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While U.S.-Peru relations havebeen good for decades, for thepast 10 years they have been ex-ceptionally strong. And sinceAlan Garcia Perez was electedpresident in 2006, relations haveimproved even more as Peruconsolidates its political stabil-ity and works towards greater

socio-economic development.Last year, Secretary of State

Clinton pronounced that thetwo countries were enjoyingexcellent bilateral relations, andthat this situation is lending it-self to new projects. During herfirst trip to Peru this June, Mrs.Clinton said: “The United Statesapplauds the progress in Perutoward economic inclusion, thereduction of poverty, andgreater opportunity for the Pe-ruvian people.”

Jose Antonio Garcia Belaun-de, Minister of Foreign Affairs,is seeking to strengthen rela-tions with neighboring coun-tries, as well, as these not onlybring about peace and trust, butalso security for investments.

“The added value of good rela-tions is investment. Obviouslyif an investor feels that a coun-try could enter into conflict withits neighbor, he’ll be discour-aged,” the Minister says. “How-ever, Peru’s not making friendssimply to be attractive to for-eign investors. Rather, friendlyrelations are good for everyonebecause in this way we can ded-icate more money to health andeducation instead of arms.”

Peru is an original memberof the Organization of Amer-ican States (OAS) – the world’soldest regional organizationand promoter of collaboration,solidarity and peace – andplayed host to this year’s OASgeneral assembly in June.

Consistency and co-herency possiblybest describe the Peruvian govern-ment’s economic

policies over the past 15 years.By opening up to the world, introducing investment-friend-ly and fiscally-sound reforms,promoting its quality exports,and investing in infrastructuredevelopment, Peru has achievedthe economic growth it had pre-viously only dreamed of. Goneare the years of instability and domestic terrorism, and wel-come are many years to come ofsteadily paced socioeconomicdevelopment.

President Alan Garcia Perez,elected to office in June 2006, re-marks, “Peru represents a suc-cessful model in Latin Americathat stands out not only for its results, but also for being a bench-mark of modern democracy.”

Perhaps nothing highlights Pe-ru’s efforts as much as the sign-ing of free-trade agreements inrecent years. In March 2010, apact was signed with the EU, anda new agreement with the U.S.just came into effect in February.The treaties are boosting exports,attracting FDI, and spurring newbusiness development.

Peru has also signed tradeagreements with China, Cana-da, Korea, and Singapore, amongothers. The pacts are vital to ex-panding the markets where Pe-ruvian businesses can sell theirgoods, yet no market is more im-portant for Peru than the U.S.

“The U.S. is our most impor-tant trade partner,” said PrimeMinister Javier Velasquez. “TheFTAs are an important tool thatallow us to compete and to gainentry to markets such as the 300million consumers in America.”

Revenues from increasedtrade are being put to good useat home. For example, funding

for rural areas has been one ofthe pillars of Peru’s increasinglyprogressive social developmentand solid economic base, as wellas a smart diversification strat-egy. Moreover, greater empha-sis on education has had a greatimpact on Peruvians, while hugeimprovements in logistics infra-structure are helping grow theeconomy more smoothly. In-deed, the Port of Callao is one ofthe largest ports in South Amer-ica, and the Jorge Chavez Airportwas ranked the continent’s bestin 2005, 2009, and 2010.

Peru is fortunate in that it doesnot depend entirely on others forits economic wellbeing. Thecountry’s abundant and diversenatural resources are a greatsource of wealth, and also pro-vide many opportunities forgrowth in the future, says Pres-ident Garcia.

“Peru will be the third-biggestmining country in the world inshort term,” he affirms. “Peruhas the world’s richest fishingsea because of the cold currentrunning through the oceannearby. Peru has a huge amount

of hydropower potential fromrivers that flow from the Andesto the Amazon plain and Peruhas resources such as gas thathave just begun to be explored.”

Local businesses are activelyand successfully increasing therange of products they export,to textiles, machinery and moreprocessed foods, a process thatis also spurring new job creation.

U.S. Ambassador to PeruMichael McKinley praised Pe-ru’s success in promoting eco-nomic growth and povertyreduction last July, noting that

the country will have one of thefastest expanding economiesthis year. That growth, alongwith the institutional and macro-economic stability that the gov-ernment has provided, will makesure the country’s success con-tinues, said the Prime Minister.

“Peru is leading economicgrowth in Latin America, andhas been for many months,” Mr.Velasquez said. “Our economyhas grown continuously for thepast 90 months and it will con-tinue to do so. That’s the bestguarantee for any investment.”

PERULatin America’s fastest

growing economy This supplement to USA TODAY was produced by United World Ltd.: 388 Second Avenue - Suite 131 - New York - NY 10010 - Tel: 212 286 8117 - Fax: 212 286 1984 - Email: [email protected]

‘WE ARE INTERESTEDIN INVESTMENTTHAT CREATES JOBS ANDINTERNATIONALINVESTMENT ININFRASTRUCTURE.PERU IS A RICHCOUNTRY WITHENORMOUSPOTENTIAL’

ALAN GARCIA PEREZ,President of Peru

Our World

President Barack Obama held an official meeting with Peruvian President Alan Garcia on May 31 at the White House. They discussed cooperation, democracy, and their countries’ bilateral free trade deal

INTERNATIONAL RELATIONS

Making and keepingfriends, key to developmentPeru’s Ministry of Foreign Affairs knows that good relations mean good business

For countries such as Peru, witha relatively small domestic market, exports are a vitally im-portant contributor to eco-nomic growth. Fortunately,Peru has been blessed with awealth of sought-after miner-al deposits and agriculturalproducts that are contributinggreatly to the growth of thecountry’s exports.

The government has alsobeen very active in negotiatingfree trade agreements, whichhave opened up new marketsabroad for the country’s busi-nesses. The most recent pactwas signed earlier this year withthe European Union, and talksare being held with more coun-tries even now, says Jose Anto-

nio Garcia Belaunde, Peru’s For-eign Affairs Minister.

“Peru is very lucky in that wehave a foreign trade sector thatis very diversified,” he says. “Bythe end of the current admin-istration in 2011, I expect tohave about 80% of our foreigntrade covered by trade agree-ments. They have the advan-tages of being free trade pacts,which encourage investment,and they have a less tangibleadvantage which is that theysend the message to investorsthat Peru is a stable country.”

These agreements have beena huge help for Peruvian com-panies, especially for small- andmedium-sized enterprises(SMEs), which together are the

country’s biggest employers andcreators of new jobs, accord-ing to Martin Perez Mon-teverde, Minister for ForeignTrade and Tourism.

“Free trade pacts are impor-tant because they help SMEsexport,” he says. “This type ofcompany employs 80% of theworkforce, so by helping themexport we’re giving workersmore opportunities.”

The government has takenvarious steps to organize andpromote Peruvian exports.PromPeru, for example, worksin several different areas, pro-viding information and aid tocompanies around the coun-

FOREIGN COMMERCE

Moving Peru’s assortmentof high-quality exportsFTAs, combined with excellent products, turn Peruvian exports into national ambassadors

This report is available at www.unitedworld-usa.com

AA UUNNIITTEEDD WWOORRLLDDSSUUPPPPLLEEMMEENNTT PPRROODDUUCCEEDD

BBYY::Gonzalo del Rio, AgustinaBellsola, Virginia Di Paola, Marco Pazos, and Alvaro

Silva Santisteban

CCoonnttiinnuueedd oonn ppaaggee 22

Distributed by USA TODAYWednesday, September 15, 201022

PERU

try that either export or wantto sell abroad. PromPeru Ex-portaciones even subsidizesvisits by Peruvian companiesto foreign trade fairs, wherebusinesses can meet new po-tential clients and find newmarkets. The agency also pro-motes Peruvian productsabroad, and provides busi-nesses with vital informationregarding possible problemsand opportunities.

“We have to have the ca-pacity to act like an early warn-ing system, to alert ourcompanies to potential risks,”comments Juan Carlos Math-ews, export director forPromPeru. “We can also ad-vise them on potential op-portunities, and give themideas about where to invest.”

PromPeru has taken a spe-cial interest in promoting Pe-

ruvian agricultural products.To that end, the agency is oneof the sponsors of Expoali-mentaria, a trade fair held an-nually in Lima where thecountry’s food producers canshow off their wares to an in-ternational audience. This yearit will be held on Sept. 22-24.

Currently the biggest part byfar of Peru’s exports are min-erals. Total exports grew 37%in the first half of 2010, andminerals represented about60% of the total and 80% of tra-ditional exports, which also in-clude fish and agriculturalproducts.

Peru’s exporters have movedbeyond those typical goods,though, and have started pro-ducing and selling productsthat wouldn’t normally be as-sociated with the country, andwhich are also doing their partto boost gross domestic prod-uct growth, said Juan Varilias

Velasquez, chairman of ADEX,the association of Peruvian ex-porters.

“Our exports are classifiedas traditional and non-tradi-tional, with products such ascoffee and minerals countingas traditional,” says Mr. Varil-ias. “But it’s precisely the development of the non-traditional products that,through innovation and cre-ativity, are helping provide uswith such good growth.”

Non-traditional exports, in-cluding textiles, chemicals, andmachinery, are already helpingdiversify Peru’s foreign tradesector. Sales abroad of suchitems increased almost 20% inthe first half of 2010.

Aldo de Fillipi, executive director of the AmericanChamber of Commerce (AM-CHAM) in Peru, agrees thatthe sectors with the greatestpotential for growth in exportsare mining and hydrocarbons,agroindustry and fishing, andtextiles and clothing.

“As the rhythm of domesticeconomic activity has been sodynamic in the past few years,I believe these three major sec-tors complement each other.And, with greater investmentin infrastructure, dynamism inthese sectors – and thereforethe economy – will continue,”he claims.

Thanks to the efforts of thegovernment and groups likeADEX and AMCHAM, theeconomy is well prepared toexpand rapidly in the future.

Financial independence is some-thing that the elderly in many de-veloping nations do not have theprivilege of enjoying. State pen-sion funds, if they do exist, bare-ly even cover the most minimalof needs, and retired people of-ten end up depending on theirgrown-up children.

In Peru, the largest growingeconomy in Latin America ac-cording to the IMF, private Pen-sion Fund Administrations(AFPs) are changing demo-graphic trends by affording se-niors with much higher pensionsthat allow them to lead more in-dependent, and comfortable,lives.

Profuturo is Peru’s oldest AFP,established in 1993. Under-standably, in the beginning pri-vate pension funds were deemedby many as too risky or perhapseven unnecessary, and of theeight original AFP’s created inthe first several years, only fourremain. Profuturo perseveredand today boasts more than onemillion clients.

AFP Profuturo’s credibilityand strength were further bol-stered by its 2010 inclusion in theScotiabank Group. As a new ful-ly-fledged member of this group,Profuturo is now backed by Sco-tiabank’s 178 years of interna-tional experience and hasbecome part of the financial gi-ant’s 1.2 billion dollar investmentin the country.

Peru’s Scotiabank Groupcomprises Scotiabank, Profu-turo AFP, Crediscotia, ScotiaFondos (Scotia Funds) and Sco-tia Bolsa (Scotia Stock Market).It employs more than 10,000people to serve its more thanthree million customers in Pe-ru. Profuturo’s incorporation in-to this prestigious group beganin 2008, when Scotiabank tookout a 50 percent stake in the AFP.In March 2010, it acquired 99.5percent.

“Scotiabank shares our samevalues and culture, and level ofcustomer care and corporate so-cial responsibility, creating a win-win situation,” says Mariano PazSoldan, General Manager ofAFP Profuturo. “The adjustmenthas been perfect, generating thenecessary synergy to allow thegrowth of both institutions.”

AFP Profuturo, like all Peru-vian AFPs, invests its clientsmoney in authorized financialinstruments, including bonds,stocks, and certificates of de-posits, among others. And Pe-ru, as a rapidly expandingeconomy, promises good re-turns. Senior government staffproject an estimated GDPgrowth of between 7% and 8%for 2010.

The economy’s drastic up-swing has much to do with thePeruvian business community.According to Profuturo’s GM,this is due directly to the vio-lence and poverty the populationhas suffered for so long.

“Peru experienced a very se-vere crisis with terrorism, hy-perinflation and shortages offood, energy, water…everything.When you live through such aharsh crisis, it makes you reactin order to try and not repeat thisexperience. Now employers arecloser to the State. They haveunderstood the importance ofmacroeconomic, political andsocial stability and this has al-lowed us to open our economyto the world,” he explains.

Better business means morejobs, and more jobs means morepeople with income to invest.And what better to invest in thanone’s own future? Setting asidea sum of money on a monthlybasis would produce little re-sults on an individual basis. Butwhen millions of people are do-ing it, and putting the money inan AFP like Profuturo ratherthan under the mattress, billions

of dollars become available forinvestment, thereby fuelling theeconomy. Profuturo investslargely in government instru-ments, the financial sector, en-ergy and hydrocarbons, telecom,mining, real estate, utilities, foodand drink and cement, amongothers.

“When the system began, thelong-term investments were 90days. Now we have investmentsof more than 40 years. Also, inthe last 10 years, the fund has

been growing 10.8% annually.Beyond the contribution to thedevelopment of the country, theexistence of the fund enablesmore Peruvians to have a fairpension, giving them peace ofmind of a secure future,” saysMr. Soldan.

WWhhaatt aarree PPrrooffuuttuurroo’’ss ccoomm--ppeettiittiivvee aaddvvaannttaaggeess??

We look to offer excellent ser-vice to our clients, providing thenecessary information and ad-

vice at every stage of their lives,not only at the level of pensionfunds but also financial plan-ning, so when clients join us ataround the age of 20, they willbe with us for about 40 years. Wewant to give them the best re-turn on their funds.

PPlleeaassee tteellll uuss aabboouutt PPrrooffuuttuurroo’’ssssttaannccee oonn CCSSRR..

There has been a lot ofprogress in understanding theconcept of CSR: that it isn’t acharity but rather a theme in-herent in business. We can’t bein a failed world and hope to bea successful business. We canonly be a successful business ifwe have a successful society, andthis is an issue for the mediumto long term.

Therefore, CSR constitutes afundamental part of our phi-losophy and our work in thisarea has made us a model com-pany in these types of initiatives.As one of Peru’s foremost com-panies, we also try to lead by ex-ample and inspire othercompanies to participate, be-cause we believe in humankind’scapacity to produce importantchanges and create a more justand fair society.

PPrrooffuuttuurroo hhaass ffoorrmmeedd aann aall--lliiaannccee wwiitthh UUNNIICCEEFF.. WWhhaatt pprroo--ggrraammss hhaavvee yyoouu uunnddeerrttaakkeennttooggeetthheerr??

One of our main concernswas knowing that there is a per-centage of children here bornwith little hope for the futuredue to malnutrition not only inthe childhood years, but also inthe mother’s womb. We decid-ed to partner with UNICEF andtake direct action to reverse thisproblem. Thus the Huasac Pro-ject was developed over six yearsago in Cuzco, which covershealth, education and early stim-ulations in four communities,initially. Now the Huasac Project

reaches over 20,000 people,9,400 of which are children.

The initiative resulted in thecreation of the Association ofFriends of Childhood Munici-palities (AMAN), which seeksto involve municipal authoritiesin the proposal. We also workwith the NGO Coprodeli onskills transfer for students andsmall entrepreneurs. Addition-ally, we have TUYO, winner ofthe prize for best volunteer pro-ject in the country, which in-volves our partners in socialactivities for disadvantaged chil-dren.

PPeerruu’’ss eeccoonnoommyy iiss ddeeffiinniitteellyyoonn tthhee uupp aanndd uupp.. WWhhaatt ddoo yyoouuccoonnssiiddeerr ttoo bbee tthhee mmaaiinn sseeccttoorrssccoonnttrriibbuuttiinngg ttoo ggrroowwtthh??

Growth is taking place in avariety of sectors. In recent yearsconstruction has risen and hada positive impact on employ-ment growth. We also have min-ing, which is generating a lot ofinternational investment. Theindustrial and service sectorshave also seen impressivegrowth. In tourism the countryhas much to offer. Not to men-tion the issue of gas that will pos-itively impact the country’seconomy. I do not see an in-dustry or sector where there areno opportunities to develop. Wehave a lot of potential.

IInn ccoonncclluussiioonn,, hhooww wwoouulldd yyoouulliikkee yyoouurr ccoouunnttrryy ttoo bbee ppeerrcceeiivveeddiinn tthhee UU..SS..??

As a country full of possibili-ties, where one can not only gen-erate good investment and makemoney, but also have fun. Thisis a stable country that respectsthe rules of the game for every-one. I do not know a single per-son that has invested in Peruand that has not fallen in lovewith the country. I think thiscountry is seeing the best op-portunities of the last 50 years.


Profuturo, offering a more attractiveretirement plan since 1993

MARIANO PAZ SOLDAN, General Manager of AFP Profuturo

Peru’s original Pension Fund Administrator, Profuturo’s investments both bolster the economy and hold promise of a more comfortable future for Peruvian workers

Peru’s Private Pension System (PPS)was created in 1992 as an alternativeto the public pension program, andwas aimed at stimulating and addinggreater effectiveness to the country’s

social security system. Today, the PPS is comprised of four com-

panies that manage the contributions of mem-bers, which currently number more than fourmillion people. In addition to its initial man-date, the PPS has also contributed significantlyto Peru’s economic growth through its re-serves.

These reserves are invested in different sec-tors of the economy by the fund managers, andnormally involve long-term investment in a di-versified portfolio including non-financial in-stitution bonds, long-term deposits, mortgagenotes, shares, and state bonds both at homeand abroad. Consequently, the PPS contributesto the development of the national economy

while achieving its main goal of providing de-cent pensions for its contributors.

