro-Lighting

Electronics

01/11/2011

International Business Round of Animation

Audiovisuals / Multimedia

01/11/2011

Product Positioning Program September - November 2011 Event

Sector

Country

Date

Fashion Show in Paris - 2nd

Fashion

France

01/09/2011

Edition

IT

USA

12/09/2011

Gratner´S Outsourcing Summit

Education

The Netherlands

19/09/2011

Education Workshop

Education

China

01/10/2011

Education Workshop

Audiovisuals - Multimedia

France

03/10/2011

Mipcom

Health

USA

25/10/2011

Congress Health Tourism

Health

Peru

28/10/2011

Congress Health Tourism

Education

Brazil

01/11/2011

Education Workshop

Education

Colombia

01/11/2011

Education Workshop

IT

Philippines

01/11/2011

Services Forum, Bpo and IT

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