PART I

Briefing
The Chilean Market
March 18th, 2013
Santiago, Chile
Patricio Cañete, Trade Commissioner
Embassy of Canada in Chile
AGENDA
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CHILE ECONOMIC BRIEF
CANADA – CHILE RELATIONSHIP
SECTOR OVERVIEW
KEY CONTACTS
Chile in a Snapshot
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Population – 17 M (Growth rate: 1.2%)
Workforce – 7.3 M (~37% women)
GDP (nominal, 2012) – US$ 268 B (IMF estimate)
GDP/capita (2012) – US$ 15,416 (IMF estimate)
GDP annual growth (2012): 5.6% (highest OECD
and second in SouthAmerica after Peru)
• Inflation – 1.5% (2012)
• Unemployment – 6.5 % (2012)
• Life expectancy – Male 75; Female 81 years
PART I : Chile’s economy
Chile GDP per Capita. US$ at PPP
Source: IMF (Oct. 2012)
25,000.00
20,000.00
15,000.00
10,000.00
5,000.00
0.00
Chile: World’s most open economy
•Trade = 86% of Chile’s GDP (Canada’s = 67%)
•FTAs with 59 markets (and counting):
Canada, Mexico, USA, Central America, South Korea, the
EU, EFTA, India, Singapore, New Zealand, Brunei, China,
Japan, Peru, Colombia, Australia, China, inter alia;
…and numerous Double Taxation Agreements
including Canada but none exists with the USA
•Duty-free access to 86% of world’s GDP
•December 2009: joined the OECD
PART I : Chile’s economy
Chile’s Industrial Makeup
Mining: Copper contributes around 57% of export earnings and
a key factor of development. The world’s largest copper
producer and exporter
Forestry: Significant resources (9.1 million hectares - 22% of
total area) mostly planted forests
Fisheries and Aquaculture: Essential to economy.
Traditionally fishmeal, now aquaculture - 2nd only to Norway
in salmon production (although halved due to ISA)
Agriculture: Key for employment. Big exporter of fruits,
vegetables, seeds, wine, some agro-industrial products
Services: Growing influence in economy as government
attempts to bring greater value-added from technology.
CORFO programs such as “Jump Start”.
Manufacturing: Concentrated in Greater Santiago
PART I : Chile’s economy
Best Countries to do Business
Source: Forbes Ranking Magazine, October 2011
1. Canada (4th in 2010)
2. New Zealand (3rd)
3. Hong Kong (2nd)
4. Ireland (6th)
5. Denmark (1st)
8. U.K. (10th)
10. United States (9th)
24. Chile (23rd)
26. Japan (27th)
31. Korea (30th)
32. Spain (33rd)
42. Peru (49th)
57. Mexico (55th)
60. Panama (67th)
Canada-Chile Relations: Key Facts
• Like-minded on democracy, human rights, open markets.
• FTA since 1997 has more than tripled two–way trade
($2.46 billion in 2012).
• Canada 3rd largest investor at $13.3 billion (StatsCan).
Key sectors: mining, energy, financial, chemical, forestry,
utilities, services, equipment. Strong CSR brand.
Chile’s Total Trade - USD$ 148B
Imports
billion US$
Exports
PART I : Chile’s economy
Canada-Chile Free Trade Agreement
• Entered into force in July, 1997
– Chile’s first full FTA
• Comprehensive
– covers trade in goods and services (including professional
services), investment and government procurement
• Results
– increasing bilateral trade and investment
• Closely follows the NAFTA model
– Amending agreement will expand coverage (financial services) and
include changes to the government procurement thresholds,
customs procedures, and dispute settlement
• Canada-Chile Partnership Framework
– MOUs on S&T, Sustainable Mining, Youth Mobility, Aquaculture
PART II : Canada in Chile
Canadian Exports to Chile
Total Exports 2011: $818.78 M; Total Exports 2012: $780.90 M.
The 10 largest exports to Chile at HS2 level are ($Cda M):
2011
155.59
95.80
113.74
2012
172.56
66.11
56.40
%
10.91
-30.99
-50.41
Machinery
Ores
Mineral fuel
its a commodity)
Electrical machinery
48.39
48.27
-0.25
Fats & oils
32.92
46.92
42.50
Cereals
55.39
42.40
-23.45
"wheat nes" from $0 to $38.66 M.)
