martín gustavo ibarra president araujo ibarra & asociados s.a colombia: commercial platform for...
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Martín Gustavo IbarraPresident
ARAUJO IBARRA & ASOCIADOS S.A
Colombia: Commercial platform for the English exports towards the
United States
In the last 15 years the
U.S.A imports are growing in
average US$91.400
millons each year.
U.S.A is the biggest and dynamic import U.S.A is the biggest and dynamic import market in the world.market in the world.
491740
1,205 1,250
1,662
-
500
1,000
1,500
2,000
US$
TH
OUSE
NDS
OF M
ILLIO
NS
1990 1995 2000 2003 2005
IMPORTS GROWTH U.S.A 1990 - 2005
83% of goods 83% of goods imports are imports are
MANUFACTURESMANUFACTURES
IMPORTS ESTRUCTURE U.S.A 2005
11% 2%
83%
4%
MINERALS AND FUELS AGRICULTUREA AND CATTLE
MANUFACTURES OTHERS
TYPE OR WAY VALUE PART %PRICE
AVERAGE US$/KG
FREIGHT AVERAGE
US$/KGMARITIME 859 52% 0.91 0.05MULTIMODAL 444 27% n.d. n.d.AIR 359 22% 92.94 2.52Source: United States International Trade Commission
THE U.K IN THE UNITED STATES MARKET
THE U.K IS THE U.S.A. 6TH SUPPLIER
Source: USITC.
GROWTH IN U.S.A MARKET BY COUNTRY Mill US$
PLACE COUNTRY 1990 2005VAR IN US$99/05
1990 2005 TOTAL 491,322 1,662,380 1,171,058
8 2 China 15,120 242,638 227,518
1 1 Canadá 91,198 287,534 196,335
3 3 México 29,506 169,216 139,710
4 5 Germany 28,035 84,345 56,309
2 4 Japón 89,606 137,831 48,226
6 6United Kingdom
19,929 50,758 30,829
19 9 Malasia 5,224 33,695 28,471
34 13 Ireland 1,736 28,385 26,649
7 7 korea 18,337 43,155 24,818
28 18 India 3,198 18,710 15,512
THE U.K PAID 464 US MILLIONS IMPORT TAXES
93% OF THE EXPORTS FROM THE U.K TO THE U.S.A. ARE CONCENTRATED IN 10 SECTORS
EXPORTS BY SECTORS OF THE UK TO THE U.S.A MILLIONS
SECTOR 2000 2005 VAR % 00-05
TOTAL 42,843 50.758 3.4%
CHEMICAL AND PHAMACIST 6.627 9.221 6.80%
TRANSPORTATION EQUIPMENT 5.389 8.527 9.60%
MINERALS AND FUELS 3.824 7.944 15.70%
MECHANICAL MACHINERY AND EQUIPMENT 8.755 7.487 -3.10%
MACHINERY AND ELECTRICAL EQUIPMENT 3.519 2.763 -4.70%
INSTRUMENTS OF OPTICS, MEASUREMENT, SURGERY AND VETERINARIAN, CLOCKS AND MUSICAL INSTRUMENTS 2.331 2.515 1.50%
COMMON METALS AND THEIR MANUFACTURES 1.434 1.761 4.20%
AGROINDUSTRIAL 1.077 1.281 3.50%
PRECIOUS METALS AND JEWELRY 1.288 1.066 -3.70%
UK EXPORTS TO THE U.S.A (AIR)
19.5OO U.S $ MILLIONS
SECTOR % AERIALAERIAL FLEET
US$/KG
CIF AERIAL US$/KG
TOTAL 39% 1.99 110 PRECIOUS METALS AND JEWELRY 95% 3.38 1,976 INSTRUMENTS OF OPTICS, MEASUREMENT, AND QUIRURGICAL
86% 2.11 148
FOOTWEAR 79% 2.38 58 MACHINERY AND ELECTRICAL EQUIPMENT
78% 2.18 125
LEATHER AND ITS MANUFACTURES 72% 3.33 60 OTHERS 65% 1.92 241 MECHANICAL MACHINERY AND EQUIPMENT
58% 1.83 92
