Chilean cherries had an outstanding participation in Asia Fruit Market Insight.

The Committee of Chilean Cherries from the Fruit Exporters Association of Chile AG, ASOEX, took a leading part in the 2014 version of “Asia Fruit Market Insight”, an initiative in which are held conferences, business meetings and fresh produce exhibitions from each participating delegation.

This year the event, organized by Asia Fruit, was held in the city of Hangzhou, China, and was attended by more than 150 delegations from more than 20 countries worldwide.

“The objective of the meeting was to serve as a platform to publicize the opportunities for growth in the business of fresh produce into the country, other than options concentrated in Shanghai and surroundings” explained from the Association of Fruit Exporters of Chile (ASOEX).

In this regard, Cristián Tagle, Chairman of Cherries from Chile Committee, stated “for us to participate in this event is interesting and strategic, because as an industry we are promoting the diversification of markets inside of China, and this is a way of visualizing business in that sense, but also because it allows us to show the quality and food safety of our cherries. ”

During his presentation on “Asia Fruit Market Insight” Cristián Tagle mentioned that the Committee on Cherries gathers 80% of total exports of Chilean cherries. While as this fruit supplier country, Chile, in 2013, came in second place after the United States, with exports of cherries 68,481 tonnes (Chile) behind 69,795 (USA) tonnes of cherries.

Tagle also said that Chilean cherry production has increased significantly during the last decade, since in 2007 there were 12,070 hectares planted, and in 2013 they reached the 18,372, with a potential production of 128,600 tonnes.

As for target markets, the chairman said that China is the main market for Chilean cherries, since in 2014, 26,679 tons of fruit were exported to this country, followed by Hong Kong with 19,937 (tonnes), USA ( 9,003 tonnes), Taiwan (3,733 tonnes) and Brazil with 2,553 tonnes.

Source: Emol

Chile leads ranking of most attractive emerging market for investment in retail

For the first time in thirteen years, the country leads the Index of Global Retail Development from consulting firm A.T. Kearney, which evaluates the 30 most attractive emerging markets for retail investment.

According to the study, years of economic and political stability have helped the country build one of the most sophisticated retail environments of Latin America Chile’s GDP grew 4.4 percent in 2013 and is expected to grow at roughly that rate through 2016. Its investment in infrastructure and friendly regulatory framework within the industry suggest that growth in this category will continue in the future. After steadily rising in the ranking for several years, Chile is the top-ranked country for the first time.

The report explained that the industry sales totaled U.S. $ 98,520 million in 2013 and is expected to increase 13% in the next four years. In addition, per capita purchases in groceries represent only 28% of retail sales, reflecting the growing Chilean appetite for nonessential products and aspirational purchases.

Another point emphasized by A. T. Kearney is that the nation has one of the most developed e-commerce markets in the world. Seven out of ten citizens who use the Internet made ​​between two and six online transactions last year, with an average household spending per of US$ 158 online.

Chilean consumers are not the only ones who stand out. Local retail firms were also mentioned by continuous investment in organic growth in the region. The company highlighted Falabella plans to spend U.S. $ 3,510 million in the region bt 2015, with 215 new stores and 16 shopping centers.

New store formats, particularly outside of Santiago, are also opening up new opportunities. Low-budget stores, small boutiques, and corner stores are growing in suburban areas that are expanding rapidly, places where speed and convenience are crucial.

Consulting experts stated that Latin America continues to maintain its position in the index, with three countries in the top-five (Uruguay and Brazil) , as a growing middle class offers lucrative opportunities.

Peru stands out reaching number thirteen in the list for its strong macroeconomic data. Private label products have increased in popularity due to their high quality and affordable prices. Gap, Pili Carrera and Lippi are among the companies that have decided to settle in Lima. Starbucks also is using the country for its growth strategy in South America with plans to open more than 100 stores by 2015.

Meanwhile, El Corte Ingles and Walmart are among the international retailers who plan to arrive to the capital and other Peruvian cities next year.