In December of 2008, the PPS represented13.2% of GDP and 56.8% of domestic savings.In June of 2009, the PPS administrators formedthe first exchange traded fund of Peru (ETFPeru) listed in the NYSE under the ticker sym-bol EPU (MSCI All Peru Capped Index Fund).To create EPU, the administrators marketedshares of some 25 Peruvian holdings where ithad placed funds, 13 of which are natural re-

source companies. Consequently, EPU is a ve-hicle that international investors can use forinvesting in Peru’s mining companies, for ex-ample.

One of the major benefits of the ETF is itseffect on the Peruvian capital market, whereit has brought increased liquidity, and whichwill translate into increased benefits for themembers of the PPS. EPU is sponsored by Bar-clays Global Investors.

Through their investments, the PPS are al-

so contributing to monetary stability in Peruwhile generating a new source of financingfor the state, thus increasing Peru’s opportu-nities of obtaining long-term credit. In thissense, PPS works in tandem with Peru’s Cen-tral Reserve Bank (CBR).

CBR President Julio Velarde says that in-vestment has and will continue to be a key el-ement in Peru’s growth. He comments,“Investment over the past three years, in-cluding 2009 which wasn’t a great year, werethe highest in over a decade. In the growthprocess, both small investment and large in-vestment counts. Foreign investment has beena bit more focused on the mining sector, whichis important for international reserves as wellas taxes but not so much for employment.However, employment levels have been risingby 8% which means that the other sectors areregistering growth, driven by these smaller in-vestments.”

Established in 1999, Miranda &Amado Abogados is built upona foundation of prestige and a vi-sion to provide the most per-sonalized counseling serviceson the market for a wide rangeof sectors relevant to Peru’s de-velopment.

To begin with, Miranda &Amado’s team of lawyers strikethe right balance of experienceand youth. Many of the teammembers hail from the foremostlaw schools in the U.S. and theU.K. and have accrued experi-ence in prestigious law firms inNew York, Chicago, Washing-ton DC and London.

Secondly, Miranda & Amadois the only Peruvian companyto have ever been nominated tothe Chambers Global awards inthe category of ‘Best Latin Amer-ican Law Firm of the Year’ in2007. In 2009, the firm wasgranted the Chambers awardfor ‘Best Peruvian Law Firm’ andin the same year, senior partner

Jose Daniel Amado was award-ed the ‘Latin American Law FirmLeader of the Year’ award byLatin Lawyer.

Clients of the law firm bene-fit from the vast experience andexpertise Miranda & Amadoboasts in all areas of the law,while enjoying a boutique feel ineach and every department. Thefirm’s clients are market leadersin their respective fields of en-ergy, oil & gas, telecoms, mining,infrastructure, and banking andfinance. Its expertise in thesefields is further supplementedby leading practice groups incorporate finance, mergers andacquisitions (M&A), litigation,tax, labor, antitrust, and intel-lectual property.

Lawyers at Miranda & Ama-do have participated in some ofPeru’s most important infra-structure projects that have tak-en place over the past decade.Currently, the firm is counselingTgP (Gas Transporters of Peru)in the development of an addi-tional gas supply pipeline at anestimated $700 million, and Ni-tratos del Peru (a JV betweenGrupo Brescia and Sigdo Kop-pers) in the installation of apetrochemical plant complex atan estimated $640 million.

The firm’s M&A departmenthas often been sought out bymultinational investors forcomplex corporate transac-tions. In the banking and fi-nance sector, Miranda &Amado have been instrumen-tal in the structuring of the firsttwo 144A issuances of hybridinstruments by Peruvianbanks. In 2009 and 2010, thefirm has been recognized bythe International Tax Review(ITR) as a top tier team ontransactional tax and tax plan-ning and has been short-listedin the ITR Americas Awards asTax Firm of the Year, amongother categories.

As a leading Peruvian com-pany, Miranda & Amado alsosets an excellent example inCSR and environmental re-sponsibility. Its Pro Bono Chal-lenge, for example, sets lawstudents to task in identifyingand proposing pro bono pro-jects. The winning project isthen fully financed and imple-mented by the firm. Last year,Miranda & Amado became thefirst, and only still to date, car-bon-neutral law firm in Peru.

MIRANDA & AMADO ABOGADOS

Full service law firm withinternational expertiseWhen Peru’s leadingcorporations andcompanies need expertlegal advise, they turn tothe country’s top rankedlaw firm, Miranda &Amado

CCoonnttiinnuueedd ffrroomm ppaaggee 11

PENSIONS FOR DEVELOPMENT

Distributed by USA TODAY Wednesday, September 15, 2010 33

PERU

Pension funds secure strong growthAFP Integra, part of the mighty ING Group, pioneered the private pension fund industry in Peru

Peru’s burgeoning private pen-sion fund sector has bouncedback from a temporary dip inthe value of its assets in 2008to rejoin its trajectory of sus-tained growth. According tothe banking and insuranceregulator, SBS, the nation’s pri-vate pension fund adminis-trators (AFPs) managed $25.6billion at the end of April, upfrom $23.9 billion at the endof 2009, marking a return toform after the global financialcrisis reduced the sector’s as-sets to $15.6 billion at end-2008.

“When you go in a car at180 km/h – which is what Pe-ru did up to 2008 – and thenyou go at a speed of 100 km/h,you feel as if you’re not mov-ing forward,” says BernhardLotterer, country manager ofING Peru and president of theboard of AFP Integra. “For thisreason, what you must do isquickly open the car windowsto feel the speed of going 180km/h, but going at 100 km/h.This is how figuratively speak-ing one must face the rollingof the economy to get back ontrack to 180 km/h. In sum-mary, I would say that thebusiness people, the publicsector and CONFIEP [the Na-tional Confederation of Pri-vate Business Associations]in Peru played a crucial roleto open these windows andclose them back when weagain reached 180 km/h.”

The turnaround is to be noblip. According to LatinFi-nance, the sector’s assets areprojected to double over thenext four years and go hand inhand with the country’s eco-nomic outlook. Peru’s GDPexpanded by 6% in the firstquarter of 2010 – a strong in-crease on the 1.9% for thesame period last year – andwas the second-highestgrowth rate among LatinAmerica’s top seveneconomies. Furthermore,President Alan Garcia has saidthat over the next five yearsPeru’s economy is expected to

see an average growth rate of6.5% and foreign direct in-vestment will double. TheCentral Reserve Bank of Pe-ru (BCRP) reports that FDIreached $4.8 billion last yearand estimates it will rise to$5.3 billion in 2010.

According to Mr. Lotterer,the sectors driving economicexpansion will be construc-tion, mining, energy, agricul-ture and forestry. He says,“The energy industry is help-ing the country’s growth. Itnormally grows 1.5% morethan GDP, which representsan additional engine, so in-stead of growing 5% we reach7%. All this is a chain effectthat translates into a ‘demand

effect’, which brings wellnessto society. When there’s atransformation in infrastruc-ture, agriculture, construc-tion, and other sectors,demand grows. After manyyears and because of the con-tinuity of macro-economic

policies, Peru has a very pow-erful middle class, which waspreviously much smaller. To-day we can see the country’sgrowth in greater commercialactivity, especially in theprovinces, which has gener-ated a bigger middle class, cre-ating an engine forconsumption and demand.This in turn builds up trust innational or foreign invest-ment.”

Owned mainly by foreigninvestors, AFPs have becomeinfluential players in Peru’s fi-nancial markets since they be-gan operating in 1993. AFPIntegra has pioneered the de-velopment of the industry inPeru and has been active since

the beginning. The companyis backed by the ING Group ofHolland, one of the world’slargest pension and insuranceconglomerates with over 150years of experience offeringbanking, insurance and assetmanagement services. Thegroup serves over 85 millioncustomers in more than 40countries around the world. In2009 it was the largest bank-ing and financial company in

the world by revenue, featuredin eighth place in Fortune’sGlobal 500 annual ranking ofthe world’s largest corpora-tions.

In June, the BCRP increasedthe limit on international in-vestments made by AFPs from

24% to 26%. This change couldrepresent up to $500 millionextra being invested abroad asfund managers look to diver-sify their portfolios away froma heavy reliance on investingin the nation’s hefty mineralsector. In all, since November2006 the BCRP has graduallyraised the ceiling from 10.5%to the current 26%.

Peru’s largest private pen-sion fund administrator, AFP

Integra intends to take full ad-vantage of the BCRP’s recentannouncement. Its overseasholdings were already at theprevious 24% cap and it is look-ing for ways to diversify itsportfolio and investment risk.

The company manages thelargest pension fund in thecountry, which amounts to22,158,488 million soles ($7.9million) – around 31% mar-ket share – and also has aportfolio of more than 1.16million members. “We handlethree types of funds: one thathas up to 10% in stocks; thesecond is a mix fund or bal-anced fund that has up to 45%in stocks; and thirdly thegrowth fund has up to 80% instocks. Nowadays, we are veryclose to these limits of stocksdistributed in the local andforeign markets. So, we arelooking at investment diver-sification,” says the presidentof the board.

AFP Integra is highly com-mitted with corporate socialresponsibility . “We focus ourefforts on three sectors: ex-treme poverty, education anddisaster areas,” says Mr. Lot-terer. “We developed and im-plemented a self-sustainableprogram in order to improvethe life quality of the com-munities in vulnerable situa-tions. We focus on 4 pillars:improving school infrastruc-ture, personal values devel-opment, IT training andbuilding a business that en-sures the sustainability of theschool.” The company is a keypartner of the Happy HeartsFund, which works to improvechildren’s lives through edu-cational and sustainable pro-grams in natural disaster areas.

Mr. Lotterer has been at thehelm of AFP Integra since thebeginning and was part of cre-ating the private pension sys-tem in Peru. He is verysatisfied to be part of a com-pany and a system that is con-tributing to develop thePeruvian society and bring-ing wellness to their people.

BERNHARD LOTTERER, Country Manager of ING Peru and President of the Board of AFP Integra

WWhhiicchh sseeccttoorrss aarree ccoonnttrriibbuuttiinnggmmoosstt ttoo eeccoonnoommiicc ggrroowwtthh??

Internal consumption relatedto the construction sector is veryimportant, as are the markets foragroindustrial products whichare recovering thanks to grow-ing exports. Both of these sectorsrequire a large workforce and aretherefore creating plenty of jobs.

YYoouu’’vvee ssaaiidd tthhaatt iiff tthhiiss gglloobbaall rree--cceessssiioonn hhaadd hhaappppeenneedd 1155 ttoo 2200yyeeaarrss aaggoo,, PPeerruu’’ss eeccoonnoommyy aanndd iittssddeemmooccrraattiicc ssttaabbiilliittyy ccoouulldd hhaavveebbeeeenn ddeessttrrooyyeedd.. WWhhyy ddoo yyoouu tthhiinnkkPPeerruu aanndd mmoosstt LLaattiinn AAmmeerriiccaannccoouunnttrriieess wweerree lleessss hhuurrtt bbyy tthhee eeccoonnoommiicc ccrriissiiss??

Happily we have learned from past mistakesand tragedies, for example the debt crisis in the80s and the crisis in the 90s. Latin America en-tered the 21st century with the intention ofnot letting ourselves be surprised by any cri-sis, so when this crisis came along we knew howto confront it relatively successfully.

WWhhaatt bbeenneeffiittss hhaavvee ffrreeee ttrraaddee ppaaccttssbbrroouugghhtt tthhee ccoouunnttrryy??

When we entered the governmentthree and a half years ago, Peru ex-ported approximately $15 billionworth of goods and now Peru ex-ports $30 billion worth. Doublingexports in less than five years, andnot just because of the price of met-als, shows a lot. But you also can’t justlook at the trade side, you also haveto look at the message this sends toinvestors, because they can export,tariff-free, to China and the U.S.from Peru.

AAfftteerr ssiiggnniinngg aa ffiinnaanncciinngg aaggrreeeemmeennttwwiitthh GGeerrmmaannyy aanndd aa tteecchhnnoollooggyy ppaacctt wwiitthh IInnddiiaa,, wwhhaatt ccoouunnttrriieess aarree yyoouu nneeggoottiiaattiinnggttrraaddee ppaaccttss wwiitthh nnooww??

I think India should be our next step in theprocess of deepening our agreements. We’vealready done a lot of work with these partners,and I believe India is a new reality that wouldbe very interesting for us to explore.

“Happily, we’ve learnedfrom past mistakes”The Minister of Foreign Affairs discusses Peru’s economic growth and future direction

JOSE ANTONIO GARCIABELAUNDE,Minister of Foreign Affairs

The Lambayeque Region, innorth-coastal Peru, is an area thatrelies heavily on agricultural ex-ports, and AREX has lot to dowith its success. AREX guideslocal farmers and growers in avariety of areas, including watersupply, equipment, and market-ing, helping them to maintain ahigh level of productivity andprofitability. Alfonso Velasquezis the current president of this association,after having chaired ADEX (association ofPeruvian exporters) for two years and servedas Minister of Production under the Toledoadministration. He is active in the Lam-bayeque Region with his own agribusinesscompany, Procesadora Peru SAC.

“Over the past few years, the entrance of newplayers in the agricultural sector has allowed

for higher growth in this sector thanin any other,” he comments. Thereis more room for expansion, how-ever. “Possibly the negotiations [forthe FTAs] have progressed morequickly than the preparation of thebusinesses in terms of offer,” says Mr.Velasquez. “Today there are moremarkets than supply.”

“I believe Peru is the ideal com-plement for investments in thenorthern hemisphere, given theproximity of our port with those inthe U.S. as well as in Asia,” he adds.

As for Lambayeque’s strongsuits, Mr. Velasquez banks on

grapes, peppers, grenadines, and guanabanasfor their high demand in the U.S. and Europe.

Procesadora Peru SAC, staunch support-er of the small farmer, has been a flagshipcompany in the sector for nearly 25 years, spe-cializing in dried beans, and frozen andcanned foods. It was the first Peruvian com-pany ever to have its products sold in theU.S. market under an American brand name.

ASSOCIATION OF REGIONAL EXPORTERS (AREX)

Lambayeque, land of plentyThanks to Lambayeque’sfertile soil, excellent water,and plentiful sunshine,AREX has plenty ofbusiness to keep them busy

ALFONSO VELASQUEZ, President of AREX and Procesadora SAC



PERU


When a product arrivesin less than perfect con-dition, it can reflect bad-ly on the country’s entireindustry. This is whyAIB strives for ultimatequality in its exports. Italso makes sense, then,that AIB was the firstPeruvian company tointroduce HACCP andhave it approved byLloyd’s International.

AIB’s four investors,including one NorthAmerican and three Peruvians, have investedheavily since they bought the company fromColombian beer maker, Bavaria, in 2005. “We’veinvested $12 million. We’ve renovated the as-paragus fields, we’ve bought more lands, we’veinvested in the processing plants, and we’vemaintained the high quality standards Backushad implemented,” explains Mr. Falcone.

Today, AIB is the most diversified agricul-

tural company in Peru,in terms of geographyand finished products,raw materials, and pro-duction lines. It growsasparagus, avocados,jalapeños, artichokes,limes, lemons, peppers,mangos, and passionfruit. It also producesjuices, conserves, frozenfoods, oils, and dehy-drated food products.

For AIB, the sole Pe-ruvian agro-industrial

company listed on the Lima Stock Exchange,the U.S. is the most important market, to whichit exports up to half of its production. “I thinkthe American public needs to know that Pe-ru is an important ally, provider and produc-er of food items for its market,” says Mr. Böhmer.“It’s important to communicate that we havea liberal economy that makes us very com-petitive.”

AGROINDUSTRIAS AIB

Exporting Peruvian quality since 1987For Roberto Falcone and Axel Böhmer, general manager and commercial manager ofAIB, when their company exports a product, it represents not just AIB, but all of Peru

ROBERTO FALCONE,General Manager of AIB

AXEL BÖHMER,Commercial Manager of AIB

With a geographical diversitythat covers 84 out of the world’s114 existing life zones, acresupon acres of fertile lands,1,500 miles of coastline, andno lack of ambition to fully ex-ploit these renewable re-sources, Peru has a bountifulagricultural sector that offersconsumers healthy, fresh, andbest of all, delicious, products.

Aiming to become thestrategic food supplier for theworld, Peru is investing heav-ily in this sector and one of themost international initiativesit has launched is Expoali-mentaria. Selected importersfrom the world over, as wellas national buyers and dis-tributors, and the decisionmakers, managers and otherprofessionals from the foodindustry, hotels, restaurants,specialized shops, and su-permarkets are all invited toattend this food exhibitiontaking place between the 22and 24 of September in theSan Borja district of Lima.

Organized by ADEX (the as-sociation of Peruvian ex-porters), PromPeru, theMinistry of Agriculture, andthe Ministry of Foreign Affairs,Expoalimentaria Peru 2010 isthe most important food andbeverage-related businessmeeting in Latin America.

Some 300 representativesof Peruvian agro-industrialand fishery exporters and pro-

ducers, and suppliers of equip-ment, machinery, packaging,and other related services willbe present, encouraged by thesuccess of last year’s first edi-tion of the fair, which attract-ed nearly 8,000 visitors and200 national exhibitors. Onehundred international ex-hibitors will also be attendingthis year’s event, where theywill have the opportunity toshow off their wares to an ex-pected 14,000 visitors.

No food showcase of thismagnitude would be completewithout a gastronomic festi-val. Organized by ADEX withsupport from the Peruvian Gastronomic Society, the festival will feature live demon-strations by renowned chefs,and guests will be able to tastethe creations made with localproducts to truly appreciatethe quality that Peru is grow-ing and producing.

