1.

Introduction
Team 6 is requested by the Germany investors to look for the best investment opportunities in Latin America. As a part of the assignment, this feasibility report should also consider next requirements of investors. High ROI & future growth Low risk (e.g. stable country, durable and sustainable growth)

2.1 Country selection

After the benchmark between 4 countries, Chile seems to be the best choice to start the business with. (see appendix 1); Chile is an excited country to invest for the following reasons (see
appendix 2)

Highest ranking in Latin America on competitiveness, easy doing business and Corruption ranking Stable economic and political situation Highest GDP growth at this moment and in future, low inflation rate, highest income per capita and diverse exporting markets to different countries Spanish as official language, English and German are also quite common for German investors to communicate

2.2 Preselect of industries

Many industries are excited such as copper, lithium, other minerals, iron and steel, wood products, foodstuffs, fish processing, transport equipment, cement and textiles. After comparing the different industries, fish and wine industries are chosen (see appendix 3) due to the increasing worldwide population (see appendix 4) and their increasing need for better quality of food and wine. The mine industry is less interesting due to high volatile international market which easily influences the production, the low willingness of Chilean to work in the mines and higher expectation of quality of life, and mines will eventually exhaust therefore not a sustainable business. Textile industry is not competitive enough compared to China

2.3 Final select of industry

After detailed study within fish and wine market, the fish market is chosen due to (see appendix 3) Less competitions in the fish industry and high worldwide competitions on wines High ROI on fish market, and low ROI on wine industry High leverage of fish market share and low leverage market share of wine

3 Local operations

4 Challenges

Source
http://www.emeraldinsight.com/products/case_studies/pdf/chilean.pdf http://www.sonoma-county.org/edb/pdf/2010/wine_industry_insider.pdf http://www.oecd.org/document/27/0,3746,en_36774715_36775671_47899611_1_1_1_1,00.html http://greenteamusa.com/gthink/index.php/site/single/the_roi_of_oceans/ http://en.mercopress.com/2010/10/06/chilean-wine-exports-reach-1.5-billion-usd-in-12-months-but-profits-down http://country.eiu.com/Chile

Appendix 1 CPA & CAGE ANALYSIS

CPA Population (mio) Population growth Urban population Labour force (mio) C orruption ranking Age structure 0 - 14 years 15 64 years > Inflation GPD (bln) GPD growth rate GPD per capita ($) Unemployment CAGE Culture Different languages Ethnic group Roman Catholic 73.6% Religion Protestant 15.4% Spiritualist 1.3% Bantu/voodoo 0.3% Power Distance Index Individualism Masculinity Uncertainty Avoidance Index Long-Term Orientation Administrative Monetary association Government policies Easy doing business Political climate WTO member Geographic Size of country (sq km) Physical remoteness Argentina 1,261 km, Bolivia 3,423 km, C olombia 1,644 km, French Guiana 730 km, common border Guyana 1,606 km, Paraguay 1,365 km, Peru 2,995 km, Suriname 593 km, Uruguay 1,068 km, Venezuela 2,200 km Economic C ompetitiveness Ranking 53 8,514,877 1,964,375 2,780,400 756,102 Federal republic 126 Stable, high corruption WTO Federal republic 53 Stable, drug-trafficking organisations influence WTO Republic 113 Stable WTO Republic 39 Stable WTO 69 38 49 76 65 Roman Catholic 76.5% Protestant 5.2% Jehovah's Witnesses 1.1% unspecified 13.8% 81 30 69 82 Roman Catholic 92% Protestant 2% Jewish 2% other 4% 49 46 56 86 Roman Catholic 70% Evangelical 15.1% Jehovah's Witnesses 1.1% other 4.6% 63 23 28 86 Portuguese Spanish 92.7%, Spanish and indigenous languages 5.7% Spanish (official), Italian, English, German, French Spanish (official), Mapudungun, German, English 65 years 26% 67.0% 6.70% 6.9% 2011; 5% 2010 2284 2.80% 11.6 6.10% 23.20% 65.20% 6.60% 3.5% 2011; 4.2% 2010 1657 3.80% 15.1 5.10% 25.40% 63.60% 11.00% 10% 2011; 22% 2010 710 8% 17.4 7.20% 22.30% 68.10% 9.60% 3.3% 2011; 1.4% 2010 281 6.50% 16.1 6.90% Brazil 205 1.10% 87% 104 54 Mexico 115 1.10% 78% 48 77 Argentina 42 1.00% 92% 17 77 Chile 17 0.88% 89% 8 17

Bolivia 832 km, Brazil Belize 250 km, 1,261 km, C hile 5,308 Guatemala 962 km, US km, Paraguay 1,880 3,141 km km, Uruguay 580 km