Plastic
38.80
41.19
5.09
Vehicles
19.19
35.11
82.93
Inorganic chemicals
18.74
30.80
64.31
used in wood boards and in mineral processing).
Explosives
15.02
19.47
29.60
(large increases in boring, sinking machinery and parts)
(big decrease in molybdenum exports to Chile)
(coal decreased -20% and petroleum oils in -95.42%. Not strange as
(practically maintained the level)
(large increase in low erucic acid)
(decrease in "wheat nes" from $53.8 M to $0 and increase in another
(increase regardless of lower exports of raw material and film).
(large increases in dump trucks and special purposes trucks).
(large increases in sodium chlorate and sulphuric acid, which are
(detonators for mining explosives)
Chilean Exports to Canada
Total imports 2011: $1936.21 M; Total Imports 2012: $1680.44 M.
The 10 largest imports from Chile at HS2 level are ($Cda M):
2011
Precious stones
Fruit and nuts
Copper articles
Fish & seafood
Beverages
Wood
Ores
Inorganic chemicals
Seeds (grain and fruit)
Preserved food
878.39
351.07
144.19
102.61
100.66
64.38
49.69
31.82
25.51
36.27
2012
650.99
348.89
120.21
108.86
99.16
69.48
43.13
40.24
28.90
23.64
%
-25.89
-0.62
-16.63
6.09
-1.48
7.92
-13.21
26.44
13.32
-34.8
(mainly gold and silver for refining)
(mainly wine)
Canadian Investment in Chile
• Canada is #3 foreign investor in Chile ($13.3 B)
– 1st in mining
– In 2006, 2007, 2008 and 2010 Canada was the largest
source of new investment in Chile and the largest overall in
the last decade
• Chile ranks 9th (2.2%) destination for Canadian
investment abroad (5th excluding tax havens)
• Canadian investment has expanded beyond mining to
include financial services, transportation, utilities,
chemicals and engineering services.
PART II : Canada in Chile
SECTOR OVERVIEW
REAL ESTATE MARKET
• Booming real sector – high liquidity, rising
income, less available space, shortage of
properties for rent… not yet a bubble!
• Housing prices are expected to continue rising
• Housing sales increased in 19% during 2012
– 40,491 units; US$B 1.5 billion; Green Sale
– Ñuñoa (9), Santiago Centro (9) and La Reina (8)
• Cons - more congestion, higher prices and
greater compaction of the city
REAL ESTATE MARKET
• Santiago`s Office Market:
– 2,658,000 sqm
– 5 submarkets: Las Condes, Providencia, Vitacura,
Santiago Centro and Huechuraba
• Las Condes is the Business District – 54%
– Low vacancy and high demand
– Class A monthly rents vary US$ 25 – 34 /sqm
– Class A-B monthly US$ 17 – 25 /sqm
REAL ESTATE MARKET
• Las Condes has the largest volume of high-rise buildings and
accounts for 65% of all Class A office space in Santiago.
• It has the largest number of new developments and the most
expensive locations in Santiago.
– Costanera Center – 64 storey tower, 2 hotels, 40,000 people floating mall
– Parque Titanium – 3 new 23 storey buildings, 4 level parking
• Real Estate Sector Business Currency - UF
UF (Unidad de Fomento) is set daily in Chilean Pesos and indexed to the Consumer
Price Index (IPC) for the previous month, which is published by the Chile Central
Bank. A UF is the unit normally used for real estate transactions and valuations
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PROJECT NAME
CIUDAD VALLE LO AGUIRRE (PRADERA)
CIUDAD EMPRESARIAL Y AEROPORTUARIA PUDAHUEL
COSTA LAGUNA
PIEDRA ROJA
PROYECTO INMOBILIARIO CIUDAD PARQUE BICENTENARIO
SANTA FILOMENA DE COLINA
PARQUE COUSIÑO MACUL
PALMAS DE VIÑA
SANTA ELENA
LOTEO IZARRA DE LO AGUIRRE
MEGAPROYECTO COSTANERA CENTER
CIUDAD EMPRESARIAL
URBANYA
PARQUE RESIDENCIAL EL CHAMISERO
MEGAPROYECTO PUERTA DEL MAR
PORTAL DE LA FRONTERA
BARRIO BRISA DEL SOL SECTOR ORIENTE
LA RESERVA
CIUDAD CURAUMA
PLAN DE INVERSION 2008
PLAN DE INVERSIONES 2005-2007
LA SERENA GOLF
CIUDAD VALLE GRANDE
CERRO ALVARADO
CIUDAD PARQUE CHICAUMA
PLAN DE INVERSION 2011
PROYECTO LAS SALINAS DE VIÑA DEL MAR
PARQUE TITANIUM SANTA ROSA DE LAS CONDES
SAN ALFONSO DEL MAR
EL CARMEN DE HUECHURABA
REAL ESTATE DEVELOPER
USM$
EL BOSQUE S.A.