It is expected that most modern formats to grow 67% to U.S. $ 22,330 million in sales in 2017. Cencosud, which purchased the Colombian business of Carrefour in 2012, has invested U.S. $ 20 million to improve the infrastructure of the chain Jumbo.

Parque Arauco was associated with Bancolombia to develop Hill Park in Bogota, and Mall Plaza to raise new centers in Manizales, Pereira and Bucaramanga.

A.T. Kearney

Diario Financiero
Revista Capital

Stanford chooses Chile to teach education program on innovation and entrepreneurship.

In August, the Graduate School of Business at Stanford University, one of the most well-known worldwide, will land in our country, to issue for the first time in Latin America Stanford Ignite program, focused on developing innovation and entrepreneurship .

The initiative is aimed at professionals who want to contribute with a thought of innovation and entrepreneurship to their current job and those looking to start their own business. A maximum of 50 people will be chosen for this program that will be held from August 8 to October 26, 2014 at the offices of Microsoft Chile.

Stanford chose Chile as the third country, after France and India to implement the Ignite program, for being one of the strongest centers of entrepreneurship in the region. The idea was looking for particular sites where Stanford thinks entrepreneurship is just becoming one of the important drivers of the economy.

“We are really impressed and inspired by the tremendous innovation activity in Chile. This country is a perfect example of joint work in the public sector, the private sector and universities to encourage entrepreneurship, so it seems a very good place to start to expand in the region, ” said Assistant Dean and Director for Global Innovation Programs at Stanford, Bethany Coates.

Chile has an amazing ecosystem for innovation, investors, public policies, but there is a gap between investing in innovation in creation of successful companies. That is exactly the reason why the program wants to be in this country. Chile although being a small country, has a lot of potential.

Applicants to the program must be professionals who have at least a bachelor’s degree or who are doing a graduate program, but other than business administration (MBA) or some expertise in that area, because what is sought is to have a very diverse student body and to provide different perspectives. The target are very talented people at what they do and that have a potential impact. They can be people dedicated to research, as people who want to create a company.

The goal is to help participants to define, formulate and develop their views and then turn their ideas and innovations into a viable business plan.

The Stanford Ignite program will also be available in Beijing, China starting fall 2014.

Diario Financiero

Pharmaceutical Market in Chile

All foreigners in Chile are amazed by the offer of Drugstore and Pharmacies in Chile. Some people even say that there is almost a 2 blocks walking distance within one and another. Pharmaceutical Industry has undoubtedly become one of the strongest in Chile nowadays.

In Chile there are 2,659 pharmacies, of which about 60% belong to the three major pharmacy chains (Salcobrand, Cruz Verde and Farmacias Ahumada) that concentrate around 95% of the value of sale of medicines.

During 2012 the three major pharmacy chains in the country had incomes on US$1,502 millions with an annual growth of 8.0% compared to 2011. In the last five years, sales grew by 34.1% from US$1,059 million in 2008 to US$1,502 million in 2012.
Regarding the condition of sale of the products, the revenue of prescribed drugs was US$1,152 millions in 2012, while revenue in Over-the-counter (OTC) drugs was US$ 349 millions.

These figures only consider the sale of drugs and not consider the sale of other products such as personal hygiene items toiletries and cosmetics among others.
The condition for selling a drug is defined by the Public Health Institute (Instituto de Salud Pública/ISP) based on their rules and regulations. The products are separated into two groups: OTC drugs and prescribed medicine. The ISP records the existence of 15,411 products classified as medicines, including the same drug in different presentations and concentrations. Of this registry, 2,431 products are OTC drugs, which corresponds to 15.8% of the total; and 12,980 drugs have a condition of sale under prescription, corresponding to 84.2% of the total.

Regarding market share in sales revenue in 2012, the OTC drugs accounted for 23.3%, while the prescription drugs correspond to 76.7% of revenues.

This shows the importance of prescription drugs for pharmaceutical chains, representing more than three quarters of its income. Moreover, the price of prescription drugs is higher than in OTC drugs. The average price of the first reached US$7 per unit and the second was US$4 in 2012. Concerning units sold between 2008 and 2012 there was a slight increase in share of OTC drugs from 35.5% to 36.9%.