ARTICLES OF APPAREL 56% 4.51 105 CHEMICAL AND PHAMACIST 56% 2.48 235 DIVERSE MANUFACTURES 54% 1.64 34 CATTLE 51% 3.21 13
SECTORIAL EXPORTS FROM UK TO THE U.S.A. BY AERIAL 2005
PRODUCTS EXPORTED BY U.K THAT PAY MORE TAXES IN THE U.S.A. DOLLARS
PRODUCTS EXPORTED BY U.K THAT PAY MORE TAXES IN THE U.S.A. DOLLARS
SECTOR 2000 2005
TRANSPORTATION EQUIPMENT 6,513,505 161,518.000
CHEMICAL AND PHAMACIST 1,042,917 49,940.000
PLASTICS AND RUBBER 879,184 38,593.000
MACHINARY AND MECHANICAL EQUIPMENT
1,236,869 36,835.000
MACHINERY AND ELECTRICAL EQUIPMENT
1,176,067 31,457.000
MINERALS AND FUELS 6,564,459 27,468.000
APPAREL 197,546 27,341.000
COMMON METALS AND ITS MANUFACTURES
536,297 20,258.000
PRODUCTS EXPORTED BY U.K THAT PAY MORE TAXES IN THE U.S.A. TARIFF
PRODUCTS EXPORTED BY U.K THAT PAY MORE TAXES IN THE U.S.A. TARIFF
SECTOR 2005
APPAREL 13.8
CATTLE 10.6
FOOTWARE 8.4
MINERALS NONMETALISTS 7.7
TEXTILES 7.5
AGROINDUSTRIAL 5.7
PRECIOUS METALS AND JEWELRY 5.3
DISTRICTS OF ENTRANCE OF THE IMPORTS OF THE U.S.A. FROM UK
DISTRICT 2005 PART %Total 50,758 100%New York, NY 10,307 20%Houston-Galveston, TX 3,498 7%Chicago, IL 3,136 6%Charlotte, NC 2,988 6%Baltimore, MD 2,890 6%Los Angeles, CA 2,867 6%New Orleans, LA 2,592 5%Philadelphia, PA 2,494 5%Charleston, SC 2,239 4%Savannah, GA 2,090 4%Cleveland, OH 2,033 4%
DISTRICTS OF ENTRANCE OF THE IMPORTS OF THE U.S.A. FROM UK 2005 US$ MILLIONS
COLOMBIA ONE OF THE BEST POTENTIAL
PARTNERS FOR THE U.K IN LATIN AMERICA
WHY COLOMBIA? WHY COLOMBIA?
PACIFIC OCEAN
CARIBBEAN SEA
1. STRATEGIC LOCATION
ATLANTIC OCEAN
FORTALEZAS DE COLOMBIA
2. POPULATION2. POPULATION
COUNTRYINHABITANTS 2005
Mexico 105.33Colombia 42.60Peru 27.95Chile 16.09Ecuador 13.48Guatemala 12.96Dominican Rep. 8.98Honduras 7.32El Salvador 6.79Nicaragua 5.71Costa Rica 4.12TOTAL 251.34
ANDEAN COUNTRIES + CHILE = 104 MILLIONS
COUNTRY MARITIME (cents)
COLOMBIA 1.1UNITED KINGDOM 4
AVERAGE FREIGHT $val/Kg
FORTALEZAS DE COLOMBIA
3. MARITIME FREIGHT COST
THE US. IMPORT
THE 52% BY
SHIP
Araújo Ibarra & Asociados S.A.
THE UK EXPORTS
TO THE U.S.A
53% BY SHIP
TIME AND FREIGHT
COMARISON MAP
(MARITIME)
London- New York
6.5 days (25knots)
Colombian Caribean - Miami
2.5 days (25 knots)
Colombian Caribean- New York
4 days (25 knots)
London- Miami
7.7 days (25 knots)
MARITIME FREIGHT US (KG)MARITIME FREIGHT US (KG)
COLOMBIACOLOMBIA 0.010.01
UNITED UNITED KINGDOMKINGDOM 0.040.04
FORTALEZAS DE COLOMBIA
4. FREIGHT COST (AERIAL)
U.S.A IMPORTS BY
AIRPLANE 22.4%
THE UK EXPORTS
TO THE USA ARE
39% BY AIRPLANE
COUNTRY AERIAL
Colombia 1.01United Kingdom 1.99
AVERAGE FLEET $US/Kg
TIME AND FREIGHT
COMARISON MAP (AERIAL)
London- New York
11 hs.
Bogotá - Miami
3 hs.
Bogotá- New York
5 hs.
London- Miami
9hs.