Other events planned overthe three-day event are the 3rdannual International Conven-tion of Organic Products, the5th annual National Aquacul-ture Convention, and the 2ndannual International Seminaron Fresh and Processed Fruitsand Vegetables.

wwwwww..eexxppooaalliimmeennttaarriiaappeerruu..ccoomm

EXPOALIMENTARIA

A food showcaseA food showcase anywhere in the world sounds like an interesting event, but when itcomes to Peru’s Expoalimentaria, it’s a downright delicious affair

Some of the world’s best quality produce and seafood comes from Peru

AGRICULTURAL WEALTH

The Ministry ofAgriculture isboosting agricul-tural exports as aviable way to sup-

port continued GDP growth.Peru’s agricultural sector hasseen solid growth over thepast several years. Indeed, ex-port revenues have nearlydoubled since 2006 when thepresent administration wasvoted in, and with sectoralgrowth at 2.3%, agricultureeven surpassed overall GDPgrowth last year by more thandouble. It contributed an es-timated 8.2% to the GDP in2009, and the Minister ofAgriculture, Adolfo de Cor-dova, projects further growthof between 3% and 4% for2010.

“This [growth] is importantbecause it allows us to see thatthe sector is moving forwardhand in hand with nationalgrowth,” he says. “In the lastfew years we’ve had a boom inexports, spectacular growth inproducts such as grapes, whichhave increased 43%. We’re thefirst exporter of organic cof-fee and we’re the world’s topproducer of artichokes. Exportof these products has risensteadily over the past two orthree years.”

Peru’s success in the agri-cultural sector can be attrib-uted to the country’s weatherand diversity of crops. “Inproducts, we’ve got aspara-gus, avocados, capsicums, ar-tichokes, organic coffee and

bananas, and many more,” heexplains. “The country has awide window for exports andexcellent productivity, thanksto our capacity to grow yearround.”

Indeed, one of President

Garcia’s economic focuses ison agricultural exports, andthe results can already be seen:export revenues rose from $1.5billion in 2006 to $2.6 billionin 2009. This year, the gov-ernment budgeted 650 mil-

lion Peruvian nuevos soles($232 million) for investmentin the sector, 20% more thanin 2009.

The U.S. will soon be see-ing more Peruvian produce,especially Hass avocados.

“We’re going to invade theAmerican market with ex-cellent quality avocados,” saysMr. de Cordova. “We’re goingto enter the U.S. withoutspoiling the market, though;we’re going to areas wherethey don’t produce avocadosbecause we want to give moreAmericans the chance to en-joy this amazing product.”

The Ministry of Agricul-ture is encouraging the ex-pansion of the “agriculturalfrontier”, making funds avail-able to agricultural and irri-gation projects in places suchas Olmos, Majes, Chinecasand Chavimochic. Likewise,the ministry’s various pro-grams to promote agriculturalinitiatives are providing morethan 180 million nuevos soles($64 million) for entrepre-neurs who present small busi-ness plans and projects.

THIS SEPTEMBER, THE2ND ANNUALEXPOALIMENTARIAWILL SHOWCASE TO14,000 VISITORSPERU’S DELECTABLE,HIGH-QUALITYAGRICULTURALPRODUCTS

‘WE’RE THE FIRSTEXPORTER OFORGANIC COFFEEAND WE’RE THEWORLD’S TOPPRODUCER OFARTICHOKES. EXPORTOF THESE PRODUCTSHAS RISEN STEADILYOVER THE PAST TWOOR THREE YEARS’

Exporters can expand theirsales abroad in many ways, byfor example taking marketshare from competitors or byseeking out new markets. Pe-ru’s biggest foreign market byfar right now is the U.S., butas the country’s businesses sellto more countries, the im-portance of the neighbor tothe north is slowly shrinking.

“As exporters, the NorthAmerican market is the mostimportant destination,” JuanVarilias, chairman of ADEX,the association of Peruvian ex-porters. “In 2009 it was still avery important market, but itwas bigger before, and that’sbecause the number of mar-kets that Peru exports to hasgrown.”

Peru’s exporters startedlooking for new markets pri-or to the economic crisis thathas shaken the U.S. andshrunken that country’s im-ports. That strategy is start-ing to pay off, because theeffects of the recession in theU.S. have of course been felt

in its foreign trade partners as well.

“The American market hasgone through a difficult situa-tion, and because 40% of Pe-ru’s exports go there, in manycases Peruvian companieshave also suffered because ofthis stage of the crisis,” ex-plained Mr. Varilias.

In the past two decades, Peru’s GDP growth has re-mained in the black with the

exception of 1992 and 1998.Even this year, with the glob-al economy still in a rut, thegovernment expects to seegrowth of between 5% and 7%.According to Mr. Varilias, Pe-ru’s exports – especially thenon-traditional ones – havebeen instrumental in this pos-itive economic growth. And,while exports to the U.S.dipped as a consequence ofthe economic recession, ex-ports overall have remainedstrong, totaling $11.45 billionin 2009. In June of this year ex-ports grew 40%, reaching $3.04billion, breaking the historicalrecord of June 2008.

One promising market forPeru is the E.U., the world’slargest economic area. In 2009it was already Peru’s second-biggest trading partner, afterthe U.S., and that relationshipis poised to improve in com-ing years after a trade agree-ment was signed between thetwo earlier this year.

ADEX was established in1973 to defend the interests

Adolfo de Cordova, Minister of Agriculture, inspecting growing fields in one of Peru’s fertile valleys

of Peru’s export sector. The as-sociation strives to boost thecompetitiveness of Peruvianproducts while lending servicesto exporters, importers, andbusiness service providers.Members include large, mediumand small companies that sharea common denominator: the vi-sion to reach ambitious busi-ness objectives.

“We are a type of union andwe owe it to our members togive them access to the infor-mation they need,” explains Mr.Varilias. “We have the country’s

best information data base in re-gards to international commerce,and our goal is clear: to give in-dustrial entrepreneurs in theprovinces the opportunity toknow their business possibilitiesbeyond our borders.”

The chairman says that ADEXis in the process of decentraliz-ing its structure and lending it amore international focus in or-der to “exchange knowledgeabout modernizing internationaltrade and be able to recommendto the government the changeswe deem necessary.”

As president of Gandules, anagricultural company heavilyinvolved in exporting its veg-etables and fruits to the U.S.,Mr. Varilias has his finger onthe pulse of the agricultural sec-tor. He is proud of the sector’sperformance in the past fewyears and claims that thanks tohuge efforts and investment intechnology, his country’sagribusiness industry is now ata world-class level. “Never be-fore had so many internationalcertifications endorsed Peru’sagro-industry,” he says. JUAN VARILIAS VELASQUEZ,

Chairman of ADEX

ADEX, promoting exporters’ interests

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PERU


A Latin American dairy kingPeru’s growing eco-nomic strength can beattributed to manythings, among which isthe positive perfor-mance of exports.Grupo Gloria, presentin the areas of dairy,agribusiness, cement,and cellulose, is a fam-ily business that hasemerged as the undis-puted dairy leader inPeru and beyond.

The origins of GrupoGloria go back nearly70 years. In 1941 Gen-eral Milk Company Inc.established Leche Glo-ria S.A. Nestlé, throughits subsidiary Carna-tion Company, acquired themajority share of Gloria S.A.in 1985, but just one year lat-er, Jose Rodriguez boughtNestlé out, becoming the ma-jority shareholder of GloriaS.A. Adding milk to the 19-year old family transportbusiness, Jose and his broth-er, Jorge Rodriguez, formedthe new Grupo Gloria.

For the first few years,Grupo Gloria specialized indairy, namely evaporatedmilk, and its transport. Thiscontinues to be the group’sflagship industry today, as itexports to nearly 50 coun-tries around the world. In

Haiti alone, 90% of themilk consumed comesfrom this Peruviancompany.

While other seg-ments of Gloria’s busi-ness are experiencinggrowth (for example,the price of sugar is ris-ing at a rate of about24% and cement, at20%), milk is one com-modity with a fallingprice. Gloria’s strategyfor keeping this sectorfinancially robust is toset an average priceand then buy where thecheapest inputs are,whether at home orabroad. This is a

scheme that the Saudis arealso practicing; as a result,Gloria has lost its strongholdin the Middle East and isfighting to maintain its mar-ket share in western Africa.

“The Caribbean is ours,”claims Jorge Rodriguez, thegroup’s chairman, “and we aremoving to Asia also very con-servatively.” Grupo Gloria al-

so remains leader in Bolivia,Peru and Puerto Rico, and inother parts of South Ameri-ca, the group is growing.

“We are not market leadersin Colombia, Ecuador, or Ar-gentina, but in the coming

years we will promote thissector in these countries, aswe believe we have thestrength of volume and inte-gration,” says Mr. Rodriguez.“We have an advantage overthe major multinationals,

who are our closest compe-tition. We are more agile inmaking decisions, and we’veused this to our advantage onnumerous occasions.”

Another advantage thatGloria boasts is its trans-portation network. Before ac-quiring Gloria S.A., theRodriguez family had alreadybuilt up one of Peru’s mostimportant heavy cargo trans-port businesses. With suchan efficient distribution net-work in place, the group wasmore easily able to create a di-verse and competitive busi-ness structure.

Thanks to a strong focuson branding in Peru, GrupoGloria is a household name.“The brand is well remem-bered by the consumer,” ex-plains Mr. Rodriguez. “Weare among the first in termsof recall. This is related to theinvestment that we make inadvertising and marketing.”

As exports play such an im-portant role in the familybusiness and in Peru’s agri-cultural sector overall, the

Rodriguez brothers wereamong those attending thefree trade agreement discus-sions with the U.S. and Eu-rope. “We managed to getenough conditions that favorus that for the U.S. economymeans nothing, but for us arevery important,” recalls thechairman. “The items Peruasked for were milk, sugar,rice, alcohol, bananas. I be-lieve that in our companythese FTAs are vital.”

Also important for GrupoGloria’s expansion are invest-ment and the ability to capi-talize on existing strengths.

“We continue to invest inPeru and outside of Peru,” saysMr. Rodriguez. “We are in sixcountries today and the ideais that, in the coming years,we’ll try to develop more in-vestment in the areas wherewe have certain technologythat gives us an advantage,namely in dairy and agro-business. We’re also compet-itive in cement production,paper and cellulose, and agro-industry.

GRUPO GLORIAEXPORTS DAIRY TONEARLY 50COUNTRIES, AND INHAITI, 90% OF THEMILK CONSUMED ISPRODUCED BYGLORIA

THE GROUP’S ADDEDADVANTAGE ISOPERATING ITS OWNTRANSPORTATIONNETWORK, THEORIGINAL ANCHOROF THE BUSINESS

Grupo Gloria is the market leader in several countries in evaporated milk. It also runs thriving agribusiness, cement and cellulose companies

Established 14 years ago, El Pedregal is head-ed by Manuel Macedo de Rivero, who in thelate 80s through the mid 90s learned aboutthe table grape industry in Chile. When in-vestment laws in Peru changed, he saw awindow of opportunity to return to his na-tive Peru and cover a market segment whosedemands had heretofore gone unfulfilled.

“It was sort of a comparative advantagefor us,” recalls Mr. Macedo de Rivero, thegeneral manager. “However, over the pastfew years we’ve been working to turn thesecomparative advantages into competitive

advantages.”With patents on

genetically improvedvarieties of seedlessgrapes, especiallycrafted for the dis-cerning tastes of theU.S. and northernEurope, El Pedregalexports high qualitytable grapes to morethan 35 countries, in-cluding the U.S. (be-ing the largestmarket today at 27%),Canada, Russia, Chi-na, and several Eu-

ropean and Latin American nations.Of late, El Pedregal has launched a more

aggressive branding campaign to introduceand differentiate its own brands. “This yearwe’re working with supermarket chains inthe U.S. to prepare weekly programs and spe-cial packaging to familiarize consumers withour name,” explains the general manager.

In June, Peru shipped a total of $62 mil-lion worth of table grapes to the U.S. andADEX (the Association of Exporters of Pe-ru) recently listed the company amongst themost important grape exporting companies,with 28.5% of the total sent volume. Theseachievements position the company as anindisputable reference in the Peruvian agro-industrial sector.

EL PEDREGAL

No sourgrapes forthe U.S.market Juicy, snack-sized, and brimming withnutrients, grapes are one of nature’smost endearing gifts to humankind. Fewcompanies know grapes like El Pedregal

MANUEL MACEDO DERIVERO, General Managerof El Pedregal

Just over 40 years ago, Rafael Quevedo Flores,armed with animal nutrition and husbandrystudies, headed into the Peruvian desert to pro-duce, what to many people seemed, a miracle.

After a fair share of experiments with the lo-cal materials (namely, sand), Mr. Quevedo man-aged to build storehouses to raise chickens. Hethen traveled to an Israeli kibutz to learn tech-niques for farming in harsh terrain, and con-vinced the firm Netafim that Peru was anexcellent market for its smart-drip technology.

Obtaining water from underground sourcesand using Netafim technology to get the most

out of each drop, in thespace of just a fewdecades, Mr. Queve-do’s Grupo El Rociohad gone from raising2,000 chickens amonth to raising twomillion, in addition togrowing asparagus, ar-tichokes, piquillo pep-pers, and avocados –all of this on thousandsof hectares of land pre-viously consideredworthless.

A pioneer in Peru-vian poultry farming, founding father RafaelQuevedo was not only among the first peopleto move the industry into desert, he was alsoone of the first to vertically integrate the busi-ness by producing his own feed back in thetimes when everyone simply bought it.

“For a poultry company, we’re not a big com-pany. In fact we’re considered small-to-medium,but we’re well consolidated,” explains Mr. Queve-do. “We have strategic alliances with Ecuador,Bolivia, and Colombia, and we’re closing a dealto supply the Venezuelan market.” With all ofthe required certifications in place, his compa-ny also exports to the U.S., Canada, and Europe.

Next on Grupo El Rocio’s agenda is the de-velopment of 400 hectares of grapevines, cit-rus fruit and grenadine trees in the Chavimochicproject.

GRUPO EL ROCIO

Finding newbreedinggrounds inthe desertGrupo El Rocio has pioneered thepoultry farming industry andsuccessfully diversified into fruits andvegetables as well

RAFAEL QUEVEDO FLORESPresident of Grupo El Rocio

JORGE RODRIGUEZ, Chairman of Grupo Gloria


PERU


‘You get what you pay for’ is-n’t always true. Often, thingsare overpriced and of merelyaverage quality. Rarely does aproduct go beyond a buyer’sexpectations, with high qual-ity at a reasonable price. P&DAndina is a one of those spe-cial companies that producesexcellent quality brands.

Famous in Peru for itschocolates (with toys), nougatcandies, dairy products, juices,and breads, P&D Andina’s lineof fruit juices, Selva, has madeits way into North Americangrocery stores and homes. Afar cry from sugary and artifi-cial blends, Selva gives con-sumers a fresh taste of Peruvian fruit.

“We use three types of mangoes, meaningour nectars have different flavors,” explainsJorge Garcia Seminario, general manager atP&D Andina. “This is what sets our mangojuice apart from the rest. Also, our ‘chichamorada’ (a soft drink made from purple corn)has no artificial flavoring; we buy the corn our-selves and add it in naturally. Our pineapplejuice is 50% pure pulp. We market gourmet

products, which explains thepricing. Our products are notmass-made; instead, we focuson niches in the market – con-sumers that seek quality anddon’t base their purchase onprice.”

“We’re extremely strict withquality control and our mis-sion as a company is to offereven more than what the clientexpects for what he or shepays,” he adds.

Although P&D Andina’s Sel-va has been Peru’s premiumbrand of juices for more than40 years, it is its line of dairyproducts that forms the com-pany’s business backbone. The

company is in the process of vertically inte-grating its business since it acquired its owndairy cows, and can now cover the entire pro-duction chain – from milking the cows all theway through sending its yogurts, milk, andother products to the final consumer.

Moreover, P&D Andina’s excellent chocolatesare leaders in their categories, and its range ofpanettone and bread brands is the largest inthe market.

P&D ANDINA

The Peruvian epicuresP&D Andina produces one of the highest quality lines of fruit juices: Selva. With allnatural ingredients and superb taste, it’s convincing the most demanding of tastebuds

Taking full advantage of Peru’sfertile lands and year-roundgrowing season, Gandules Inc.is the leading grower of pi-geon peas (‘gandules’ in Span-ish), a staple food of theCentral American diet.

Established in 2002, Gand-ules initially focused on theexport market – in the firstfew years nearly 90% of its pro-duction was exported to theU.S. The company loweredthis to 45% and thus was ableto diversify its production lineinto other vegetables and fruit.

Gandules, one of Lam-bayeque Region’s biggest com-panies, has become the world’smost important capsicums

producer. It exports its pep-pers, of both the spicy andmild varieties, throughoutCentral and North Americaand Europe.

“We have the best produc-tivity levels,” says Juan Varil-ias Velasquez, President ofGandules Inc. “Our engineershave practically perfected ourproduction of capsicums. Wehave fields that produce onaverage 65 tons per hectare,something unheard of in oth-er countries and this makesus highly competitive.”

Last year in the face of gen-

eral losses across the sector,Gandules billed for $34 mil-lion, nearly 20% more than in2008. Mr. Varilias attributesthis to the company’s new lineof fresh grapes, which wereexported for the first time in2009. This year he estimatesGandules’ earnings will reachclose to $40 million.

Mr. Varilias, who is also thecurrent president of ADEX(the assocaition of Peruvianexporters), was the first totake up the banner of intro-ducing Peruvian capsicumsin the U.S. , and today workswith over 10 other Peruvianagricultural companies to fur-ther open the North Ameri-can market to this crop. In themeantime, Gandules will con-tinue growing its star cropsof pigeon peas and peppers,along with other legumes,vegetables, and fruit.

GANDULES INC.