Regarding overall evolution of the market for drugs is observed growth around 34.1% in the last five years. Also, the price of drugs in the past five years has risen an average of 23.1%; that is, 26.2% up in prescription drugs and 17.3% in OTC drugs. However, in the last two years we have seen a strongest rise in OTC drugs.

The volume of units sold has presented an upward trend, 9.0% increase in drugs units sold between 2008 and 2012. This increase is mainly explained by an increase of 13.3% in OTC drugs, while prescription drugs grew 6.6%. However, in 2012 we have seen a growth in sales of prescription drugs, which doubled the growth of sales in OTC medicines.

Medicines registered in Chile are divided into 266 therapeutic classes. The therapeutic class that generate higher revenues to the three major pharmacy chains is the female hormone contraceptive with 6.4% of sales for the year 2012. Then non-narcotic analgesic with 3.9%, an antirheumatic 3.8%, antidepressants with 3.4% and dermatological products with 3.1%. these products are relatively common use, but the dermatological products are only sold directly and concentrated 11.7% of such sales.

Other products sold without prescription and represent a percentage significant sales pharmacies OTC drugs are emollients and sun blockers with 11.6%, non-narcotic analgesics with 9.8% and 5.1% Anti-flu medicines.

With all this background, spending on medicines in the country will continue to increase as economic development increases. Today Chile has a per capita expenditure of US$ 82, while in Europe spending reaches US$261 per capita and United States U.S. US$ 1,042 per capita.

Foreign manufacturers such as Indian drugmaker Bal Pharma have a presence in the country. Total imports for 2008 reached $616 million, of which the USA had 13% of the market share, followed by Germany with 9%, France 8%, and China and Brazil both with 7% each. Regarding to the country’s attractiveness to innovative drug companies, Chile stands above Argentina and Peru and below Mexico and Brazil.

By 2014, the report forecasts the Chilean pharmaceutical market could be worth US$1.96 billion, increasing at a compound annual growth rate of 11.31% in US dollars. By 2019, the sale of prescription and OTC drugs will have reached a value of 1,165.35 billion pesos, increasing at a compound annual growth rate of 8.14% in US dollars.

Ministry of Economy, Development and Tourism
Ministerio de Economía, Fomento y Turismo
The Pharma Letter,

Financial wealth of Chilean households grew 6.5% in 2013

The Chilean economic growth in recent years resulting in a steady increase in private financial wealth. Last year was no exception, according to Boston Consulting Group (BCG), financial wealth grew 6.5% in the country.

According to the Global Wealth 2014, the latest version of the annual report of BCG on private financial wealth, Chile reached just over U.S.$ 342 Billion, divided into 4.65 million households. Of these, 4.2 million have assets for less than U.S.$ 100.000

The segment of less than $ 100,000 accounted for 54% of total wealth in Chile in 2013, by far exceeding 8% average in Latin America. That is mainly due to the relevance of pension funds in Chile.It is also important the segment of over U.S. $ 100 million that is represented in Chile by 65 households with 18% of total wealth in comparison with an average participation of 13% in Latin America.

The growth of wealth in Chile occurred in a context of global expansion of financial wealth. The study revealed that private financial wealth increased 14.6% to U.S.$ 152 billions last year, more than the 2012 breakthrough, when the increase was 8.7% reaching U.S.$ 132.7 trillion. The number of millionaire households, ie, liquids with investable assets of at least $ 1 million, reached 16.3 millions, a significant jump from 13.7 million in 2012.

BCG notes that in most countries the growth in private wealth is due to the strong upturn in equity markets that started in the second half of 2012, encouraged by a relatively stable economy in Europe and the United States.

North America and Western Europe continued as the richest regions in the world, with assets of U.S.$ 50.3 billion and U.S.$ 37.9 billion, respectively, while Asia Pacific (excluding Japan) is following closely with $ 37 billion . BCG noted that Asia Pacific had 50% less wealth than the United States in 2008, gap that has been reduced in half.