2000
INGENIERIA E INMOBILIARIA MANSO DE VELASCO S.A.1885
ACONCAGUA SUR S.A.
1800
INMOBILIARIA MANQUEHUE S.A.
1800
SUBSECRETARIA DEL MINISTERIO DE LA VIVIENDA Y URBANISMO
1070
MIGUEL NENADOVICH DEL RÍO
1000
CRILLÓN DESARROLLOS INMOBILIARIOS S.A.
973
QUISCAL S.A.
900
INMOBILIARIA VALLE NUEVO
850
INVERSIONES BAIONA LTDA.
838
CENCOSUD SHOPPING CENTERS S.A.
818
GESTORA DE PATRIMONIOS S.A.
800
INMOBILIARIA LAS LILAS DE PUDAHUEL LTDA.
750
EL CHAMISERO INMOBILIARIA S.A.
700
INMOBILIARIA LA CRUZ DEL MOLINO S.A.
700
DESARROLLOS UFRO S.A.
570
INGENIERÍA Y CONSTRUCCIÓN SAN ANDRÉS LTDA.
556
INMOBILIARIA LAS CANTERAS S.A.
500
PARQUES Y JARDINES LA LUZ
435
SACI FALABELLA
430
COMERCIAL ECCSA S.A
371
INMOBILIARIA LA SERENA GOLF S.A.
360
VALLE GRANDE S.A
350
P Y G LARRAÍN INVERSIONES LTDA.
345
INMOBILIARIA E INVERSIONES LAMPA S.A.
320
SACI FALABELLA
310
ILUSTRE MUNICIPALIDAD DE VIÑA DEL MAR
300
INMOBILIARIA TITANIUM S.A.
300
INMOBILIARIA EL PLOMO LTDA.
300
INMOBILIARIA MANQUEHUE S.A.
300
Private Public Partnerships
Private Public Partnerships
Key Players in your Industry
• AOA – Asociacion de Oficinas de
Arquitectos www.aoa.cl
Key Players in your Industry
• AdD – Asociacion de Decoradores de de
Chile
www.add.cl
Key Players in your Industry
• ADI – Asociacion de Desarrolladores Inmobiliarios
http://www.adi-ag.cl
Key Players in your Industry
• CBC – Corporacion de Bienes de Capital www.cbc.cl
MEDIA & ADVERTISING
• Vivienda y Decoracion (El Mercurio)
• Casas (Revista Cosas)
http://www.revistacasas.cl/
• MasDeco (La Tercera)
http://masdecoracion.latercera.com/
• Todo Obras www.todoobras.com
Embassy Trade Team
Peter Furesz
Senior Trade
Commissioner
Patricio Cañete
Trade
Commissioner
Gonzalo Muñoz
Trade
Commissioner
Brenda Wills
Trade
Commissioner
Margot Edwards
Trade
Commissioner
(INFO-CENTRE)
Loreto Moya
Commercial
Assistant
Maria Jose Soler
Commercial
Assistant
Renée Plouffe
Trade
Commissioner
Vacant
EDC Regional
Manager
Angeline Pacione
EDC Associate
Regional Manager
Patricia Villarroel
Commercial
Assistant
Tel.: +56-2-652-3800, Fax: +56-2-652-3915
santiago.commerce@international.gc.ca