Some like it hot and spicyGandules, leader incapsicums and pigeonpeas, had $34 million inturnover last year. Abountiful harvest, indeed

When people conjure up LatinAmerican alcoholic beveragesand cocktails, they generallyimagine caipirinhas, mojitos,tequila, rum, margaritas, anddaiquiris. Few people have hadthe pleasure of tasting pisco,Peru’s favorite tipple. This ischanging, however, as thecountry’s exports of thisbrandy-like drink to the restof the world rise. Originally distilled by Spanishsettlers in the mid-1500s as a lo-cal alternative to their belovedorujo from northern Spain, pis-co is today big business.According to ADEX (the as-sociation of Peruvian ex-porters), Peruvian pisco exportsgrew by 215% between 2003and 2009, earning $1.34 mil-

lion in revenues, and the firstquarter of 2010 saw an increaseof 67%. The main buyer is theUnited States, which spent$238,000 on pisco imports in2009. Chile is the secondbiggest importer, a testament tothe quality of Peruvian pisco, asChile is Peru’s biggest com-petitor in the production of thisliquor. Other major marketsfor this beverage includeColombia, Argentina, Japan,France, and Spain. Produced in Peru’s winemak-ing region, there are four lev-els of pisco: pure (made froma single variety of grape, gen-erally quebranta), aromatic (al-so made from just one kind ofgrape but in this case, a sweet-er one, such as Muscat), mosto

verde (distilled from partiallyfermented must), and achola-do (made from a blend of dif-ferent varieties of grape).Pisco, which varies between76º and 96º proof (as opposedto Chilean pisco, with an evenwider range: 60º-100º), can bedrunk straight up or on therocks, but nothing says Peruquite like a pisco sour. Cherished as the national cock-tail and a decidedly fun partof the Peruvian identity, a pis-co sour is concocted from pis-co, lemon or lime juice, eggwhites, sugar, and a touch ofbitters, all blended into a light-ly frothy drink and sometimessprinkled with cinnamon. Once the preferred drink ofsailors, Pisco’s popularity to-day spans all social classes, andmany bottles can even fetchupwards of $50.

PISCO

Message in a bottle: pisco exports are upExports of pisco are on the up and up, meaning morepeople around the world are enjoying Peru’s national liquor

JORGE GARCIA SEMINARIO, General Manager of P&D Andina

Before founding the companytheir son runs today, AngelAñaños Jeri’s parents workedin agriculture near Ayacucho,a provincial city with a popu-lation of just over 150,000. Theinternal conflicts and terror-ism of the 1980s that stalledprogress in the country alsocaused Mr. Añaños’family to lose every-thing. Forced to startover, they began againbut this time as entre-preneurs, opening intheir own backyard asmall soft drinks bot-tling company.

After 10 years of hardwork, they perseveredand moved to Lima.Over the following 10years, the Añaños Jerifamily business grew tosuch extent that the Aje-group is now present in20 countries, and isranked as Peru’s 12thmost global company.Moreover, in that spaceof time it has gone from beinga small enterprise with just 10employees to a multinationalwith nearly 15,000.

“We learned to competebased in the Andes and fromthere, we advanced from cityto city,” recalls Mr. Añaños,group CEO. “This taught us tovalue our capacity, and espe-cially our possibilities. Global-ization allowed us to first moveinto the Venezuelan market,and from there we moved in-to Mexico. Subsequently, wemoved into the Central Amer-ican market.”

Their expansion has notbeen limited to this continent,however; four years ago theAjegroup entered Thailand,and earlier this year, theybreached the markets of Viet-nam and Indonesia.

This growth, although a con-sequence of decades of dedi-cation, has been welcomed by

the company with open, andgrateful, arms. “We find our-selves in a very privileged sit-uation now,” observes Mr.Añaños. “Our presence in in-ternational markets affords usthe option and position forgrowth that we never couldhave imagined before.”

The CEO knows that thecompany’s success is due tohard work and self-confidence,values that the managementtries to instill in its workers inorder to further empower themand, of course, help grow thecompany. “I believe that peo-ple are capable of much morethan what they apparentlythink,” he says. “Through selfmotivation and self evaluation,we hope that our employeeswill have improved self confi-

dence, thus generatingan incredible powerand synergy, muchmore than they coulddream possible.”

This group effortcombined with a smartbusiness plan has cer-tainly paid off. Aje-group keeps costsdown by producing itsbeers and juices in fac-tories the companybuilds in each andevery country whereits products are pre-sent. In fact, in Mexi-co alone the companyhas six factories, giv-ing it a better marketpresence without the

hassle of long haul transport.And, given Mexico’s proxim-ity to the United States, Aje-group could potentially enterthis new market.

“We could consider a firststage of exporting to the U.S.market with our fruit juices,exotic Peruvian juices, or somekind of product made fromtropical or local fruit with amore natural added value,” hecomments. “However, to opennew markets, we should firstsettle in that country.”

Ajegroup is currently evalu-ating the possibility of issuingbonds in the U.S. as a way toraise foreign capital investment.“I think the American markethas a lot of potential and re-sources for this kind of initia-tive,” claims Mr. Añaños.

Apart from fruit juices, iso-tonic drinks, and bottled water,Ajegroup’s main strengths liein soft drinks and beer.

AJEGROUP

Business is bubbling forthis homegrown companyAn excellent example of international expansion andtriumph in the face of adversity, Ajegroup is thecompany behind some of Latin America’s mostrecognized beverage brands

GANDULES VARIEDPRODUCTS INCLUDEJALAPEÑOS, PEPPERS,OLIVES, BEANS,CHICK PEAS, CORN,LENTILS, BARLEY,BEETROOT, ANDPOTATOES

IN JUST 20 YEARS,THE AJEGROUPHAS GROWNFROM A 10-PERSON BACKYARDBOTTLINGCOMPANY TO A15,000-PERSONMULTINATIONALWITH OPERATIONSIN MORE THAN 20COUNTRIES

TODAY, THEAJEGROUP ISRANKED AS PERU’S12TH MOSTGLOBALCOMPANY, WITHLEADING BRANDSSUCH AS KOLAREAL ANDCERVEZA FRANCA

ANGEL AÑAÑOS JERI, CEO and Chairman of Ajegroup

Rajaz Pisco is a new brand, made by Jarsa S.A.C., that is already enjoying tremendous success. For more info: www.piscorajaz.com

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PERU


Coloring the worldnaturallyGlobenatural is one of Peru’s most important manufacturers of natural colorants forfoods, textiles, cosmetics, and more. It’s also a major vendor of natural legumes,seeds, nuts, and herbs

Although still a predominant-ly mining and fishing basedeconomy, Peru’s other sectorsare doing their part in bolster-ing GDP growth, and in doingso, are providing a more sus-tainable and diversified eco-nomic base.

While the mining sector isperforming well, the smaller,more specific sectors are do-ing exceptionally well. Textilesand agro-exports, despite a dipin productivity last year, aretoday no exception.

Globenatural is a mediumsized company that first be-gan producing natural color-ings for textiles, food,cosmetics, and pharmaceuti-cals in the 1970s, and later ex-panded into the export ofagricultural products. It shipsto more than 40 countries onsix continents.

Jose Fernando Muñiz, gen-eral manager at Globenatural,believes that it is businesseslike his that will lead futuregrowth for Peru. “In the min-ing sector, there are no newlarge markets to deal with. Oth-er sectors are going to gener-ate this dynamism, and one ofthese sectors is agro-exports,”he explains.

“In Peru, sectors like agro-ex-ports, textiles and crafts maybe small but they have the po-tential to be huge. One can be-gin to visualize these sectorscapturing new markets and be-ing the base of the restructur-ing of our GDP. We need tohave a slightly more balancedGDP at some point, not in fiveto 10 years, but maybe in 20years.”

Owing to the global trendtowards natural and healthyproducts, Globenatural’s po-tential for growth is huge. “Thishas generated a momentumand dynamism towards nat-

ural colorants that we’ve notseen in the past 20 years,”claims Mr. Muñiz.

Globenatural has developeddozens of specialized colorsfor foods in just the past year,and is currently developing 30more. It derives colors from avariety of natural sources, in-cluding cochineal (a small in-sect that feeds off cacti andcan be processed into

carmine), achiote seeds (fromwhich annatto comes ), purplecorn (which has the addedbonus of being high in an-tioxidants), red cabbage, andturmeric.

Last year, the EuropeanHealth Authority dictated thatfood companies are requiredto indicate on their packagingif they use artificial coloringsand that these may producecertain types of illnesses in chil-dren. This measure resulted inan important shift towards theuse of natural colorants.

From the manufacturing andcommercialization of naturalcolorings, Globenatural took

the next logical step into agro-exports when the opportuni-ty came knocking. “In some ofthe countries in which weworked they asked us if we ex-ported pulses. This made usthink about exploring the busi-ness of exporting agriculturalproducts,” explains the gener-al manager. “Our company hasdeveloped the ability to grouptogether supply and demand ofvarious agricultural productsquickly without owning land orbeing farmers.”

In this business model,Globenatural is a trader thatbuys and sells simultaneously,thus avoiding the negative ef-fects of rises and falls in prices.“In this case we do not sell ona futures market basis, but wedo everything possible to gen-erate business on the day in order to make the right cost-price match,” says Mr. Muñiz.

The first and only Peruviancompany in its sector to oper-ate under ISO 9001 QualityManagement, Globenaturalsupplies its market with puls-es and beans, olives, sweet cap-sicum, brazil nuts, giant andpurple corn, oregano, annattoseed, and quinoa.

Globenatural is a memberof Grupo Michell, a conglom-erate with more than 80 years’presence in the Peruvian tex-tile sector. Globenatural is re-searching new ways to addvalue to its products to remaincompetitive and to find evermore natural alternatives forartificial colors. The companyalso seeks a larger presence inthe U.S. Although presently itis the fifth destination forGlobenatural’s exports, Mr.Muñiz says, “The U.S. must bethe number one or numbertwo commercial partner as acountry, there is no doubtabout it.”

ON A WORLD SCALE,THERE HAS BEEN AMASSIVE MOVEMENTTOWARDS NATURALCOLORANTS, AS AHEALTHIER ANDNATURALALTERNATIVE TOARTIFICIAL ONES

GLOBENATURAL HASADOPTED THEBUSINESS MODEL OFBUYING ANDSELLINGSIMULTANEOUSLY INORDER TO AVOID THENEGATIVE EFFECTSOF FLUCTUATINGPRICES

INKA DESIGNS

Competitive and quick

CONSORCIO TEXTIL VIANNY

Quality-led success

Consorcio Textil Vianny wasfounded in 1994 by VictorGraus, who stresses that its suc-cess is thanks to an insistenceon quality and on meetingdeadlines – important factorsin an industry where low-costcompetition from China andother Asian countries is fierce.

A client in New York once ex-plained to Mr. Graus why hechose Vianny over cheaper sup-pliers in China. “He told methat the difference betweenChina and Peru is that, whenyou order from Peru, you knowthat the merchandise will bedelivered on time and it willmeet all the specified require-ments,” Mr. Graus recounts.“Another factor is that in Peru

we’re totally flexible about thedelivery and a re-order can bemade up to 20 days later.”

Right now the U.S. is the on-ly market that Vianny exportsto, but the company is broad-ening its horizons and looking

to enter new countries. Vian-ny has sent delegations to anumber of garment fairs in Eu-rope and has won orders fromcompanies in various countries.

Vianny insists on fair laborpractices and on training em-ployees to ensure high quality.Vianny helps its workers gainimportant work skills via cours-es in cooperation with the gov-ernment, the Chamber ofCommerce, and ADEX, andalso hires experienced work-ers directly to train employees.

“Regarding labor issues, wehave certifications from Searsand from Macy’s, among oth-ers,” Mr. Graus says. “We re-spect work schedules, we don’tforce people to work extrahours, and we hire workers whotake care of their families. Thisyear we’re changing our work-ing schedule so workers havemore time with their families.”

The companies that thrive inthe modern clothing marketare those that can get popu-lar items from the factory tothe stores’ shelves faster thantheir competitors. Inka De-signs prides itself on its abil-ity to beat rivals to the punchby getting orders to its clientsas quickly as possible.

Inka is a unit of cotton-yarnproducer Hialpesa Group,which means it can ensure itwill have the supplies it needswhen it needs them, and al-lows the company to cut vi-tal time from its productionprocess. Inka’s experiencedpersonnel also give the com-pany a competitive advan-tage, said general managerLuz Huarcaya Arias.

“One of our key points isthe confidence our clientshave in us, with my person-al experience of more than20 years of managing a vol-ume manufacturing opera-tion,” said Ms. Huarcaya.“That means we can guaran-tee the high quality and top-

notch finishing of a high vol-ume of products using vari-ous different types of fabricsand designs.”

Client confidence is evi-dent in Inka’s sales. The com-pany expects to export sevenmillion articles of clothes thisyear, made from various typesof cotton fabrics includingjersey, pique, French terry,rib, and others. The widerange of fabrics the compa-ny can produce makes it anideal partner for any clothingretailer.

Inka can make so many dif-ferent types of products be-cause of the expertise of itsstaff, who are mostly hiredfrom competitors. Anotheradvantage is Inka’s dedicationto investing in the latest tech-nology for its production line.The company is currentlyadding capacity with a newline of print equipment.

Inka Designs exportsmillions of quality garmetsto satisfied customers fasterthan the competition

A clothing manufacturerbased in Peru, ConsorcioTextil Vianny focuses ondelivering quality on time

VICTOR GRAUS, GM of Consorcio Textil Vianny

LUZ HUARCAYA ARIAS, General Manager of Inka Designs

MADE IN PERU

Peru’s economy hasbenefited greatly inrecent years from themacroeconomic sta-bility provided by the

continuity of policies from thegovernment. The signing oftrade agreements that have al-lowed the country’s exportersto increase sales have also beena big help, opening up new mar-kets, or allowing increased salesto traditional markets.

Peru’s textile companies havebeen quick to take advantage ofthe opportunities that havearisen in this new context, in-cluding easier access to bankfinancing for expansion. Theyare increasing sales in the U.S.,the European Union, and inmany of Peru’s neighbors inSouth America.

“The changes in trade poli-cy in Peru in the past severalyears have helped us enor-mously,” said Victor Graus, gen-eral manager of ConsorcioTextil Vianny, which sells cloth-ing to clients in the U.S. and hasrecently signed contracts withEuropean clients. “The differ-ent free trade pacts that Peru hassigned have permitted banksto give us long-term financing.”

Previous trade arrangementslasted for a period of four orfive years, making it difficult toget more financing after thethird year, because of uncer-tainty over whether the agree-ment would be renewed, Grausexplained.

Peru has trade agreementswith the U.S., Canada, the EU,

China, and Korea, among oth-ers. The U.S. has long been Pe-ru’s biggest export market, andclothing retailers in the world’ssecond-biggest economic areahave found much to like aboutthe Peruvian textile industry,said Luz Huarcaya Arias, gen-eral manager of Inka Designs,which works with companiessuch as Banana Republic.

“Prestigious U.S. clothingbrands are attracted to Peru-vian products because there’sno tariff, because our sector isvery vertically organized, be-cause of the high quality of ourproducts and of our cotton, andbecause of our geographicalproximity,” she said. “All thosethings make us very competi-tive.”

The recent economic crisis inthe U.S. put a dent in sales lastyear, leading to a drop in textileexports from the record level in2008. In 2010 exports are re-covering in most countries, withan increase of 13% in the firstfive months of the year, com-pared with the same period ayear ago. That figure excludessales to Venezuela, where re-strictions imposed this yearhave cut exports.

Peru’s textile companies havebeen very active in seeking outnew markets to help smoothout the ups and downs that canhappen in any market. The gov-ernment has sponsored par-ticipation in trade fairs aroundthe world, including one in theColombian city of Medellin inJuly and in Las Vegas in August. Peruvian textile exports soared 109% in the first half of 2010, a promising figure after 2009’s dip in industry revenues


PERU


Mandated to promote the development of Peru’s manu-facturing industries and theircompetitiveness, SNI is com-prised of more than one thou-sand member companies whoemploy 35% of the country’sworkforce. Here, Mr. Olaecheaspeaks on the need for infra-structure improvements in order to help boost the com-petitiveness of Peru’s manu-facturers in the open market.

OOvveerr tthhee llaasstt 2200 yyeeaarrss,, PPeerruu hhaassggoonnee ffrroomm bbeeiinngg aa nnaattiioonn wwiitthhsseerriioouuss eeccoonnoommiicc pprroobblleemmss ttoowwhhaatt iiss ttooddaayy,, aaccccoorrddiinngg ttoo tthheeIIMMFF,, tthhee ffaasstteesstt--ggrroowwiinngg eeccoonn--oommyy iinn LLaattiinn AAmmeerriiccaa.. WWhhaatt ddooyyoouu tthhiinnkk hhaavvee bbeeeenn tthhee kkeeyy ffaacc--ttoorrss bbeehhiinndd tthhiiss ssuucccceessss??

One of the fundamental fac-tors has been the establish-ment of key policies. Thelegislative framework in Peru,which dates back to 1983, isone that provides security forinvestment. Peru has begun tounderstand that the key to de-velopment is investment andnot public spending. To date,the macroeconomic environ-ment is positively oriented toward investment.

Peru is like a matrix, it hasnumerous problems, but hav-ing put this framework in placehas allowed it to take advan-

tage of a unique situation with-in global development. Weknow that we are a small coun-try and therefore we will notachieve development throughour domestic market butthrough managing to achievesurpluses that can generate

savings for the internal devel-opment of the country. What’smore, as we are a small coun-try, we have a small savingsrate, so attracting foreign in-vestment has become an es-sential element for long-termdevelopment.

TThhee PPeerruuvviiaann eeccoonnoommyy iiss eess--ttiimmaatteedd ttoo ggrrooww bbeettwweeeenn 55%%aanndd 66%% tthhiiss yyeeaarr.. WWhhaatt rroolleewwiillll tthhee iinndduussttrriiaall sseeccttoorr ppllaayyiinn tthhiiss ggrroowwtthh??

Unfortunately, our predic-tion was for 1% and for thegovernment it was 6%. Themain sectors that were inter-viewed were net exporters andwe are the sector that pro-duces value-added products,so there is a difference be-tween us and them.