The document indicates that the growth of wealth was primarily driven by returns on existing assets, rather than creation of new wealth. The situation is very different in Latin America where the poor performance of the stock markets decreased the income of existing assets and gave prominence to the new wealth created by the growth of the economy. Wealth in the region grew 11.1% to U.S$ 3.9 billion, with rates below average in the major economies like Mexico (10.7%) and Brazil (5.6%)

For the next five years, BCG forecasts that private wealth will have an compound annual growth rate of 5.4%, to reach about U.S.$ 198.2 billion by the end of 2018.



Studies show Angelini, Solari and Luksic groups as leaders in wealth ranking

The Ranking on Wealthiest Economic Groups prepared by the Centre for Economics and Business Studies of Universidad del Desarrollo, positioned to Angelini, Solari and Luksic group at the top during the fourth quarter of 2013.

Angelini group consolidated its leadership and remained in first place in the ranking, thanks to an upturn in revenue to compensate a decline in stock market capitalization. The group consists of the parent companies Antarchile, Eperva, Copec and Siemel, and its operations include the sectors of natural resource extraction, transportation, fuel and finance among others.

Meanwhile, Solari group recorded significant progress in the ranking and climbed four places to reach second. This was the result of an improvement of two places in the ranking subcategory, and three places in growth subcategory. Its important to point out that the group maintained first place in the ranking in Stock Market Capitalization subcategory.

Also, Cueto Group rose five places reaching the fourth place. This development was mainly due to a strong increase in growth of their income in twelve months (45%) and assets (20%). The group has stake in Costa Verde Aeronautics and Latam Airlines. In the latter, its non-current assets and total assets increased significantly in comparison to 2012.

The greatest advance in the ranking is obtained by Urenda group (mainly shipping and ports), which climbed nine places to reach number 23. The group presented a significant increase in their income and assets over the past year as a result of a major expansion of operations and increase investment in infrastructure and buildings.

On the other hand, the biggest drop was Saieh group, that decreased eleven places to stay in position 19. This result in a significant decline in the growth of income and assets, triggered by the crisis in which was immersed the group during 2013. For example, the company SMU had an operating loss of $ 531,241 million in December and a significant decrease in non-current assets.

The Ranking analyzes quarterly the 32 most important Chilean business groups and is constituted from a simple average of the position of each group into three subcategories: market capitalization, consolidated revenue and consolidated assets.


Mining continuously growing in Chile.

The country has 28% of global copper reserves and it is the world’s principal producer of copper (34%), nitrates (100%), iodine (58%) and lithium (45%) and the sixth largest silver producer. It also accounts for about 2% of the world’s mine production of gold. Chile holds the fifth place in Current Mineral Potential Index.

Copper is undoubtedly the star in Chile’s mining. CODELCO, state-owned company, is the world’s single largest copper producing company; even though, foreign private investment has developed several new mines and the private sector now produces round the same amount of copper than CODELCO. Private mining now represents 72% of the country’s production. Foreign mining companies now in Chile include Australian giants BHP Billiton and Rio Tinto, and UK-linked Anglo-American and Xstrata.

Chile has one of the fastest-growing economies not only in Latin America but also in the world and mining accounted for 8.5% of the GDP and 47% of exports.

Main customers when in comes to Chile’s copper export are Asia and Western Europe. Emerging nations like China has experienced a growth in demand for mining products as well.

Mining is growing in size as new mines open to exploitation and extensions of existing mines are planned. The Chilean government strongly supports foreign investment in the mining sector and has modified its mining industry laws and regulations to create a favorable investing environment for foreigners. Mining companies plan to invest US$104 billion in Chile over the next eight years. Chile’s Foreign Investment Committee expects that future mining projects in the country will generate US$18.5 billion annualy in investment by 2015.

Public Tender Process: Drones for Chilean Police.

The use of drones for surveillance purposes in Chile could become real before the end of this year.

The General Director of the Police Force, Gustavo González Jure, stated the bidding process for the institution to acquire drones will be reactivated within the next months after the previous purchase process was not awarded, in March this year.

This last bidding process was for the purchase of two drones quadcopters to support the Special Operations Group from the Police Force. For now the institution is making a thorough study of the use of this type of elements and preparing to restart the buying process.

