Martín Gustavo Ibarra President ARAUJO IBARRA & ASOCIADOS S.A Colombia: Commercial platform for the English exports towards the United States

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


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


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


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)


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


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

http://images.google.com/imgres?imgurl=http://www.servihoo.com/channels/kinews/images_news/AFP/SGE.MVT79.180705152009.photo00.quicklook.default-245x195.jpg&imgrefurl=http://www.servihoo.com/channels/kinews/afp_details.php%3Fid%3D93166%26CategoryID%3D47&h=195&w=245&sz=13&tbnid=ntpGbwmC35YJ:&tbnh=83&tbnw=105&hl=en&start=1&prev=/images%3Fq%3DSab%2BMiller%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DN

http://www.interseg.net/images/logo_bbva.jpg

http://uts.cc.utexas.edu/~cefe/res/Pics/petrobras.jpg

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


% MARITIME 89%

MARITIME FREIGHT US$/KG 0.21

% FREIGHT OVER TOTAL COST 7%


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%



% 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


GROWTH ANNUAL AVERAGE 1999 TO 2005 6%

PAID TAXES Mill US$ 5.3


% MARITIME 50%

MARITIME FREIGHT US$/KG 0.34

% FREIGHT OVER TOTAL COST 4.3%COST CIF US$/KG

8

392690 ARTICLES OF PLASTICS


GROWTH ANNUAL AVERAGE 1999 TO 2005 4.1%



% MARITIME 47%

MARITIME FREIGHT US$/KG 0.6% FREIGHT OVER TOTAL COST

6%


841229 HYDRAULIC POWER ENGINES AND MOTORS




EFFECTIVE TARIFF 0%

% AERIAL 30%

AERIAL FREIGHT US$/KG 1.88


COST CIF US$/KG 15

380820 FUNGICIDES

EXPO UK TO U.S.A (Millions US$) 103.2




% AERIAL 71%



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




% AERIAL 69%



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

[email protected]

www.araujoibarra.com

Martín Gustavo Ibarra Pardo

mailto:[email protected]

Documents

Martín Gustavo Ibarra President ARAUJO IBARRA & ASOCIADOS S.A Colombia: Commercial platform for the English exports towards the United States