Argentina 5,308 km, Bolivia 860 km, Peru 171 km

58 food and beverages, tobacco, chemicals, iron and steel, petroleum, mining, textiles, clothing, motor vehicles, consumer durables, tourism 3% 14% 23% 63% US 73.5%, C anada 7.5% manufactured goods, oil and oil products, silver, fruits, vegetables, coffee, cotton

85 food processing, motor vehicles, consumer durables, textiles, chemicals and petrochemicals, printing, metallurgy, steel 7.5% 5% 23% 72% Brazil 21.2%, C hina 9.1%, C hile 7%, US 5.4%

31 copper, lithium, other minerals, foodstuffs, fish processing, iron and steel, wood and wood products, transport equipment, cement, textiles 5.3% 5% 42% 53% C hina 23.8%, Japan 10.2%, US 10%, Brazil 6%, South Korea 5.9%

textiles, shoes, chemicals, cement, lumber, iron ore, Industries tin, steel, aircraft, motor vehicles and parts, other machinery and equipment Industrial production growth rate agriculture industry services Export countries

4% 20% 14% 66% C hina 15.2%, US 9.6%, Argentina 9.2%, Netherlands 5.1%, Germany 4%

transport equipment, iron Export commodities ore, soybeans, footwear, coffee, autos

soybeans and copper, fruit, fish derivatives, petroleum products, paper and and gas, vehicles, corn, pulp, chemicals, wine wheat

Appendix 2 Chile Country Profile

Factor Ranking

Pro
High competitive ranking # 31 worldwide; Easy doing businesses #39 worldwide; Corruption ranking at #17 worldwide; These are the highest rankings in Latin America Economic and political stability, due to high FDI1 Country is not threatened by high crime, racial tensions or a terrorist problem2 GDP is 6.5% in 2010 is one of the highest in the region Industrial growth 5.3% as one of the highest GDP growth for next 20 years is expected at 4.6% Chile ranked in 22nd place out of 82 countries around the world (and in by far the best place among Latin American countries)3 The lowest inflation rate in Latin America at 1.4% in 2010 GDP $16,000 per capita as one of the highest in the region Export to a global market, not dependable on certain products, such as copper, fruit, fish, paper and pulp, chemicals and wine Member of WTO, familiar with international regulations Spanish is the official language and the common language in Latin America; German and English seem to be quite common as well Religion prevalent Catholic follow by Evangelicals

Con

Political

Economic

Unemployment 6.9% is quite high in LATAM

Culture

Appendix 3 Benchmark of fish and wine industry

Fish
World consumption 17kg by 2009 (live weight equivalent), slightly growing in 2010, in addition, fish accounted for about 15.7% of world population intake of animal protein and 6.1% of all protein consumed on the same year * 17.1 % as for 2010 and projected to grow to 17.9% by 2020 * With 898 million arrivals to the marine environment in 2007 and an annual growth of 5 percent worldwide, revenues from coastal tourism amount to over $161 billion globally. Just fishing is a $90+ billion industry Fisherman: 200 million people fish for their livelihoods worldwide Sea food in tons: Oceans provide over 157 million tons of food per year Chile? 38%

Wine
The world wine consumption is decreasing, especially in the developed countries last few years, e.g. France, USA, Italy; however the consumption emerging countries like China is increasing 3.47 Liter Wine/ person Low ROI due to high global competition, world economic recession and changing (USA) consumer behavior to eat more at home Chilean governments current policies aims to convert Chile into one of the worlds top ten exporters of food products over the course of the next ten years. Chilean wine is well-identified country brand that associates the name Chile with quality and diversity. 4.3%

Worldwide consumption / capita ROI / market

Strength Chile

World market share

Appendix 4 world population

1 2

3 http://country.eiu.com/Chile

http://businesschile.cl/en/news/reportaje-principal/investing-chile-are-we-attractive http://businesschile.cl/en/news/reportaje-principal/investing-chile-are-we-attractive

Appendix 5 world wine consumption & market shares

Top 10 win exporting countries in 2006

Rank 1 2 3 4 5 6 7 8 9 10 Italy* France Spain* Australia Chile* United States Germany Argentina Portugal South Africa World** Country 1000 tonnes 1,793 1,462 1,337 762 472 369 316 302 286 272 8,353

2006 export market shares

Rank 1 2 3 4 5 6 7 8 9 10 France Italy Australia Spain Chile United States Germany Portugal South Africa New Zealand Country Market share (% value in US$) 34.9% 18.0% 9.3% 8.7% 4.3% 3.6% 3.5% 3.0% 2.4% 1.8%

Appendix 6 Comparison between fish and wine industry