If you look at last year’s fig-ures, we were the underper-formers. We warned theMinister but there are stillthose who believe that indus-trial policy does not exist. Wewant an industrial policy thatwill create the right environ-ment for us to be competitive.

We continue to feel that thesubject of infrastructure hasshown no improvement. If wehave a port that it takes us aweek to ship out of you losecompetitiveness, if the pa-perwork takes three weeks tocomplete, you lose competi-tiveness. I want the same op-timal conditions that areenjoyed in other countries; Ido not need subsidies or re-forms. I need an optimalworking environment, andthat is the responsibility ofthe state.

WWhhaatt aarree tthhee ssttrreennggtthhss ooff tthhee iinndduussttrriiaall sseeccttoorr??

The sector has grown on abase of distinct products, for ex-ample Peruvian cotton and themetal industry, which benefitsfrom the mining industry here.In construction there are severalindustries that have becomecompetitive for the very fact thatthey are industries that do nottravel, such as cement and steel.The open market has meantthat those industries that con-tinued to operate were definitelycompetitive, with good prod-ucts and good consumer offers.We have a number of advan-tages in light industry. Thetourism sector is also in infantstages. We receive less tourismthan Costa Rica, and it is a sec-tor that will have a knock-on ef-fect for us as product providers.

So, yes, industry is being cre-ated, but what is most importantis that, first of all, this industrygrows in a transparent and ef-fective manner, in good faith thateverybody is playing by the samerules. Secondly, what will makeindustry effective is infrastruc-ture, which will allow our prod-ucts to be more competitive. Peruhas the entire scope of minerals,so processing those minerals willbe cheaper for us, but we mustcreate the correct environmentand facilities so that can happen.

Covering nearly half a millionsquare miles and divided intothree distinct regions by SouthAmerica’s largest and highestmountain range, Peru’s geog-raphy can certainly complicateoverland travel. Oftentimes,companies must rely on alter-natives, namely air trans-portation.

Helicopteros del Sur, or He-lisur, is a Peruvian company thatprovides not just your ‘everyday’helicopter services; it also spe-cializes in carrying hazardousand precious cargo. Establishedin 1994, and recently purchasedby Russian giant UTair Avia-tion, Helisur leads the sectortoday in helicopter operationand maintenance, havingearned an excellent reputationfor its security, efficiency andservice quality. It has been in-volved in some of the most im-portant projects in mining,petroleum and infrastructuredevelopment.

Over the past 16 years, He-lisur has covered a wide vari-ety of needs: from transportinggold for mining companies andelectoral ballot boxes for theNational Electoral ProcessesOffice, to whisking tourists upto Machu Picchu, flying exec-utives over newly discoveredmining deposits, and rushingin air rescue and evacuationcrews. Aside from providingflight services for nearly all theoil companies that have oper-ated in Peru since 1994, He-lisur has also transportedNational Geographic filmteams to some of the country’smost inaccessible areas.

Helisur helicopters haveflown more than 75,000 hours,353,000 tons of cargo, and544,000 passengers since 1994.Exxon Mobil, Conoco Phillips,Repsol YPF, Hydro Quebec,Skanska, BHP Billiton, Shelland OXY are just a few exam-ples of world renowned com-panies that have entrustedHelisur with their air trans-portation needs.

Each and every one of He-lisur’s pilots undergoes a strictselection process and must

have completed a minimumof 3,000 flight hours; the aver-age experience of present flightcrews, however, exceeds 6,000flight hours, making themsome of the most experiencedcrews in Peru. On the mainte-nance side of the business, spe-cially trained personnel workalongside Russian experts toprovide the most efficient andcareful technical support pos-sible.

Recognized as the ‘Heli-copter Company of the Year’ in2009 at the ‘Wings of Russia’awards ceremony, UTair Avi-ation is a world leader in civilhelicopter operations. UTairhas over 40 years of experiencewith Mil helicopters of all class-es in different regions of theworld. A leading Russian heli-

copter company, UTair boastsa fleet of more than 200 heli-copters, including 24 Mil-26,the most heavy-lift helicoptersin the world.

The resources of the fleetand the expertise of UTair staffensure high quality and safetyof aviation works of the high-est complexity. In Russia UTairmainly performs helicopter op-erations in the oil and gas sec-tor. The United NationsOrganization is the largest cus-tomer of the company’s heli-copter services abroad. Today,over 90 helicopters of UTairAviation group are operating in16 countries around the world,including Peru.

Helisur with its strong so-cial commitment implementsvarious CSR projects in Peru.Such initiatives include pro-viding the children of the im-poverished Andean town ofHuataccocha, as well as sever-al of the most economically de-pressed towns of the Ayacuchoregion, with food in an effortto encourage their schooling.

Collaborating for greaterindustrial strengthPedro Olaechea is president of the National Society of Industries (SNI), one of Peru’s most influential bodies,representing 80% of the country’s industrial manufacturers

Helisur owns and operates a fleet of 11 MI-8MTV-1 helicopters, among others

HELISUR

The shortest pathbetween twopoints is Helisur

HELISUR IS ACONFIRMED ANDRELIABLE PARTNEROF OIL AND GASPROJECTS

Helisur, short for the Spanishtranslation of Helicopters ofthe South, has a fleet of aircraftperfectly adaptable to suit avariety of needs.

The company owns and op-erates a fleet of eleven MI-8MTV-1 helicopters as wellas two recently purchased MI-171s. The former has 24 fold-able cabin seats and a largerear clam-shell and sliding sidedoors, making it ideally suit-ed for various loads, not ex-cluding internal vehicle

transportation. It is alsoequipped with an external car-go slung that can carry a loadof up to 4,000 kilograms. Al-though the MI-171s can car-ry up to 22 passengerscomfortably, they can go intwo directions: they can alsobe equipped for VIP flights orto carry up to four tons in ex-ternal load.

Both models of aircraft areideal for dealing with Peru’sgeographical diversity: whilethey are adept at operating in

the high temperatures of theAmazon basin, they can alsonegotiate the rugged topog-raphy of the Andes.

Certified by Peru’s Gener-al Directorate of Civil Aero-nautics (DGAC) to carry out“aerial operations of externalcargo with helicopters” and“aerial operations of non-reg-ular air transportation of car-go and mail, special aerialtransportation,” Helisur placesa great amount of importanceon the maintenance of its fleet.

Helisur’s maintenance cen-ter, staffed by an internation-al crew of licensed mechanicsand avionics experts, is locat-ed adjacent to Lima’s JorgeChavez International Airport.Moreover, it is the only cen-ter in all of Latin America withMil Helicopter Plant certifi-cation, thus giving Helisur thecapacity to overhaul this typeof aircraft, including the MI-8MT, MI-17, MI-8MTV andMI-171-1V versions, amongothers.

Over the mountains and through the woods,Helisur’s fleet is fit for geographical challenges

PEDRO OLAECHEA, President of SNI


PERU


Minister of the EnvironmentAntonio Brack Egg speaksabout the government’s aim tobalance economically sustain-able growth and social equitywith the preservation of Peru’snatural resources and the pro-tection of the environment.

WWhhaatt iiss yyoouurr ccuurrrreenntt eevvaalluuaa--ttiioonn ooff hhooww tthhee MMiinniissttrryy iiss pprroo--ggrreessssiinngg??

The Ministry of the Envi-ronment has made a place foritself in the nation’s politics andthe national plan. It is a min-istry that has a very clear lead-ership and a strong presence.A series of regulations have al-ready been adopted that willhave a long-term influence.

We coordinate a great dealwith other sectors and min-istries, especially with the min-istries of housing, construction,and sanitation, which are di-rectly involved with water,sewage, and agriculture. Wealso work hand-in-hand withthe Ministry of transport, aswell as with energy and mines,to avoid any conflict.

Forward planning ahead hasgiven us good results. Over thepast two years, the Ministryhas managed to generate in-ternational support, invest-ments, and even loans to makethis happen. To date, we haveobtained $50 million for theconservation of the Amazonrainforest, which is a decisionthat was taken in 2008. Peru willconserve their Amazonianforests and will face the chal-lenge of generating wealth fromthem without burning any-thing – that is a radical change.

HHooww iiss tthhee MMiinniissttrryy iinnvvoollvveeddiinn bbiioo--ccoommmmeerrccee??

Peru is well suited to natur-al and organic products, whichare increasingly in demandaround the world today, espe-cially in Japan, the EuropeanUnion, Canada and in the U.S.It’s not worth our while to getinvolved with genetically mod-ified (GM) products. We arenot against GM produce; it’sjust that we work with ourwholly natural products, such

as purple corn, giant white cornfrom Urubamba, organic co-coa, organic coffee, camu ca-mu, etc. This great variety ofproducts gives us a competi-tive edge in the market.

The export of organic prod-ucts in Peru is growing steadi-ly year on year by about 15%.More than 30,000 small farm-ers here are dedicated to thisbusiness and are competitive-ly exporting to the world; weare the top country in the worldfor organic banana exports.

HHooww aarree yyoouu bbaallaanncciinngg eennvvii--rroonnmmeennttaall pprrootteeccttiioonn wwiitthh iinn--ccoommee ggeenneerraattiioonn??

In bio-commerce, you haveto look at various things. Forexample, ecotourism has beena way of keeping the Amazonrainforests alive, without de-stroying them or even harm-ing a bug. Dozens ofeco-tourism entrepreneurs arealready doing this in Madre deDios, Loreto, as well as in oth-er places in Peru, where wehave more than 65 eco-lodges,including the five best in theworld, and some of the nation’shotels have been rankedamong the best in the world.

Eco-tourism is growingtremendously, especially inMadre de Dios, which in 2000barely saw 10,000 tourists,whereas last year more than100,000 people came to see itsbiodiversity. So, protectingthese rainforests, with theirworld record levels of biodi-versity, is an absolute priority.

WWhhaatt iinntteerrnnaattiioonnaall ccoollllaabboorraa--ttiioonnss aarree bbeeiinngg ccaarrrriieedd oouutt??

We have had excellent rela-tions with the U.S. since thesigning of free trade agreement.Recently, while talking withour foreign minister, Secretaryof State Hilary Clinton com-mented that the U.S. lookedvery favorably on Peru be-coming a model country forenvironmental managementand social responsibility, basedon an FTA that truly showsthat FTAs are not only for com-mercial ends but also have oth-er purposes.

Generatingwealth andprotectingbiodiversityCreated just two years ago, the Ministry of Environmenthas already made its green mark on eco-business

ANTONIO BRACK EGG, Minister of Environment

THE BOOM HASJUST BEGUN

As Peru scrambles tomake up its shortfallin infrastructure, anelement that itsstrongly unified pri-

vate sector acknowledges as es-sential for the country’s furthergrowth, a range of sectors frommetal industries to constructionare set to benefit from a boomthat some industry leaders fearwill far outstrip supply.

Growth in the constructionsector is estimated at 14.4% thisyear. The Peruvian Chamber ofConstruction (Capeco) has saidthat the industry is planning tobuild 100,000 new residentialunits over a three-year period. Al-though significant, these effortsare still not expected to comeclose to the actual number ofnew homes that are needed.

Peru’s construction sectorended 2009 with expansion of5.2%, fueled by increased do-mestic consumption of cement,a sector that registered 12.5%growth last year. Public invest-ment in infrastructure alsospurred growth last year, and isjust a hint of things to come. TheMinister of Transportation andCommunications, EnriqueCornejo, affirms, “By the end ofPresident Garcia’s term, we’llhave intervened in nearly thetotality of the national road net-work.”

Consequently, constructionis gaining bulk with regards to itscontribution to the country’soverall gross domestic product,and is now a driving force in Pe-ru’s economic growth, and thistrend is not likely to end anytimesoon. The sector is expected toaverage 8.7% growth betweennow and 2013 due to the deficitin transport infrastructure suchas roads, bridges, ports and air-ports, the large housing shortagethroughout the country, and an-ticipated growth in the miningand energy sectors.

In addition to government-financed projects, private investment is a major factor inthis growth. It has returned witha vengeance, expected to jump17.5% this year alone.

The construction boom willobviously have a knock-on ef-fect throughout related indus-

tries such as building materialsand metal industries, and Peru-vian companies in these sectorsare gearing up for the increase inactivity. Indeed the entire ce-ment sector is planning invest-ment of over $1 billionthroughout the next three years.

Ricardo Briceño Villena of theNational Confederation of Pri-vate Business Institutions (CON-FIEP) comments, “Peru is goingto continue growing at a rate ofaround 6% driven by the samesectors that have brought aboutthe growth so far: mining, ener-gy, construction, tourism, agro-industry, and fishing. These arethe sectors that are leadinggrowth and they will continue todo so for some time given the re-sources we have in mining andenergy, plus the fact that tourism,construction, and more recent-ly agro-industry, have beenpulling this economy along.”

Last year was a busy one for Pe-ruvian engineering and con-struction company Haug. Inaddition to signing a $25 millioncontract for the construction ofan ethanol plant in Peru (in-cluding the design and con-struction of the electrictransmission and distributionsystem to connect the ethanolfacility to the national powergrid) with energy companyMaple, Haug landed a $60 mil-lion for work in the DominicanRepublic’s Pueblo Viejo mine,where the company has an-nounced it will establish a newschool to locally train 140welders and boilermakers.

Haug, which operates facili-ties in Callao and Lurin in Peruwhere it manufactures a widerange of steel and metal prod-ucts, opened a branch in theDominican Republic in 2008aimed at generating new busi-ness opportunities in CentralAmerica. With its new activities,

Haug, which turned 61 this year, is the first Peruvian company to obtain tri-ISO quality standards certification

HAUG

Engineering and building Peru

HUMBERTO PALMA VALDERRAMA, President of Haug

the company closed the yearwith close to $42 million in sales,a figure it expects to see rise to$60 million this year. Finally,Haug closed off 2009 with anaward from Peruvian PresidentAlan Garcia for the company’ssocial responsibility initiatives,an area to which Haug is strong-ly committed, and Haug was al-so chosen among 30 Peruviancompanies as ‘Best Place toWork’.

Haug president HumbertoPalma Valderrama says that thecountry’s infrastructure deficit,which the Minister of Trans-

port has estimated at $38 billion,has created an array of oppor-tunities in the country. He states,“There is a complete system ofcontracting in place, of em-ployment generation and im-plementation. Public Peruvianassociations, concessions, thepromotion of private sector ini-tiatives in all sectors – all of thesethings are opening a range ofpossibilities for the open andtransparent participation of theprivate sector with the publicsector so these projects, whichare so necessary for our coun-try, can be carried out.”

A shortage of transport infrastructure and housing will help maintain the construction sector aloft for years to come

ENRIQUE CORNEJO, Minister of Transportation &Communications

RICARDO BRICEÑO VILLENA, President of CONFIEP

THE CONSTRUCTIONSECTOR IS PROJECTEDTO GROW BY 8.7%BETWEEN NOW AND2013 DUE TO THEEXISTING DEFICITAND HIGH DEMAND

PERU’S HOUSINGDEFICIT IS HUGE,AND PLANS TO BUILD100,000 UNITS OVERTHREE YEARS WILLONLY MAKE A DENTIN IT


PERU


Although the origins ofMiyasato Corporation dateback to 1931, it wasn’t until1983 that Miyasato began toestablish itself as the multi-national industry leader it istoday. That year the compa-ny built its Lamitemp facto-ry, South America’s largestglass manufacturing plant, al-lowing it to expand both itsproduct range and geo-graphical reach.

Today, Miyasato is Peru’slargest manufacturer of glassand aluminum automotiveparts, building supplies, andcarpentry accessories. It hasdistribution centers through-out Peru and a business net-work throughout Central andSouth America. It is also a lead-ing supplier of glass parts forthe U.S. automotive industry.

Headed up today byfounder Kamekichi Miyasato’sgrandson, Enrique Miyasato,Miyasato Corp. is a diversi-fied conglomerate employingmore than a thousand work-ers at its factory in Lima. Mr.Miyasato says, “Over theyears, the company decidedto diversify, investing in tech-nology for the processing fac-tory and beginning tomanufacture glass productsfor buildings, automobiles, in-dustry in general, and for ap-pliances. We chose to put ourmoney on maintaining highlevels of quality standards and

began to certify our productsin world-class laboratories.Our strategy has always beento pursue aggressive diversi-fication in products for theconstruction sector or in theautomotive world. Later we al-so decided to expand ourportfolio with products forother sectors.”

Miyasato’s arrival on thescene in the U.S. was con-firmed when the companydesigned a competitive anti-hurricane glass for the Flori-da market. Its introduction inthe market coincided with theAmerican real estate boomand with Florida state’s build-ing code obligating the use ofthis type of anti-hurricaneglass. “This was the push thatwe needed to position our-selves as industry leaders,” saysMr. Miyasato.

MIYASATO CORPORATION

Certified, world-class buildingsuppliesWith a history of nearly 80 years, Miyasato hasestablished itself as a multinational industry leader

ENRIQUE MIYASATO, General Manager of Miyasato Corp.

“The construction sector hasbeen leading the country’s eco-nomic growth for a long timenow. It is a sector that gener-ates a tremendous multipliereffect in the economy, con-verting it into the engine thatpulls the others along. It is asector of rapid reaction, unlikeother sectors that take years toget the desired effects,” statesJuan Manuel Yoshikay Tomitaof Furukawa Corporation.

“The Peruvian Chamber ofConstruction are calling thisa construction boom, but wefeel the boom is yet to come.This is a country that needs150,000 housing units a yearto reach the level of our neigh-bors. We are way below it.”

The general manager feelsthat the growth of the Peruvianeconomy is due in large part

to the unity of the country’sprivate sector, and that thiswill help to ensure Peru’s fu-ture progress. He adds thatthere has been a beneficialswitch to a longer-term men-tality among the country’sbusiness leaders.