General Gonzalez explained that the use of these devices ” will complement the operations to really know what happens in certain occasions and we can use as evidence” .

The highest authority of police force mentioned that, drones will be used to facilitate official work , “as an element that allows us to assign certain personnel in different places , in order to prevent damage to public or private property, and prevent injury to individuals or our staff . It would be best for planning our services. ”

The Police Force is not yet using drones. The institution has only used the devices during a trial run regarding a mass activity at O’Higgins Park in Santiago, but they did not do a real assessment.

Record Investment in Chile for 2014.

A record investment in Chile for the coming years is projected . According to the register of projects as of January 2014, the initiatives scheduled in the country for the year have reached US$ 223.505 million. Mining sector is leading with ongoing initiatives of US$ 105.442 million , representing 47 % of the total. It is closely followed by Energy that reaches almost 29% , with an investment of US$ 64,212 million.

The implementation dates will depend mostly on the policy that encourages the new government of Michelle Bachelet on investment. In general there is a lot of optimism and positive expectations about the future of Chile as a magnet for investment in our region , and starting the second semester, the activity should recover the dynamism that has continued in recent years

The infrastructure sector has also had a great growth and accounts for 14% of the investment committed between 2014 and 2020 with over 500 projects. The greatest investments have been made by the government and the Ministry of Public Works and for Metro S.A., the state company that operates the Metro de Santiago transportation services.

The most important initiatives in infrastructure are the Corredor Bioceánico Aconcagua, for US$3,000 million; the Vespucio Este and Costanera Central highways, for $ 2,000 million each. They are followed by lines 3 and 6 of the Metro,with investments for US$ 1,722 million and US$1,036 million , respectively , among others.

Hotel Investment Booming in Chile.

Hotel investments are beginning to multiply in Chile. Profitability of the sector was around 15% in 2013, which is a great jump from the 10% from three years ago and demand will continue to rise on about five points according to some investors.

Returns began to rise starting in 2010 because of the boom of the economy. Between that year and 2012 about two thousand rooms were added to all domestic supply, mainly because of a steady increase in foreign visitors and also because Chileans travelled within the country more frequently and increased their expenditure on related tourist services.

Particularly Argentineans and Brazilians enjoying visiting Chile. Even though Argentineans increased their arrivals to Chile by 20% in 2012, they don’t often spend much in related costs. They usually prefer to rent apartments or stay in small independent hotels. Meanwhile, Brazilians increased their arrivals by only 3%, but their expenditure increased by 47%. Tourists from Brazil usually stay in well-known chained hotels.

With over 3.5 million foreign visitors last year, investors of the sector are now looking at Chile since this trend will continue. Average occupancy reaches 75% on average in Santiago only rate that increases in summer with around 90% in most of the big hotel chains.

Adjustment in rates have also proven that this sector is a good investment in Chile. With an average price per room located at around $ 100, the Chilean capital was way below other South American cities and had one of the cheapest hotel prices, which of course to the detriment of the margins of operators. For this year, the average price is $ 220 and it could maybe even reach $ 300 per night.

Investment is growing in the north and south part of the country at a much lower rate than in Santiago where projected investments are for about $ 800 million in both urban and only vacational rental. Around 58% of the tourist-related building projects scheduled for construction will be in Valparaíso where there will be an increase of 13% in capacity with 716 new rooms and also in Santiago with a 21% increase, that is, 1,800 rooms.

Some projects are schedules for the rest of the country as well. It is intended to add 470 new rooms in the Bio Bio region and in Aysén, two projects are expected to add 125 new rooms, increasing in a 36% the offer of rooms in the region.

It is predicted the arrival of Fairmont, Banyan Tree, Rosewood and Mandarin chains, among others, that cover the entire spectrum, ranging from economic, executive to luxury. It is also predicted that Jumeirah, the operator of Burj Al Arab, the most luxurious hotel of the world, has been prospecting the local market.

The hotel business ensures stable though not fast returns. They provide a relatively steady cash flow and the possibility of having an asset with a high real estate value that will be a generator of income in the long term.