AERIAL FREIGHT US (KG)AERIAL FREIGHT US (KG)
COLOMBIACOLOMBIA 1.011.01
UNITED UNITED KINGDOMKINGDOM 1.991.99
5. COLOMBIA HAS THE CHEAPER
KW/HOUR OF THE REGION
FORTALEZAS DE COLOMBIA
6. COLOMBIA HAS ABUNDANT AND
ECONOMIC WATER
UK Kw/h = US $ 0.8
Col Kw/h= US $ 0.1
7. COLOMBIA HAS A FLEXIBLE LABOR LEGISLATION AND COMPETITIVE LABOR FORCE INCLUDING BENEFITS
AVERAGE MONTH WAGE US$
WORKER
COLOMBIA 190DOMINICAN REP. 222HONDURAS 242PANAMA 307COSTA RICA 315
COUNTRY UK 4.4 GBP/HOUR =
1330 US $ MONTH
8. BETTER FTA AGREEMENT COLOMBIA- USA (vs. NAFTA)
FORTALEZAS DE COLOMBIA
MX NAFTA FTA
NATIONAL ADDED VALUE
50% - 62% 35% - 45%
FREE
FTZ. FREERAW MATERIALS TAXED FTZ
INCOME TAX 2007 28%35% o 15%
FTZ
IMPORT OF MACHINERY AND EQUIPMENT
TAXED
9. SECURITY LEVEL HAVE INCREASED CONSTANTLY
FORTALEZAS DE COLOMBIA
Public Security Index, Citigroup (2000 – 2006)
30405060708090
100110120
2000
BA
SE
Sep
-02
Nov
-02
Jan-
03M
ar-0
3M
ay-0
3Ju
l-03
Sep
-03
Nov
-03
Jan-
04M
ar-0
4M
ay-0
4Ju
l-04
Sep
-04
Nov
-04
Jan-
05M
ar-0
5M
ay-0
5Ju
l-05
Sep
-05
Nov
-05
Jan-
06
Public Security Index, Citigroup (2000 – 2006)
30405060708090
100110120
2000
BA
SE
Sep
-02
Nov
-02
Jan-
03M
ar-0
3M
ay-0
3Ju
l-03
Sep
-03
Nov
-03
Jan-
04M
ar-0
4M
ay-0
4Ju
l-04
Sep
-04
Nov
-04
Jan-
05M
ar-0
5M
ay-0
5Ju
l-05
Sep
-05
Nov
-05
Jan-
06
30405060708090
100110120
2000
BA
SE
Sep
-02
Nov
-02
Jan-
03M
ar-0
3M
ay-0
3Ju
l-03
Sep
-03
Nov
-03
Jan-
04M
ar-0
4M
ay-0
4Ju
l-04
Sep
-04
Nov
-04
Jan-
05M
ar-0
5M
ay-0
5Ju
l-05
Sep
-05
Nov
-05
Jan-
06
10. INCENTIVES
Santa Marta
Barranquilla
Cartagena
Quindío
Río Negro
Cúcuta
Bogotá
Palmaseca
Source: Ministerio de Comercio, Industria y Turismo, Proexport
FREE TRADE ZONES
15% INCOME TAX
NO REMITTANCE TAX
NO VAT
NO TAXES FOR RAW MATERIALS , SPARE
PARTS AND EQUIPMENT
INTERNATIONAL LEASING
FLUX (1994 – 2005) US$ MillIions
10. FOREIGN INVESTMENT
1,447968
3,112
5,562
2,829
1,5082,1391,758
3,117
10,192
2,3952,525
0
2,000
4,000
6,000
8,000
10,000
12,0001
99
4
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
Fuente: Balanza de Pagos Banco de la República, cálculos Proexport.
11. NEWEST FOREIGN INVESTMENT PROYECTS IN THE COUNTRY
• Cartagena refinery, (Glencore) Investment: US$ +/- 520 Millions
• El Dorado Airport (Opain-Flughafen) Investment: US$ +/- 500 Millions
• Coal investment (Drummond) Investment: US$ +/- 1000 Millions
• El Cerrejon (Glencore/Billington)
• Investment: US$ +/- 1000 Millions
Near 700 multinational companies have operations in
Colombia now!!!