“I used to talk to entrepre-neurs and they would say theywanted to invest little, andmake a lot of money tomor-row. Now they say, ‘I am go-ing to invest a lot, I will earnsome back soon, and I will re-cover over the long term. I be-lieve that the vision is vastlydifferent and is what will allowus to make the country,” saysMr. Yoshikay.

One of Peru’s major manu-facturers of glass and extrud-ed aluminum products for theconstruction sector, Furukawa

is planning to celebrate its 60thanniversary this year by en-tering the U.S, where they planto target niche segments of theglass and aluminum markets.

With four different businesslines providing quality solu-tions for construction and dec-oration, Furukawa producesTemplex safety glass, CURVEX

architectural glass, INSULEXinsulating glass, and a widerange of glazing systems.

The company also manu-factures aluminum profilesfor windows and screens. Fu-rukawa is ISO 9000 certified,and currently exports toChile, Bolivia, Colombia,Ecuador, and Uruguay.

Already a huge sector, construction still has a lot of roomto grow, and Furukawa is feeding it with quality materials

FURUKAWA CORPORATION

The boom is yet to come

JUAN MANUEL YOSHIKAY TOMITA,General Manager of Furukawa Corp.

Founded in 2007, Lima-basedCaliza Cementos Inca (or In-ca Limestone Cement Com-pany) was established tosupply cement to the con-struction industry, a sectorwhich is still dynamic despitethe international crisis. In-deed, infrastructure develop-ment in the country hasobliged Caliza to seek newpartners in order to meet therise in demand.

A strict quality system andadvanced technology at thecompany’s plants throughoutthe country have proven keyto its success. Expansion plansare now underway that willincrease the plant’s capacityby 300%, and include a tech-nology upgrade to further im-prove productivity. Caliza

currently produces Type 1Portland cement, which dif-fers from other brands be-cause it represents superiorquality and boasts advantagessuch as improved plasticity,top quality finishes and tex-tures, and greater durability.

Caliza was the first cementcompany to open its doors inPeru in 22 years, promptingthe country’s President AlanGarcia to extend his person-al congratulations to theshareholders.

Caliza general managerCarlos Choy says that morethan $35 billion must be in-vested in Peru’s infrastructureover the next decade.

“Infrastructure is a basic el-ement, and the governmenthas felt it necessary to propel

development forward signif-icantly. After all, if we have in-adequate infrastructure, thecountry cannot possibly com-pete. Given that Peru occu-

pies the second to last positionin terms of infrastructure de-velopment, the potential forgrowth over the next 8 to 10years is huge,” he comments.

CALIZA CEMENTOS INCA

Cementing Peru’s futureInfrastructure development in Peru has obliged Caliza to seek new partners in order to meet the rise in demand

CARLOS CHOY, GM of Caliza Cementos Inca

Lima’s sleek, modern buildings are reshaping a skyline that is representative of the growth seen in recent years, especially in the construction sector

CALIZA CEMENTOSINCA PRODUCESTYPE 1 PORTLANDCEMENT WHICHREPRESENTSSUPERIOR QUALITYAND IMPROVEDPLASTICITY ANDDURABILITY

AS PERU LAGSBEHIND ININFRASTRUCTUREDEVELOPMENT,GROWTHPOTENTIAL IS HUGE

‘THIS IS ACOUNTRY THATNEEDS 150,000HOUSING UNITS AYEAR TO REACHTHE LEVEL OF OURNEIGHBORS. WEARE WAY BELOW IT’

FURUKAMA ISMAKING LONGTERM INVESTMENTSIN PERU WHILEEXPANDING INTOTHE U.S. MARKET,AS WELL

MIYASATO CORP. ISA LEADINGSUPPLIER OF GLASSPARTS FOR THEAUTOMOTIVEINDUSTRY IN THEUNITED STATES

THE COMPANY’SSTRATEGY HASALWAYS BEEN TO PURSUEAGGRESSIVEDIVERSIFICATION IN PRODUCTS


PERU


Since its establishment, Xs-trata Copper has gone on toinvest further: in 2006, it ac-quired the Tintaya mine alsoin the south, providing Xstra-ta with a significant platformto expand its mining activitiesin southern Peru, which todayrepresent over 2.1 billion tonsof mined copper per year.

Xstrata’s acquisition of Cana-dian Falconbridge in 2006 alsostrengthened their position inPeru, providing them with a33.7% share in the Antaminamine, the world’s third largestzinc and eighth largest coppermine, located in the Andesmountains in northern Peru.

“These investments werepossible thanks to the evolu-tion Peru has witnessed in twofundamental areas for in-vestors,” states Jose Marun,COO for Xstrata Copper. “Thefirst is the judicial and politicalstability that have been estab-lished here over the past 15years, during which time thedifferent governments wereaware of the importance ofmaintaining clear and stablegame rules. Peru has also man-aged to establish an economicstability that is related to its ju-dicial and political stability, andthis has translated into signifi-cant growth throughout thistime, even during the global fi-nancial crisis, when Peru main-tained positive growth rates in

comparison with other coun-tries in the region and the world.”

Since 2004, Xstrata Copperhas doubled its annual minedcopper production, jumpingfrom 10th to 4th in the ranksof world copper producers. Itis also one of the world’s largestproducers of smelter and re-fined copper.

In Peru, Xstrata Copper hascontributed to the develop-ment of the rural regions inwhich it operates through itsSocial Involvement Program,which aims to preserve thenatural and cultural heritageof the region while creatingconditions for sustainable de-velopment.

JOSE MARUN, Chief Operating Officer of Xstrata Copper

XSTRATA COPPER

Extracting Peru’s mineralwealthXstrata Copper established its presence in 2004 with significant investment in theLas Bambas copper district in southern Peru

Fumasa Iron and Steel Foundryhas been operating since 1965,gradually establishing itself asthe country’s main supplier ofcastings for the cement, auto-motive, mining, and agricul-tural industries, among others.Specializing in gray and nodu-lar cast iron, carbon steel, andstainless and heat resistant steelcasings, Fumasa’s strong repu-tation as a high quality providerhas been forged by its long trackrecord of on-time deliveriesand attention to service, in-cluding client product innova-tion, both at home and abroad.Today the internationally-cer-tified company exports to theU.S., Canada, Europe, andthroughout Latin America.

Harold Gardener Garcia, Fu-masa founder and president,

says his company is currentlybenefiting from growth dy-namics both at home andabroad. A boom in the con-struction sector is driving de-mand for Fumasa’s products in

Peru while the country’s freetrade agreements, in particu-lar with the U.S., is driving a risein the company’s exports.

Indeed, Fumasa’s growth isso rapid that it is having dif-ficulty getting started on itsnew offices. “The construc-tion sector is undergoing sig-nificant domestic growth.There are various multimil-lion dollar projects under way.With regards to the FTAs, Ihave always opened the doorto every country and it hasled me to develop a programof continuous expansion. Togive you an example, despitealready having the buildingplans for our new offices,there is no way I can’t stopwork on the plant so we canstart the construction.”

FUMASA

Driven by demand athome and abroadFumasa has forged a reputation as Peru’s reliable partner in construction, supplyingsteel and iron building materials for the booming domestic sector

HAROLD GARDENER GARCIA, Founder and President of Fumasa

PERU, A BONANZA FORMINING COMPANIES

Investment in the Peru-vian mining sector grewby 6.2% last year, ac-cording to the Ministerof Energy and Mines,

reaching a total of $2.7 billionand fueling speculation thata second boom had arrivedin the sector following that ofthe mid-1990s. Although themajority of this investmentwas destined for miningequipment, 2009 also saw a109% increase in investmentin mining exploration. TheMinister estimates that thesector will grow a further 7%this year.

Hans Flurry, president ofthe National Society for Min-ing, Petroleum and Energy(SNMPE), comments, “Sincethe 90s we have had a miningboom that has brought newinvestors and attracted themajor global mining compa-nies. Looking forward, we feelwe are preparing for a secondround, as a sector, as we arelooking at investment of up to$35 billion over the next fiveto seven years in new mines,expansion of existing ones,and new investment. This isall due to the fact that Peru hasa solid regulatory system andthe mechanisms for protec-tion, investment and mutualrespect are working.”

It is true that many ofworld’s largest mining com-panies, including BarrickGold, Newmont Mining,BHP Billiton, Xstrata, PanAmerican Silver, SouthernCopper, and Teck Resources,now have operations in Peruwhere they have used thecountry’s rich natural re-source base to build some ofthe largest and most success-ful mines on the planet. Theyhave helped Peru to becomethe world’s largest producer ofsilver, second largest produc-er of zinc, and third, fourth,and sixth largest producer oftin, lead, and gold, respec-tively. Peru has also nowpassed the U.S. as the world’ssecond largest producer ofcopper.

This year investment levelsare expected to rise further, up7% from last year and totalingapproximately $3 billion. Thecountry’s expected $35 bil-lion mining investment nowrepresents approximatelyone-quarter of Peru’s grossdomestic product (GDP),

making it the single most im-portant motor of the coun-try’s economy. Indeed, themining sector has outpacednational GDP over the last 15years and now accounts for60% of the country’s exports.The sector also generatesmore than 120,000 direct and400,000 indirect jobs in Peru.

“Mining is a key sector inPeru’s development becauseit generates the resources thatare necessary for growth: themoney the government needsto meet its constitutional

obligations in providinghealthcare, security and edu-cation,” Mr. Flurry observes.

“This is why I would like tosee these investments receivetheir permits and licenses asquickly as possible, withoutany hiccups, so that we canshow that mining is an activ-ity that can be carried out withrespect for the communityand with a commitment todo things the right way froman environmental point ofview, without having a nega-tive impact on the environ-

SEVERALMULTINATIONALMININGCOMPANIES HAVEBUILT SOME OFTHE LARGEST ANDMOSTSUCCESSFULMINES ON THEPLANET HERE INPERU

PERU IS THEWORLD’S LARGESTPRODUCER OFSILVER ANDRANKS SECONDIN COPPER ANDZINC. THECOUNTRY ALSOPRODUCESENORMOUSAMOUNTS OFZINC, TIN, LEAD,AND GOLD

ment where the activities arecarried out.”

The government is takingfurther steps to lend more va-lidity to the mining sector: Pe-ru is the sole Latin Americancountry to have applied formembership in the interna-tional Extractive IndustriesTransparency Initiative (EITI).If accepted, Peru would jointhe ranks of a select few coun-tries globally recognized fortheir transparency in the sec-tor and prudent use of natur-al resources.

Mr. Flurry points out thatall relevant Peruvian legisla-tion has been translated intoEnglish on the SNMPE web-site. SNMPE is Peru’s privatesector mining, petroleum,and energy trade association.Its members account for 91%of mining and metal produc-tion, 95% of petroleum out-put, and 90% of energygeneration in Peru.


PERU


Though not a global oil andgas behemoth, Peru definite-ly pulls its own weight in theregion. According to the U.S.Energy Information Admin-istration, the country ranksseventh in total oil productionas well as in dry natural gasproduction in South and Cen-tral America.

PeruPetro is the au-tonomous, state-owned com-pany established in 1993 topromote investment and mon-itor activities in mining andin the oil and gas industry.

On behalf of the govern-ment, the company sells thehydrocarbons from the fieldsunder contract through thirdparties, while monitoring allTechnical Evaluation Agree-ments.

To an audience of more than100 people involved in the oiland gas industry, on May 18 inHouston, Texas, PeruPetrokicked off the promotionalcampaign tour of the 2010 Bid-ding Round in which the Pe-ruvian company is offeringconcessions for 25 oil and gasexploration blocks. Othercities included on this tourwere London, Paris, Calgary,Cartagena de Indias, Perth andMelbourne.

So far, 22 of the world’s lead-ing companies – includingApache Hunt Oil, Repsol, To-tal, Suez and various Koreanfirms – have presented lettersof interest for these blocks,nearly all of which are locat-ed in Peru’s Amazon: 12 blocksare located in the MarañonBasin, eight are in the UcayaliBasin, three in Huallaga Basin,and one each in the SantiagoBasin and the Sechura Basin.The surface area of the explo-ration blocks range from80,000 hectares all the way upto 850,000 hectares.

Although the blocks are inwhat could be termed ‘sensi-tive’ areas, PeruPetro assuresthe local communities that na-tional parks, historical sanc-tuaries, and existing andproposed reserves for indige-

nous groups living in isolationwill be given preferential treat-ment.

PeruPetro managementhopes to see at least 30 oilcompanies participate in theselection process. The re-quirements for participants inthis bidding round are stricterthan those of the 2008 round,and the initial investmentsought is $1.25 billion. Thesize of the company, the shareof royalties, and the firm’s ex-perience in seismic studies andwell drilling will all be taken

into consideration when Pe-ruPetro finalizes the biddingprocess on September 24 thisyear and awards the conces-sions on October 14.

With these additional con-cessions, the government ofPeru hopes to pass the 100mark in terms of the licensingagreements currently in force.

Daniel Saba, president ofPeruPetro joins us to discussthe current state of Peru’s hy-drocarbons sector and the in-centives available to potentialinvestors.

CCuurrrreennttllyy,, tthheerree aarree 8899 llii--cceennssiinngg aaggrreeeemmeennttss iinn ffoorrccee,,ooff wwhhiicchh 1199 aarree iinn tthhee ooppeerraa--ttiioonnaall pphhaassee aanndd 7700 ssttiillll uunn--ddeerr eexxpplloorraattiioonn.. TThheessee ffiigguurreesssseett aa nneeww rreeccoorrdd ffoorr ooiill ccoonn--ttrraaccttss.. IInn yyoouurr ooppiinniioonn,, wwhhaattiiss tthhee ppootteennttiiaall ooff tthhee ooiill aannddggaass sseeccttoorr iinn PPeerruu rriigghhtt nnooww??

In terms of liquid hydro-carbons the production is low.In gas we have a more inter-esting position, but in liquidhydrocarbons we have ap-proximately 150,000 barrelsper day. Nevertheless, over the

next four years we will have aproduction of over 400,000barrels, representing a dra-matic increase and a figure notseen since the beginning ofthe oil activity during the mil-itary government of the 1970s.In gas we have the capacity forabout an estimated 50 tics ofwhich at least 22 or 25 have al-ready been discovered.

As for domestic consump-tion of gas, you have to take in-to account that Lima duringthe only winter reaches downto about 53º or 57º Fahrenheit.Normally this doesn’t requireheating in homes, and there-fore leaves electricity genera-tion as the biggest consumerof gas. But right now as a bigquantity of electric demandhas been satisfied, the gener-al interest is turning towardsthe hydroelectric plants be-cause Peru has a large hydropotential to generate electric-ity. That leads us to believethat Peru can be a major ex-porter of gas, without sacri-ficing any domestic market.

BBeettwweeeenn JJaannuuaarryy aanndd NNoo--vveemmbbeerr 22000099,, iinnvveessttmmeennttss iinneexxppllooiittaattiioonn aanndd eexxpplloorraattiioonnttoottaalleedd aapppprrooxxiimmaatteellyy $$779977mmiilllliioonn,, ooff wwhhiicchh $$336600 mmiilllliioonnccoorrrreessppoonndd ttoo eexxpplloorraattiioonn aanndd$$443377 mmiilllliioonn ttoo eexxppllooiittaattiioonn..CCaann yyoouu tteellll uuss wwhhaatt iinncceenn--ttiivveess tthheerree aarree wwiitthhiinn tthhee lleeggaallffrraammeewwoorrkk iinn PPeerruu ttoo aattttrraaccttffoorreeiiggnn iinnvveessttoorrss??

First of all, we have a contractcalled Law Contract, which isconstitutionally protected andcannot be amended by eitherparty unilaterally; the only wayto modify a Law Contract is ifboth parties agree. Peru hassigned, before and after thefree trade agreement, moreagreements that give securityto the investor so there can-not be expropriation or, if thereis, the compensation must behuge. I don’t think any gov-ernment would dare to ex-propriate anything except inreally dramatic cases. In thecontract, the investor bears the

risk but if he finds oil, it will be-long to him, and the prices pre-vailing in the market areinternational prices.

HHooww iiss tthhee ssyysstteemm ooff rrooyyaallttiieesswwoorrkkiinngg ttooddaayy??

In 2003 there was a decreeto fix the royalties in a rangethat went from 5% to 20%.Circumstances changed andthe price was what changedthe most.

We saw the need to modi-fy the royalties without chang-ing the legal framework. Weheld two competitions or twotender processes, one in 2007and another in 2008. The min-imum 5% royalty for theblocks listed has increased toapproximately 32% , and thiswas a result of sub bids in themarkets made by the verysame investors.

As a result, the 5% royaltyhas nearly disappeared and Ithink the current situation ismuch fairer because betweenwhat the investor receives, roy-alties and taxes paid, he gets50% and the nation 50%; I thinkit’s quite equitable and fair.

WWhhaatt mmeessssaaggee wwoouulldd yyoouu lliikkeettoo sseenndd ttoo oouurr rreeaaddeerrss wwiitthh rree--ssppeecctt ttoo iinnvveessttiinngg iinn PPeerruu??

That the two Latin Amer-ican countries that draw a lotof investment are Peru andColombia. In both countriesthere are stable policies whereno change or dramatic thingsare foreseen. I would say thatPeru is an ideal country to in-vest in at this time becausewhoever invests here, who-ever takes on a position here,will have a big future in termsof both the domestic marketand for exports. Peru is thecenter of South America andI believe that those who havethe vision to position them-selves here to make interna-tional operations will gain alot. There’s no need to waituntil the next government ad-ministration; this is an ongo-ing process that does not haveto stop.

