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Identifying target sub-sectors, and how to select and approach potential investors:

Identifying target sub-sectors, and how to select and approach potential investors: the case of Peru. ‘Investment Promotion’ Short courses for permanent missions in Geneva Palais des Nations, 9 June 2009. Phase 1: Broad Sector Screen. Peru’s Investment Policy Review

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Identifying target sub-sectors, and how to select and approach potential investors:

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  1. Identifying target sub-sectors, and how to select and approach potential investors: the case of Peru ‘Investment Promotion’ Short courses for permanent missions in Geneva Palais des Nations, 9 June 2009

  2. Phase 1: Broad Sector Screen • Peru’s Investment Policy Review • Study on FDI promotion at the regional level in Peru • Training workshops with outputs such as work plans, including national and international networking • Export and competitiveness studies carried out by different public and private organizations

  3. Phase 2: Narrow Sector Screen • Identified non-traditional agricultural exports. Given the success of the Asparagus, other similar products were identified: Paprika, Artichoke, Piquillo Pepper, Mango, Citrus fruits, Avocado • Selected 3 products to start with: Paprika, Artichoke and Piquillo Pepper (food processing- more value added)

  4. Phase 2: Narrow Sector Screen, cont. • Evaluated the national strengths & competitors • Competitive production costs • Identify main export market: USA and Europe • Identify main competing exporters: Spain, Brazil, Iran and China • Detailed market & corporate (TNCs) based assessment • Aim is to find un-served market opportunities and TNCs looking for markets to serve Do a few sectors well…… then do some more!

  5. Phase 3: Broad Company/Nation Screen • Screened the 3 products against other probable country competitors • Reviewed TNCs in priority products in those host nations • Determined that Spain was a major target country • Identified an international food fair in which to participate: Alimentaria Barcelona 2006 • Hire a Spanish expert to select 30-40 companies and to prepare their visit during the fair

  6. Phase 4: Confirmation of Targeting Priorities • IPA and Government committed to: • 3 products • Spain as FDI source • 20-30 prime candidate TNCs/investors • Prepare the promotional material: brochures, video, ppts, investment guide, etc • Inter-institutional cooperation: Ministry of Economy, Proinversión, PromPerú, Andean Community Secretariat, local consulting firms, local private sector

  7. Phase 5: Developing the Project Position • Prepare specific information on each product • Product X to serve market Y: i.e. Peruvian products competitiveness to serve USA and European markets • Researched and produced project concepts for target companies: Paprika, Brine Artichoke and Piquillo Pepper

  8. Phase 6: Reconfirmation of Target TNCs • Government, IPA and UNCTAD reviewed projects and targets • Continuous review of target TNCs with the help of an international expert – e.g. visit their Websites • Confirmed primary TNC targeting list (20-30 provided by international expert previous to the int’l fair)

  9. Summary of Key Points • Broad Sector Screen……………………. 6 priority products • Narrow Sector Screen…………………… 3 target products • Broad Company/Nation Screen…….…. 20-30 target TNCs • Confirmation of targeting priorities • Develop the project proposition & prospectus • Reconfirmation of targets TNCs………

  10. Phase 7: Corporate Appraisal & Screening Phase 8: Identification of Key Executives

  11. Phase 9: Corporate Contact/Negotiations • Organized presence in the Feria Alimentaria Barcelona, 2006 • Prepared staff and material: first impressions count! Shared stand with PromPeru, exhibit together with Peruvian companies, show the video, etc. • Focused on learning more about the TNC, its plans & perceptions of Peru • Diplomatically introduced possible project opportunity: no hard sell • Listened carefully to the TNC’s reaction & adjust project accordingly • Followed-up meetings very closely

  12. Peru in Feria Alimentaria Barcelona

  13. PRELIMINARY RESULTS • 5 Companies announced investments interest equivalent to $10 million • 14 June 2007, one company started a $1.5 million operation to produce brine artichoke for the USA and Spanish markets • Local partner • 180 jobs per 8 hour shift • 200 day labourers per season (indirect jobs) • Approx. 300 rural farmer families directly benefited (crops) • The investment promotion agency ProInversión continues close follow up and assistance to potential investors

  14. PRELIMINARY RESULTS • Investor Targeting works but it is not magic • Inter-institutional cooperation is fundamental • Time and good research skills, too • Experts from the target country are instrumental • Diplomats can also be instrumental, in particular if posted in target countries

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