In the last years many companies have shown their
confidence in the country Sab Miller (South Africa):• Bavaria, (Beer)• Investment: US$ 8.000 Millions
Phillip Morris (USA):•Coltabaco, (Tobacco)• Investment: US$ 300 Millions
Telefónica (Spain): • Acquire Bellsouth Colombia (Cell Phone)• Investment: US$ 1.050 Millions
BBVA (Spain): • Acquire Granahorrar (bank)• Investment: US$ 424 Millions
Falabella (Chile):• Department store• Investment: US$ 100 Millions
Petrobras (Brasil):• Fuel, and oil• Investment: US$ 140 Millions
OPPORTUNITIES AND CHALLENGES OF THE U.K TO EXPORT TO THE U.S.A. FROM
COLOMBIA
847150: DIGITAL PROCESSING UNITS
IMPO U.S.A. 2005 (Millions US$) 6,920
IMPO EEUU - GROUTH ANNUAL AVERAGE 1999 TO 2005
10.9%
EXPO UK TO U.S.A. (Millions US$) 226
GROUTH ANNUAL AVERAGE 2000 TO 2005 -12.0%
PAID TAXES Mill US$ 0
EFFECTIVE TARIFF 0.0%
% AIR 99%
AIR FREIGHT US$/KG 2.48
% FREIGHT+ TARIFF OVER TOTAL COST 1%
COST CIF US$/KG 256.29
401120 NEW PNEUMATIC TIRES
IMPO U.S.A. 2005 (Millions US$) 2.651
GROWTH ANNUAL AVERAGE (IMPO U.S.A) 1999 TO 2005 5.2%
IMPO U.S.A. 2005 (Millions US$) 2.651
EXPO UK TO U.S.A (Millions US$) 130
GROWTH ANNUAL AVERAGE 1999 TO 2005 -2.5%PAID TAXES Mill US$ 5.2
EFFECTIVE TARIFF 4.0%
% MARITIME 89%
MARITIME FREIGHT US$/KG 0.21
% FREIGHT OVER TOTAL COST 7%
COST CIF US$/KG 2.80
691200 CERAMIC TABLEWARE, KITCHENWARE, OTHER HOUSEHOLD AND TOILET ARTICLES, OTHER THAN OF
PORCELAIN OR CHINA
IMPO U.S.A. 2005 (Millions US$) 868
IMPO EEUU - GROUTH ANNUAL AVERAGE 1999 TO 2005
3.3%
EXPO UK TO U.S.A. (Millions US$) 39
GROUTH ANNUAL AVERAGE 2000 TO 2005 -11.0%
PAID TAXES Mill US$ 5
EFFECTIVE TARIFF 12.5%
% MARITIME 72%
MARITIME FREIGHT US$/KG 28.0%
% FREIGHT+ TARIFF OVER TOTAL COST 15%
COST CIF US$/KG 596.0%
870899 PARTS AND ACCESSORIES FOR MOTOR VEHICLES
EXPO UK TO U.S.A (Millions US$) 256
GROWTH ANNUAL AVERAGE 1999 TO 2005 6%
PAID TAXES Mill US$ 5.3
EFFECTIVE TARIFF 2.5%
% MARITIME 50%
MARITIME FREIGHT US$/KG 0.34
% FREIGHT OVER TOTAL COST 4.3%COST CIF US$/KG
8
392690 ARTICLES OF PLASTICS
EXPO UK TO U.S.A (Millions US$) 146
GROWTH ANNUAL AVERAGE 1999 TO 2005 4.1%
PAID TAXES Mill US$ 5.5
EFFECTIVE TARIFF 5.0%
% MARITIME 47%
MARITIME FREIGHT US$/KG 0.6% FREIGHT OVER TOTAL COST
6%
COST CIF US$/KG 12.5
841229 HYDRAULIC POWER ENGINES AND MOTORS
EXPO UK TO U.S.A (Millions US$) 108
GROWTH ANNUAL AVERAGE 1999 TO 2005 25%
PAID TAXES Mill US$ 0
EFFECTIVE TARIFF 0%
% AERIAL 30%
AERIAL FREIGHT US$/KG 1.88
% FREIGHT OVER TOTAL COST 13%
COST CIF US$/KG 15
380820 FUNGICIDES
EXPO UK TO U.S.A (Millions US$) 103.2
GROWTH ANNUAL AVERAGE 1999 TO 2005 15%
PAID TAXES Mill US$ 6.7
EFFECTIVE TARIFF 6.5%
% AERIAL 71%
AERIAL FREIGHT US$/KG 2.6
% FREIGHT OVER TOTAL COST 13%
COST CIF US$/KG 34
711319 JEWELRY AND PARTS OF PRECIOUS METAL OTHER THAN SILVER
EXPO UK TO U.S.A (Millions US$) 41.2
GROWTH ANNUAL AVERAGE 1999 TO 2005 7%
PAID TAXES Mill US$ 2.3
EFFECTIVE TARIFF 5.5%
% AERIAL 69%
AERIAL FREIGHT US$/KG 18.7
COST CIF US$/KG 2.813
CONCLUSIONUNITED; COLOMBIA AND THE UNITED KINGDOM CAN CONQUER THE UNITED
STATES MARKET
CONTRIBUTIONS
• Technology
• Investment
• Experience
• Wages
• Energy
• Localization
• Cheap transportation
• FTA with the U.S.A
• “500 NEW INDUSTRIAL PRODUCTS WITH EXPORT POTENTIAL FROM COLOMBIA TO THE UNITED STATES”
• JOINT VENTURES
• MISSIONS
CONCLUSIONHOW??
WE ARE BEGINNING. IT IS TIME TO TAKE ADVANTAGE OF !!!!!
THANK YOU
www.araujoibarra.com
Martín Gustavo Ibarra Pardo