Chile Ambassador Mika-Markus Leinonen Trade Commissioner Maria Ala-Kaila, Finpro

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1 Chile Ambassador Mika-Markus Leinonen Trade Commissioner Maria Ala-Kaila, Finpro

2 1. PROFILE 2. KEY INDICATORS OF ECONOMY 3. CHILE AND FINLAND 4. BUSINESS ENVIRONMENT, LANGUAGE AND LABOUR FORCE 5. BUSINESS CULTURE AND ORGANIZATION STRUCTURES 6. THE NORDIC COUNTRY OF LATIN AMERICA 7. TELECOM OVERVIEW 8. BIOGAS 9. WATER SECTOR IN CHILE 10. CHILE THE MINING SUPER POWER CHILE 29/08/2017 2

3 Pioneer of free trade 22 trade accords with 60 countries Member of OECD since 2010 Produces over 30% of the copper in the world Transparency Int l list on corruption: rank 24 (2016) World Bank Doing Business Index: rank 57 (2017) Global Innovation Index: rank 46 (2017) 29/08/2017 3

4 CHILE KEY INDICATORS OF ECONOMY Population of 18,0 millions Gross national product per person USD (2017) GNP increment prognosis 2018: 2,8% Population of 18,0 millions Gross national product per person USD (2017) GNP increment prognosis 2018: 2,8% 29/08/2017 4

5 CHILE Agreement on investment protection (1993) CHILE FINLANDCHILE FINLAND FINLAND An agreement preventing double taxation is under negotiation 20 Finnish companies in Chile, 80 companies have a representative Finland s 3. most important partner of trade in Latin America Finland s export consists mainly of machines and equipment of mining and forest industries Next steps: CleanTech, energy, innovation, education Team Finland in Chile: The Embassy, FINPRO, Finnish Cultural Institute in Madrid and 4 honorary consuls 29/08/2017 5

6 CHILE BUSINESS ENVIRONMENT, LANGUAGE AND LABOUR FORCE Representatives of Finnish companies experience Chilean business environment as clear and easy According to researches Chile is the most business friendly country in Latin America One can t always get by with English Finnish companies have had challenges finding skilled labour force Big differencies in skills of labour force 29/08/2017 6

7 CHILE BUSINESS CULTURE AND ORGANIZATION STRUCTURES Chilean business culture is closest to Finnish in Latin America Hierarchy seems to be higher than in Finland in Chilean organizations Decision making takes place considerably higher compared to Finland Chileans prefer written contracts, verbal agreements have less importance Creating relations and networks plays a higher role in Chile than in Finland Biggest difference is on concept of time 29/08/2017 7

8 CHILE THE NORDIC COUNTRY OF LATIN AMERICA" Politically stable Consistent economic policy Friendly to business Social interaction / keeping in contact is key Stepping stone to markets in Latin America 29/08/2017 8

9 Telecom overview Chile has a stellar business environment comparable to that of many developed countries. In 2015 the entirety of the Chilean information technology services sector was USD 2 billion. 67 % of the households have access to the Internet with 70 % of the population calculated as users of Internet. However there are over 24 million mobile phones in Chile. Chileans are some of the most active users of social media in the world. As an example 75 % of the mobile users use the instant messaging service WhatsApp whereas the global average is 40 %. Telecommunications is an industry growing at an impressing rate (Q3 7,3 %) in Chile and is becoming one of the most investing industries. 29/08/2017 9

10 Challenges in the market Economical High investments needed to match technological requirements Resources may have to be shared among several actors as research and academy will not have enough money to sustain by themselves the required infrastructural development Technological High speed network proving high bandwidth and low latency High performance computing Massive data resources Organizational Inclusiveness and capillarity to access shared resources 29/08/

11 Chile s development interests: Public Safety Network Fibra Optica Austral bidding -> Connecting Chilean Patagonia region with rest of the country Submarine cable Chile China Cyber Security Datacenters 29/08/

12 Biogas Biogas market is a greenfield market, with huge growth opportunities Few plants are in operation with poor performance. Customers wants solutions to eradicate the smell and reduce cost generating gas from the waste and producing electrical energy. 29/08/

13 Market Size Biogas to Energy Total Organic Waste Available 17,200 KTon/year produced by Agro, Fish and Food Industries (excluded Landfills and Restaurants). Organic Waste anaerobic digestion produced Biogas, a natural resource to supply either, thermal energy, Electrical energy or Diesel (ULSD). Electric Power equivalent 1,050 Mwe Total Investment estimate 3,500 KUSD/Mwe Target Market ( ) 150 Mwe Target Market Investment estimate 525 MUSD( ) 29/08/

14 Water Sector in Chile Chile has some of the largest water reserves in the southern zone. It counts with 200 nautical miles, 101 watersheds, rivers, almost lakes and lagoons and approx glaciers. When considering the entire Chilean territory, the volume of water coming from the precipitation is m3 per person per year, surpassing 8 times the world average and 25 times the minimum that is required for the sustainable development. However, water is distributed very irregularly in the territory, due to the diversity of climate and geography. - The North of the country is extremely dry, with less than 500 m3 / inhabitant / year - In the South the water is very abundant, surpassing m3 / inhabitant / year 90% of the water in Chile is, until this day, privately owned due to the privatization that started in /08/

15 Challenges of access and water quality in the country The North: contamination of water with waste from the mining industry harms rural and indigenous communities and the population living in the region The Center-South: intensive use of water for industrial agriculture and the contamination of river basins by mining and forestall companies In the South: concentration of water ownership in large energy-generating companies for the installation of hydroelectric mega-centrals Throughout the country: conflicts with health companies, due to the high costs of drinking water and poor treatment of wastewater All these situations have a common origin: the concentration of water ownership in Chile, supported by the institutional framework and the current regulations. 29/08/

16 Chile The Mining Super Power Chile is currently one of the main mining powers in the world, having big reserves of copper, lithium, iodine, gold, silver, molybdenum, and natural nitrates among other metallic and nonmetallic minerals throughout its territory. Thanks to a large amount of copper resources (28% of the world s copper reserves), progressive legislation and a healthy investment environment, Chile has become the copper mining capital of the world, producing over 1/3 of the global copper output. The total production of copper 5,433 KTMF, representing 31.8% of the world total in The impact of mining on the Chilean economy is significant. 13.0% of national GDP, and 59.7% of total exports from Chile, providing 14% of national income. Mining investment in Chile is expected to reach US$112 billion by 2025, of which, $86.7 billion will be spent on copper mining, $21.7 billion on gold and silver mining, and $3.6 billion on iron and industrial minerals mining. 29/08/

17 High Demand in Mining; a channel for Finnish Technologies Offering Equipment and technologies on demand Equipment that requires regular replacement: Cranes and screening machines, Crushers, Grinders, Off-road trucks ( tons), Cabbed trucks chassis (+50 tons), parts for rock cutters, 360-degree revolving excavators Environmental system solutions, Water treatment, Water desalination, Air pollution abatement, Mine closure, Carbon footprint reduction, Cleantech Underground mining technology services, Wear-resistant materials 29/08/

18 More info: Mika-Markus Leinonen Maria Ala-Kaila 29/08/

19 Chile - Business Opportunities Team Finland roadshow, August 2017 Mika-Markus Leinonen, Ambassador Maria Ala-Kaila, Trade Commissioner