A new era for Peruvian hydrocarbonsPeruPetro, Peru’s oil & gas resources managing company, has put up 25 blocks for exploration and production

PERUPETRO HASBEGUN THE TENDERPROCESS FORCONCESSIONS TO25 OIL AND GASBLOCKS, RANGINGFROM 80,000HA TO850,000HA

‘PERU HAS A LARGEHYDRO POTENTIALFOR ELECTRICITYGENERATION. THISLEADS US TO BELIEVETHAT PERU CAN BE AMAJOR GASEXPORTER’

‘PERU IS THE CENTEROF SOUTH AMERICAAND I BELIEVETHOSE WHO HAVETHE VISION TOPOSITIONTHEMSELVES HEREWILL GAIN A LOT’

DANIEL SABA, President of PeruPetro


PERU

A challenger in the 2006 gen-eral election and one of thefront-running candidates inthe 2011 presidential race, Ol-lanta Humala’s candidacy hasa fairer society for all at its core.

WWhhaatt mmeeaassuurreess wwoouulldd yyoouu lliikkeettoo sseeee iimmpplleemmeenntteedd iinn oorrddeerr ttooeerraaddiiccaattee ppoovveerrttyy??

One of the first things weneed to do is carry out a diag-nosis for Peru. The country ispresently anchored to a neo-colonial economic modelbased upon the export of rawmaterials. Peru derives its rev-enues from the taxes levied onraw material exports and thismodel is sustained by havingcheap labor. We need to changethis economic model in orderto regain ownership of our nat-ural resources, which are theprincipal axes of the nationaleconomy. Accordingly, we al-so need to provide a substan-tial impulse towards reformingour educational system. Weneed to encourage the devel-opment of national industryby drafting a construction andinfrastructure plan that avoidsinvestment being concentrat-ed only in the coastal region,so it is also in the mountainsand the jungle. There are manybusinesspeople who would liketo invest there, but the realityis that there is an evident lackof infrastructure in both re-gions. As a result, investments

in the interior of the countryare much more expensive thanin coastal areas.

WWhhaatt kkiinndd ooff pprroojjeeccttss aarree yyoouuppllaannnniinngg oonn pprroommoottiinngg dduurr--iinngg tthhee ccoouurrssee ooff yyoouurr eelleeccttoorraallccaammppaaiiggnn iinn oorrddeerr ttoo aaddddrreessssiissssuueess ooff ddoommeessttiicc aanndd ffoorreeiiggnniinnvveessttmmeenntt??

We must reduce the seriousdeficit of public infrastructure,which is estimated at over $30million. We believe in the pub-lic-private partnership formu-

la so that domestic or interna-tional capital can be utilizedon a large scale to contributeto the country’s development.In terms of investments, weare planning on strengtheningtwo concepts: a robust legalframework and social harmo-ny.

The first is closely related tothe legitimacy and seriousnessof the state. The presence ofcorruption in a governmentleads to the need to protect in-vestments. Investors oftenwant to recoup their capitalquickly and this often conflictswith worker’s rights. In thissense, we are proposing a se-rious government with stableand clearly established rules.

The concept of social har-mony is closely linked to thepresence of the state in all ar-eas of the country, not just thecoastal regions. A companycan lose millions of dollars dueto work stoppages arising fromthe unexpected closure of abridge or road. The fact that thestate is not present in the in-terior of the country entailsthat after the licensing phase,companies would have to un-dertake a second negotiationwith the communities livingin these areas. They requirethe construction of schools,provision of health care, or in-frastructure such as roads andbridges. In other words, inthese regions the private sec-

tor has to play the role of thestate all over Peru’s territory,proposing their participationin investment projects. Wewant the local communities tobe a part of these investmentsso they can see the utility andthe fruits of undertaking sus-tainable long-term invest-ments. In order to facilitatethese investments, we will pro-pose a series of requisites, suchas respect for the law and theenvironment, employmentgeneration, technology trans-fer and fiscal commitments.

WWhhaatt aarree ssoommee ooff tthhee ppootteenn--ttiiaall bbeenneeffiittss tthhaatt ffoorreeiiggnn ccoomm--ppaanniieess ccaann ffiinndd iinn PPeerruu??

We classify foreign compa-nies in terms of their behav-ior. If the company re-investsin Peru, it is acting like a nation-al company; however if it ex-ports capital and profits, thenit is acting solely as a foreigncompany. We believe that thegovernment needs to protectand incentivize companies that

are considered national entitiesthanks to their behavior. Thiswould imply that companiesdecide to re-invest in the coun-try.

Secondly, we are proposinga long-term project in orderto attract companies willing tomake serious investments, giv-ing them the opportunity foracceptable returns in line withinternational standards, with-out having any repercussionson their cost-control or work-er’s rights. We will work in or-der to ensure that companieswill find in Peru an attractiveinvestment climate, facilitat-ing infrastructure develop-ment in the interior of thecountry, and in so doing cancreate various industries in allareas of the country.

HHooww sshhoouulldd eennttrreepprreenneeuurriiaallaaccttiivviittyy bbee ffoosstteerreedd aanndd hhooww iisstthhee pprriivvaattee sseeccttoorr ssttrreennggtthheenn--iinngg tthhee ccoouunnttrryy??

This is a nation of entrepre-neurs, but not all entrepreneurs

are businessmen. I do not thinkthere is anybody in Peru whois against the business class,and there is a wealth of busi-ness opportunities, which thepolitical class has to capitalizeupon. We are in favor of a po-litical project that defends ournational interest and the lovefor our country.

Our goal is to work for thecountry’s development, careand protection.

Secondly, there has to be apolitical class that can inte-grate Peru into the ongoingprocess of globalization. Weneed to change the image of Pe-ru of being an exporter of rawmaterials and having a neo-colonial economic model, toone of being an industrializedcountry.

I believe in a state with aclear legal framework that canfacilitate investment in Peruand grant free access to tendersand public offers, without fa-voring the interests of one par-ticular group.


‘We need to change the image of Peru’Ollanta Humala, 2011 presidential candidate and leader of the opposition Peruvian Nationalist Party (Partido Nacionalista Peruano) outlines his vision for Peru

OLLANTA HUMALA, Leader of thePeruvian Nationalist Party (PNP)

NEW POLITICAL FORCES

On April 10, 2011,voters will taketo the polls inPeru’s next gen-eral election

that will determine the suc-cessor to President Alan Gar-cia, in addition to 130members of Congress and fivemembers of the Andean Par-liament. Under the currentconstitution, the president,who is the head of state andthe government, is elected foran interval of five years andcannot seek immediate re-election, and so must standdown for at least one full con-stitutional term.

Over the years, Peru has al-ternated between democra-cy and military dictatorship.For the past three decadesyears, however, it has re-mained a presidential repre-sentative democratic republicwith a competitive multi-par-ty system. President Garcia’sfirst presidential term was in1985-1990 and was succeed-ed by Alberto Fujimori, whoushered in a decade that sawa dramatic turnaround in theeconomy and significantprogress in curtailing guer-rilla activity.

Four contenders are leadingthe charge to replace the in-cumbent center-left APRA(Alianza Popular Revolu-cionaria Americana) nextApril. Congresswoman KeikoFujimori, daughter of formerPresident Fujimori, headsFuerza 2011 (Force 2011) andhas stipulated that she won’t

take Peru down a “radical”path that scares away invest-ment. In July, Miguel Palomi-no, head of the PeruvianInstitute of Economics, wasquoted by Bloomberg as say-ing: “There’s no doubt Keikowould pursue her father’spolicies to promote a freemarket.”

Mrs. Fujimori currentlytops the polls with fellow con-

tender and Mayor of LimaLuis Castañeda, who headsthe Solidaridad Nacional (Na-tional Solidarity) party. AnIpsos Apoyos poll in Augustputs both candidates neck-and-neck in first place with20% of those surveyed rank-ing them as favorites to be-come Peru’s next president.

The survey of 1,200 peoplein 16 Peruvian cities showed

former President AlejandroToledo with 14% support. Apolitician and economist, Mr.Toledo was president from2001-2006 and leads the Pe-ru Posible (Peru Possible)party.

The fourth of the front-run-ners is opposition politicianOllanta Humala of the Par-tido Nacionalista Peruano(Peruvian Nationalist Party),

who had 12% of the poll’s sup-port. A left-leaning national-ist , Mr. Humala lost toPresident Garcia in a run-offelection in 2006.

Recent research publishedby Peru’s daily El Comercioshows 64% of people can-vassed in Lima believe thenext president should besomeone coming from thebusiness sector. Conducted

by the Lima Chamber ofCommerce, the survey statesthat 69% of Limenians con-sider that business peopleshould participate actively inpolitics. Peru21 and SemanaEconomica have also report-ed that some 27% of the peo-ple surveyed remarked thatknowledge and expertise ofbusiness people would add tothe country’s development.

Leading the charge to become Peru’s new president next year, pictured above left to right, are Congresswoman Keiko Fujimori of Fuerza 2011,Lima’s Mayor Luis Castañeda of Solidaridad Nacional, and Alejandro Toledo of Peru Posible


PERU

Peru’s education sys-tem has made greatleaps forward in re-cent years thanks tothe hands-on policies

of President Alan Garcia’s gov-ernment. According to Jose An-tonio Chang Escobedo, Peru’sMinister of Education, this im-provement in education is anecessary step to ensure thatPeru’s current economic boomcontinues.

“This jump in the quality ofour education system will betranscendental in terms of Pe-ru’s ability to sustain itseconomic growth,” hesays.

For several decadesPeru had been suffer-ing from a crisis in chil-dren’s education,ranking last in the re-gion in tests of readingcomprehension andmathematical reason-ing. This is partly dueto the country’stremendous culturaldiversity, a direct con-sequence of its trickyorography.

“This triggered inthe public’s collectiveconsciousness a radicalchange,” the ministerexplains.

For this reason, atthe start of its currentmandate, PresidentGarcia’s governmentdecided to implement“drastic but indispens-able measures,” includ-ing a program of teacherassessment and training acrossthe public education system.Initially, 180,000 teachers wereassessed – their weaknessesidentified with the fundamen-tal aim to understand what waslacking in the teacher trainingcurriculums – and in the pastthree years, 160,000 teachershave been trained.

The government also intro-duced a scheme of perfor-mance-related pay to rewardthe best teachers. Happily, the8 million children in publicschools in Peru have alreadygained rewards from these boldmeasures. For example, com-prehension and math levelshave since jumped from 12%to close to 24%.

“The greatest satisfaction isto see how the level of stagna-tion in children’s education hasstarted to move significantly,”

says Mr. Chang. The measureshave gone hand-in-hand withother government actions toimprove education levels – suchas the fight against malnutri-tion and the incorporation oftechnology into classrooms.

Education in Peru is free andcompulsory during at least 11years for all Peruvian children.This presents certain challengesowing to the country’s vast cul-tural diversity and its 39 officiallanguages. “It is a complex task,”says Mr. Chang. For example,his ministry has translated all

school textbooks, so that achild’s education always beginsin their native language wherepossible. In addition, the 16,000small, one-teacher schools inmountainous rural Peru havebenefited from the One Lap-top Per Child project, and fromeducational programs on satel-lite TV.

At the other end of the scale,Peru’s university system goesfrom strength to strength. Pe-ru has three types of universi-ty: public, private nonprofit andprivate for-profit. Around 15

years ago, the gov-ernment approved alaw permitting in-vestment in educa-tion for profit. Thisled to an abundanceof universities allover Peru, whichbegged the govern-ment to establish theNational System forEvaluation, Accred-itation, and Certifi-cation of HigherEducation. This sys-tem standardizes theminimum level re-quired for an insti-tution in Peru toofficially be called auniversity.

Furthermore, Pe-ru’s universities arebecoming more in-ternational. Thesigning of free tradeagreements has ben-efited universities bymaking it easier to

transfer and share knowledge.Peru’s most prestigious and in-novative universities such asUniversidad del Pacifico andESAN (Graduate School ofBusiness) are gaining in renownon the world stage.

Finally, the National Litera-cy Program is ensuring that Pe-ruvians aged between 15 and 70are getting a second chance toreceive a quality education. Pe-ru used to have two million il-literate people but 1.2 millionof them have now learned toread and write through this pro-gram.

Thanks to the constant im-provement of Peru’s educationsystem, its public and privateinstitutions are now developingthe tools to create the country’sbusiness and political leadersof tomorrow, and to make themost of Peru’s most importantresource: its people.


Universidad del Pacifico is aprivate, independent univer-sity in Lima which specializesin economics, accountancy,and business administration.It also offers courses in lawand business engineeringand has a renowned gradu-ate school.

The university’s vision isto contribute to economicdevelopment and social wel-fare in an increasingly inter-connected world. With thisin mind, Universidad delPacifico (UP) has been fos-tering international cooper-ation ever since its inceptionin 1962.

“We have signed morethan 70 agreements withprestigious universities inover 30 countries around theworld,” says Professor FelipePortocarrero Suarez, deanof UP. “We offer our studentsthe possibility of spending asemester at a foreign univer-sity. We want them to inter-act with students from othercultures and to enrich them-selves professionally andpersonally.”

In addition, UP has a long-standing emphasis on envi-ronmental sustainability andsocial responsibility.

“Being part of the networkof Jesuit universities in LatinAmerica, UP is keen that thehumanist education that weimpart in our classrooms al-lows our students to becomenot only highly competentacademically, but also ethi-cal, cultured and sensitivepeople,” says Prof. Portocar-rero. “This educational phi-losophy is summarized inthe idea of ‘training respon-sible leaders for the world’,which is the essence of ourteaching strategy.”

Moreover, Universidaddel Pacifico was the first uni-versity to implement and de-velop the concept ofCorporate Social Responsi-bility in Peru. “We have beenworking in this field for more

than 15 years,” Prof. Porto-carrero explains. “Our busi-ness administration degreecurrently includes courseson the strategic manage-ment of social responsibili-ty and inclusive businesses.In addition, we are the onlyPeruvian university in theSocial Enterprise Knowl-edge Network (SEKN),which unites the ten bestbusiness schools in LatinAmerica and benefits fromthe participation of HarvardBusiness School.”

In 2012 Universidad delPacifico will celebrate its50th anniversary with theopening of a new five-floorhigh-tech study center andthe launch of two new de-gree programs.

UNIVERSIDAD DEL PACIFICO

The university thatdefined CSR in PeruUniversidad del Pacifico, aJesuit school specialized inbusiness and economics, isthe sole Peruvian universityin the Social EnterpriseKnowledge Network

PROF. FELIPE PORTOCARRERO SUAREZ, Dean of Universidad del Pacifico

ESAN University in Li-ma, Peru, became thefirst ever graduate busi-ness administration institution in the Span-ish-speaking worldwhen it opened in 1963.The school was createdfollowing an agreementbetween the U.S. andPeruvian governmentsand was set up by Stan-ford University.

ESAN was soon themodel for businessschools in Latin Amer-ica and 47 years later itis still one of the lead-ing business schools inthe region. ESAN offi-cially became a univer-sity in 2003. It now hasmore than 600 MBAstudents plus over 2,000students in 13 differentMasters of Science.

Dr. Jorge Talavera was deanof ESAN University from1984 to 1990 and then re-turned as dean in 2006. Hebelieves that ESAN could bean excellent choice for stu-dents from the U.S. who areplanning to do an MBA orMaster of Science.

“We offer a dual MBA,which is taught in English.ESAN is attractive becausewe have good programs,competitive prices, and 12master’s degrees with the op-

tion of double grade, whichmeans the degrees are rec-ognized in the U.S. The costof master’s degrees is muchlower in Latin America thanin North America or Europe.

“An excellent opportunityfor American students to getto know ESAN and the realPeru is our InternationalWeek. This happens twice ayear in January and July and

gathers together over25 international teach-ers from the world’sbest business schoolswho come to our cam-pus to give intensiveclasses for a week tomore than 800 stu-dents from ESAN’s different master’s pro-grams. Every year wealso receive foreignstudents who come toLima to take advantageof this world-class aca-demic opportunity. Atthe same time they getto know the social andeconomical reality ofPeru.”

Dr. Talavera notesthat Peru has trans-formed itself over thelast 20 years into a sta-ble, healthy, moderneconomy.

“Last year was the first timethat I have heard of Europehaving high unemploymentand a financial crisis, and yetPeru was hardly affected. Wehave learnt to manage our-selves in periods of crisis. Peru has now achieved a cer-tain economic and social sta-bility.”

ESAN is a private Peruviannon-profit institution withan international reach. It isacademically and profession-ally independent.

ESAN UNIVERSITY

A model for LatinAmerican business schoolsOriginally a business-centered institution of learning, ESAN University received universitystatus seven years ago and remains an example to be followed by other regional schools

DR. JORGE TALAVERA, Dean of ESAN University

RAISING THE STANDARDOF EDUCATION

Peruvian universities are gaining in renown on the world stage and becoming increasingly more international

A NEW NATIONALSYSTEM FOR HIGHEREDUCATION HASHELPED TOSTANDARDIZEMINIMUM LEVELSREQUIRED FOR APERUVIANINSTITUTION TO BEOFFICIALLY CALLEDA UNIVERSITY

PERUVIANSBETWEEN THE AGES OF 15 AND 70ARE BEING GIVEN ASECOND CHANCETO RECEIVE AQUALITYEDUCATION, ANDAS A RESULT,LITERACY IS ON THE RISE

JOSE ANTONIO CHANG ESCOBEDO, Minister of Education

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MEDICAL TOURISTSCAN TAKEADVANTAGE OFHEALTH SERVICES ANDTREATMENTSPERFORMED BY U.S.-TRAINED ANDCERTIFIED MEDICALPROFESSIONALS ATJUST A FRACTION OFTHE NORTHAMERICAN COST

PRIVATE HOSPITALSAND CLINICS ARETECHNOLOGICALLYAND PROFESSIONALLYPREPARED TO MEETTHE MEDICAL NEEDSOF INTERNATIONALPATIENTS

As medical tourism develops asa global industry, and becomesa more mainstream option forthose seeking high quality butaffordable care, the accompa-nying need for service-relatedproviders is also growing.

Vive Salud is at the forefrontof this trend. An initiative of theAssociation of Peruvian Ex-porters of Health Tourism(APETS), which unites the coun-try’s leading health clinics andhealthcare providers, Vive Saludaims to provide a complete pack-age that in addition to guidingclients through their healthcareoptions and experience, alsoprovides opportunities for culi-nary tourism, an experience tai-lor made for each individual.

Vive Salud offers a completeand personal package centeredon the highest levels of serviceto the client. From picking upclients at the airport and pre-and post-operation attention, totour guides and private nursecare, Vive Salud manages all as-pects of the visitor’s stay. Con-sequently, in addition to enjoyingtop quality healthcare at afford-

able prices, clients can also par-take of the many delights that Pe-ru has to offer as a touristdestination as well as its nation-al gastronomy. Vive Salud’s per-sonal chefs prepare typicalPeruvian dishes in accordancewith the medical instructions ofeach client.

A client intending to haveporcelain veneers placed can ar-rive, have measurements takenat the orthodontist, and thenleave to travel to different touristdestinations throughout Peruwhile the veneers are being pre-pared. Patients who receivedfertility assistance, for example,are provided with comfortableand discreet accommodationsso they can enjoy optimum tran-quility to ensure their treatment’ssuccess. Travel costs in additionto food, accommodation andmedical attention are all includ-ed in one package price.

At the end of the day, how-ever, the most important aspectis quality care, and Vive Saludoffers a solid and wide-rangingnetwork of excellent healthcareoptions. Vive Salud clinics offer

top of the line technology, com-fortable facilities, quality treat-ment and personalizedattention. All Vive Salud med-ical services have been award-ed the international qualitycertification, ISO 9001:2000.

Associated clinics for plasticsurgery include ClinicaMichaud, directed by Dr. JeanPierre Michaud, and Clinica Bis-bal Plastic directed by Dr. JorgeBisbal Smith. Both clinics boastthe latest in laser surgery, whichresults in shorter recovery pe-riods and better patient results.Vive Salud’s offer also includesthe Centro Oftalmologico Mac-

ula D&T, directed by Dr. SilvioLujan. Again, this clinic uses on-ly the latest generation technol-ogy. For those suffering fromsevere eye disease, this clinichas recently acquired the onlySpectralis HRA + OCT Bluelaser autofluorescence scanequipment in Peru, which al-lows for a high level of preci-sion in the diagnosis of complexvision pathologies.

In the field of bariatric surgery,Dr. Adolfo Guevara performssignificant interventions suchas the duodenal switch and gas-tric by-pass. His clinic is nowalso performing laparoscopicsleeve gastrectomy, which hasallowed for a weight loss of upto 220 pounds in some cases.

Vive Salud is directed by AdelaHerrera, who personally collectsclients herself from the airport.She is experienced in helpingclients decide what medicaltreatment best suits their needs,assisting in their experience inPeru from the beginning untilthe end of their stay. In this way,Vive Salud is working to fulfill itsmandate of providing a better,safer, and healthier medicaltourism experience for interna-tional visitors in Peru.

From the moment a patient’s plane lands, till the last dayof the trip, Vive Salud provides personalized attention

ADELA HERRERA, Project Manager at Vive Salud

VIVE SALUD

Health and care, from start to finish

Clinica Ricardo Palma’s staff of350 doctors all possess spe-cialist degrees that have beenduly accredited by national orforeign universities as well asby Peru’s medical board. Ap-proximately one-third havebeen educated abroad, name-ly in the U.S., and nearly two-thirds are university professorsactively involved in teachingor research.

“Any patient treated in ourclinic can rest assured that heor she is in the hands of high-ly qualified medical staff,” ex-plains Dr. Cesar Villaran,executive president of Clin-ica Ricardo Palma.

The hospital’s fortes areplastic surgery, dentistry, andophthalmology, as well asregular check-ups. “An insti-tution like ours excels atmedical check-ups becausewe have all the necessarytechnology, such as tomo-graphs, MRI scanners, 4D

ultrasound scanners, diges-tive endoscopies, and clini-cal analyses, all handled byprofessionals who, for themost part, have been trainedin the United States and holdthe appropriate certification,”says Dr. Villaran.

“A comprehensive medicalcheck-up with us only takesup about a half a day of atourist’s vacation, and is doc-umented with x-rays and re-sults that the patient can thentake back to his or her doc-tor in the States, or any oth-er country,” he adds.

Founded in 1975,Clinica Ricardo Palmaoffers highlyprofessional medicalattention at a veryaffordable cost

DR. CESAR VILLARAN, Executive President of Clinica Ricardo Palma

CLINICA RICARDO PALMA

Friendly check-ups

Historically fa-mous as the landof the Incas andMachu Pichu,and gaining an

international reputation for itshigh-quality agricultural, tex-tile, and mineral exports, Pe-ru has yet another sector tomarket abroad: health.

Currently, the contributionof the health sector is small, atjust 5% of the GDP, comparedto other Latin American coun-tries where the sector lendsbetween 7% and 8%. This rep-resents a tremendous oppor-

tunity for growth from a busi-ness perspective.

Moreover, the governmentis taking steps to ensure greaterhealth coverage in a systemwhere healthcare is still sub-sidized for the poor, and pri-vate for the wealthy. TheMinistry of Health is imple-menting the recently approvedlaw for ‘Universal Health Cov-erage’. Considered one of themost momentous changes inthis sector in the past fewdecades, the law mandates thatall citizens have health insur-ance that covers the most im-

portant illnesses. The state willsubsidize this insurance poli-cy in its entirety for the need-iest, and partially for peoplewith low incomes.

As it currently stands, thesocial security system, intowhich some 8 or 9 million peo-ple pay, obliges all people ac-tively working in companiesto contribute to healthcare.For the poorest classes, theMinistry of Health providessemi-subsidized care throughpublic hospitals. On the up-per end, healthcare at privateclinics and hospitals is paid

generally through private in-surance plans, which to datehave captured about 3% of thepopulation – another figurethat presents excellent oppor-tunities for growth.

It is precisely these privateclinics and hospitals that Pe-ru is advertising beyond itsborders. Many have beenfounded by and/or for foreign-ers. Clinica Anglo Americana,for example, was establishedby British and American ex-pats attend to the health needsof the English speaking pop-ulation in the early 1900s.

Other clinics and hospitals,such as Clinica Ricardo Palmaand Grupo Pranor, employU.S.-educated staff with in-ternationally recognized cer-tifications and have a largeclientele from abroad. ViveSalud, on the other hand, isan association that lends ad-visory services to medicaltourists and connects themain healthcare institutionsof different specialties.

Peru’s health services sectoris gaining a reputation abroad,especially in the United States,as a high-quality, reliable andaffordable alternative to health-care at home, and more andmore people are choosing Pe-ru to combine an exotic vaca-tion with a medical procedure.Even taking into account air-fare, a patient taking a trip toPeru for medical treatment stillsaves money, and enjoys theadded bonus of visiting one ofSouth America’s safest andmost exciting and beautifulcountries.

“At this stage, aestheticsurgery, odontology, and oph-thalmology are perhaps the ar-eas with the most potentialand attraction for medicaltourism,” comments Dr. Ce-sar Villaran of Clinica Ricar-do Palma. A procedure ofthese kinds could set patientsback thousands of dollars inthe U.S., but in Peru they areoften just a fraction of the costand offer the same – if not su-perior – quality.

Private health institutions,several of which have alreadybegun negotiating agreementswith U.S. and other foreignhealth insurance companies,are more than prepared to re-ceive North American patientsand consistently invest in im-porting the most up-to-datetechnologies.

“The Clinica Anglo Amer-icana is the first health clinicin South America to use cialiticlamps,” says Gonzalo Garrido-Lecca, general manager. “Re-cently a reconstructivesurgeon who works in Swe-den and Australia visited usand was pleasantly surprisedto see this technology andequipment our hospital has.”

Dr. Luis Noriega Hoces fromGrupo Pranor explains thatthe technology his clinics useallow them “to be ranked onpar with the best centers inthe world and offer the patienta happy ending.” He also claimsthat the Peruvian governmenthas played an important partin spurring greater technolog-ical development in the healthsector.

“Peru’s sustained econom-ic growth has allowed us tobe a market for the technolo-gy that American companieshave to offer, thereby benefit-ing our sector, since 10% ofour patients are foreign. Herein Peru, we’ve also been ableto develop our own technol-ogy, allowing us to competewith other countries,” says Dr.Noriega.

Still relatively undiscovered,Peru is home to the awe-in-spiring lost Inca city of MachuPicchu, Lake Titicaca – theworld’s highest navigable lake– and the baffling Nazca Lines,whose animal figures they por-tray can only be seen from theair. Combining world-classmedical treatment with a va-cation here, visitors can enjoythe country’s natural and man-made wonders, the wonder-ful gastronomy made from thefreshest of produce andseafood, the mild weather (ide-al for fast recuperation), ex-cellent shopping, and a warmand welcoming population.Private clinics in Peru boast well-trained physicians, often U.S.-educated, and the latest in medical technology

IT’S AHEALTHYHOLIDAY IN PERU P

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and the Amazon jungle,which covers almost 60% ofthe country and still containsundiscovered tribes. Thecountry is also an unsur-passed cultural destinationfeaturing archeological sitesand attractions drawn fromInca and Pre-Inca civiliza-tions. Peru’s highlight is un-doubtedly Machu Picchu, thelost city of the Incas, and ar-guably the most spectacularof the New Seven Wondersof the World.

Machu Picchu and the In-ca Trail reopened to touristson April 1st this year, after itsfamous walking trail and rail-way had been badly damagedby heavy rains in January.There were a number of mis-conceptions about what hadhappened. People thoughtthat rains had flooded thecitadel of Machu Picchu.Confusingly, they had actual-ly hit the nearby village ofMachu Picchu, formerlyknown as Aguas Calientes.

“Machu Picchu was neveraffected by the natural disas-ter,” explains Peru’s Ministerof Foreign Trade and Tourism,Martin Perez Monteverde.“The Incas were wiser thanus, they knew about rains andlived with rains longer thanus, and the whole waterdrainage system of MachuPicchu is spectacular.”

Following the heavy rains(“the worst in the area in 60years”), Mr. Perez himself wasresponsible for the evacua-tion of 4,000 people fromMachu Picchu village – hesays it was “a demanding andtroubling task”, but it was asuccessful one as no evacueeswere injured. He is now keento reassure the world thatMachu Picchu is again com-pletely safe to visit.

“Machu Picchu is perfect,intact, and as beautiful as everand I invite all readers of USAToday to come as soon as pos-sible and take advantage ofthe amazing deals, such as $49flights from Lima to Cuzco,”he says. “Machu Picchu is un-affected, it opened April 1st,so all the people living in theUnited States, come over!”

The Ministry promotes therich cultural history of loca-tions such as Machu Picchuaround the world using theslogan “Peru. Live the Legend”.In addition to attracting visi-tors to Peru’s historic sites, theMinistry now wants to focus

more on Peru’s other assets. Itis following a strategic plan todevelop new tourist destina-tions around Peru.

“We have prioritized a to-tal of 17 destinations, whichin my opinion is a lot,” saysMr. Perez. “You have to recog-nize that Peru has a vast rangeof areas to develop. In Peru,when you lift up a rock youfind history! That is good butit can be distracting.” As theminister says, “The main ob-jective is to make tourism asustainable industry.” Thismeans the responsible use ofresources, improving the qual-ity of life of local communitiesand strengthening social, cul-tural, environmental, and eco-nomic development.

Just last month, the govern-ment of President Garcia an-nounced a $163 millioninvestment in six tourist des-tinations in Peru, includinglocations in the less travelednorth of the country. The gov-ernment has recognized thatPeru has huge untapped po-tential for tourism and for thisreason it is promoting areassuch as gastronomic tourismand ecotourism. Peru’s won-derful cuisine was once fairlyunknown on the world stagebut is now increasingly a rea-son for travel. “Some 42% ofpeople who come to Peru haveconsidered food as a factor intheir decision to visit,” explainsMr. Perez. “We are in a processof internationalization of ourcuisine but also of the devel-opment of domestic cuisine,with ‘Peru, Mucho Gusto’, aseason of food festivals.”

Meanwhile, Peru has a greatdiversity of ecosystems in-cluding 84 of the planet’s 114life zones. There is a remark-able variety of flora and fau-na with over 1,730 birdspecies, 330 species of am-phibians, 462 species of mam-mals, and over 25,000 plantspecies. And a growing num-ber of companies now offertours and hotels in the rain-forest or among Peru’s tradi-tional rural communities.

Exciting homegrown com-panies are abundant in Peru’stourism sector, not least inthe hotel industry. The ho-tels of Casa Andina are in-spired by Peru’s uniqueregional flavors and incorpo-rate authentic local elementsin all areas of the visitor’s ex-perience. The Casa Andinagroup boasts a portfolio of

18 quality hotels located inthe nine most important des-tinations of Peru’s popularsouthern zone. Casa Andinaoffers two distinct brands ofhotel: its Classic range ofcomfortable hotels in centrallocations; and its Private Col-lection range of spectacularhotels in equally spectacularlocations.

Inkaterra has been one ofPeru’s leading ecotourismcompanies since it was found-ed 35 years ago by JoseKoechlin von Stein. In thistime, Inkaterra has become abyword for sustainabletourism and conservation. Itsthree flagship luxury hotelsare Inkaterra Machu Picchuin the heart of the Andes,Inkaterra La Casona in thecenter of Cuzco, and Reser-va Amazonica, on the banksof the Madre de Dios River inthe Amazonian rainforest. Inaddition, the company hostsmore than 65,000 travelersevery year on nature excur-sions in Peru.

In the early 1900s, foreignersflocked to Peru when the coun-try’s natural resources were putup for exploitation. French, Ital-ian, British, and U.S. managersand directors landed in Limaadding a cosmopolitan twistto this coastal city. A conse-quence of this influx of people– few of whom spoke Spanish– was a need for health centersdedicated to serving expats.Thus was born the BritishAmerican Hospital (today,known as Clinica Anglo Amer-icana), an English-speakinghealth clinic where the Britsand Americans could enjoy the same superior qualityhealthcare they did back home.

This tradition of excellencehas lasted over the hospital’snearly 100-year long history.According to Gonzalo Garri-do-Lecca, general manager,workers from the U.S., U.K.,and Canadian embassies allfrequent Clinica Anglo Amer-icana because “they’re awareof the magnificent experienceand foreign expertise we boast

owing to our history.” Manyother foreign patients visit thehospital on the recommenda-tion of their respective em-bassies, as well.

Clinica Anglo Americana’sreputation has traveled far andwide, thanks to satisfied pa-tients and visiting doctors. “Peruvian doctors abroad fre-quently recommend ClinicaAnglo Americana,” explainsMr. Garrido-Lecca, “becausethey have seen for themselvesthat it is on par with the qual-ity in the U.S., but less expen-sive.”

The longest standing andleading medical institution inPeru today, Clinica AngloAmericana’s standards are atinternational levels and itstechnology is the most up-to-date in the entire region. TheA to Z of its top-notch spe-cialties run the gamut fromclinical immunology, cardiol-ogy, and urology, all the waythrough orthopedic, oncolog-ical, obesity treatment, andplastic surgery.

Since 1915, expats and visitors have found qualityattention from Peru’s longest-standing medical institution

GONZALO GARRIDO-LECCA, General Manager of Clinica Anglo Americana

CLINICA ANGLO AMERICANA

Your hospitalaway from home

Formerly, Peru was years be-hind in medical advances. Forexample, England’s first test-tube baby was born in 1978;in Peru, the Pranor Group ofReproductive Assistanceachieved it 11 years later. To-day, however, Peru, and thePranor Group, have caughtup and now work on par withthe most technologically de-veloped countries.

“We do everything fromintrauterine insemination tomore complex procedures,such as in vitro, ICSI, PICSI,egg and sperm banks, andpre-implantation genetic di-agnosis, among others,” ex-plains Dr. Luis Noriega Hoces,Pranor’s executive director.

About 10% of Pranor pa-tients hail from abroad,namely the U.S., Chile,Ecuador, and Europe. Thebiggest advantage the clin-ic offers them is guaranteedequal, if not better, resultsat a much lower cost than inother countries. In addition,Pranor has a network of cen-ters abroad that can followup on patients once they’vereturned to their homecountries.

Pranor and its two maincenters, Clinica Concebir andthe Gynecological and Re-production Institute, areISO:9001 and CLIA certified.

“We collaborate with U.S.companies and have at ourdisposal the best profession-als in this field,” claims Dr.Noriega. “We’re getting clos-er and closer to achieving to-tal solutions to infertility.”

DR. LUIS NORIEGA HOCES , Executive Director of Pranor Group

PRANOR GROUP

Peru’s #1fertilityclinic

ANCIENTENCHANTMENTP

eru is a fascinatingcountry to visit, andoffers tourists a vastarray of stunningnatural habitats.

Within one country you canfind the beaches on the Pacif-ic coast, the world’s longestmountain range, the Andes,

Undoubtedly the most internationally recognized site in Peru, Machu Picchu was used as the filming location of the 1954 Charlton Heston movie, Secret of the Incas, and the more recent Motorcycle Diaries

MARTIN PEREZ MONTEVERDE, Minister of Foreign Trade and Tourism

IN PERU, THERE AREOVER 1,730 BIRDSPECIES, 330 SPECIESOF AMPHIBIANS, 462SPECIES OFMAMMALS, ANDOVER 25,000 PLANTSPECIES

MACHU PICCHU ISONCE AGAIN OPENTO VISITORS, AFTERHEAVY RAINSFLOODED THENEARBY TOWN OFMACHU PICCHU,FORMERLY KNOWNAS AGUASCALIENTES

AN INCREASINGLYRENOWNEDGASTRONOMY ANDBOUTIQUE HOTELS INSOME OF PERU’SMOST BEAUTIFULLOCATIONS DRAWHUNDREDS OFTHOUSANDS OFVISITORS TO THECOUNTRY


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