B. DATA ON BEST PROSPECTS FOR AGRICULTURAL AND INDUSTRY SECTOR EXPORTS AGRICULTURAL SECTOR EXPORTS BEST PROSPECT FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 1 B. Name of Sector: Planting seeds C. ITA or PS&D Code: 24SR 1993 1994 1995 D. Total market size 428.2 439 445 E. Total local production 400.0 407 410 F. Total exports 17.2 17.8 18.0 G. Total imports 28.2 32.0 35.0 H. Total imports from U.S. 17.8 20.0 21.0 I. Exchange rate 1 $US = 1$ " " Comments: Between 1990 and 1993, the U.S. market in Argentina for this category, including field crop, grass forage and vegetable seeds has nearly doubled in size, in dollar terms. BEST PROSPECT FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 2 B. Name of Sector: Snack foods C. ITA or PS&D Code: NA 1993 1994 1995 D. Total market size 85 87 92 E. Total local production 70 73 78 F. Total exports 0 0 2 G. Total imports 15 14 16 H. Total imports from U.S. 9.3 10 12 I. Exchange rate 1 $US = 1$ " " Comments: The snack food sector, including potato chips, popcorn, cookies, etc. (but excl. nuts), is the second largest category for U.S. agricultural exports to Argentina (after planting seeds). The rate of growth in snack food exports has been nothing short of phenomenal, from just $60,000 in 1989 to $9.3 million in 1993. Although we do not expect to see comparable growth in the immediate future, consumer- oriented, ready-to-eat snack foods should remain the single largest food category for U.S. exporters. BEST PROSPECT FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 3 B. Name of Sector: Processed fruits/vegs. C. ITA or PS&D Code: 10, 16, 36 1993 1994 1995 D. Total market size 2,110 2,180 2,240 E. Total local production 1,950 2,010 2,070 F. Total exports 128 130 131 G. Total imports 160 165 167 H. Total imports from U.S. 4.8 5.0 5.5 I. Exchange rate 1 $US = 1$ " " Comments: U.S. processed fruit and vegetable exports to Argentina have shown extraordinary growth in the last 5 years, from just under $200,000 in 1989, to nearly $4.8 million in 1993. Growth should remain quite solid, especially with strong consumer interest in year-round quality food products, but probably not at the levels seen recently. BEST PROSPECT FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 4 B. Name of Sector: Inedible tallow C. ITA or PS&D Code: 52 1993 1994 1995 D. Total market size 104 108 110 E. Total local production 100 104 105 F. Total exports 1.5 1.5 2.0 G. Total imports 4.0 4.0 5.0 H. Total imports from U.S. 3.4 3.6 4.0 I. Exchange rate 1 $US = 1$ " " Comments: U.S. exports are expected to remain an annual $3.4 million market for at least the next several years, as local production accounts for most of the demand for this product. BEST PROSPECT FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 5 B. Name of Sector: Edible nuts C. ITA or PS&D Code: 14 1993 1994 1995 D. Total market size 23 23.3 25.5 E. Total local production 15 15 17 F. Total exports 0 0 0 G. Total imports 8.0 8.3 8.5 H. Total imports from U.S. 3.3 3.5 3.5 I. Exchange rate 1 $US = 1$ " " Comments: U.S. exports are expected to remain an annual $3-4 million market for at least the next several years, as local production accounts for most of the demand for this product. INDUSTRY SECTOR EXPORTS BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 1 B. Name of Sector: TELECOMMUNICATIONS EQUIPMENT C. ITA or PS&D Code: TEL 1993 1994 1995 D. Total Market Size 1,300 1,450 1,600 E. Total Local Production 927 1,043 1,158 F. Total Exports 7 8 8 G. Total Imports 380 415 450 H. Total Imports from U.S. 65 75 85 I. Exchange Rate: One peso equals one dollar. Comments: The Argentine telecommunications sector was fully privatized in 1991. The former state firm, ENTEL, was divided into two companies which share the country (Telefonica and Telecom). In mid-1994, a major development occurred: cellular telephony, originally available only in selected cities, was licensed out throughout the country. CTI, a consortium headed by GTE and AT&T, won the contracts to provide cellular service throughout Argentina except Metropolitan Buenos Aires. MOVICOM, a consortium headed by Bell South and Motorola, provides cellular service to metro Buenos Aires, in addition to several competing firms. As Argentina continues to have a strong currency and a stable economy, firms will continue to source in foreign markets for "state of the art" equipment. As basic telephony becomes more available throughout the country, demand for sophisticated value-added services will increase and generate demand for specific equipment. U.S. suppliers will find a growing market for the latter type of products. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 2 B. Name of Sector: TRAVEL AND TOURISM SERVICES C. ITA or PS&D Code: TRA 1993 1994 1995 D. Total Sales 2,000 2,240 2,500 E. Sales by local firms 1,050 1,165 1,318 F. Export sales by local firms 50 45 50 G. Sales by foreign-owned firms 1,000 1,120 1,232 H. Sales by U.S.-owned firms 736 868 1,025 I. Exchange Rate: One Peso equals one dollar. Comments: The number of Argentine tourists visiting the United States continued its previous steady growth, with more than 398,000 travellers during 1993, a 12 percent increase compared to 1992. Some 500,000 Argentines are expected to visit the U.S. in 1994. The State of Florida continued to be the leading tourism destination, with a 67 percent share of the total. California and New York also generated an increase, mainly due to the increasing number of Argentine businesspeople travelling to conventions and expositions in the United States. The most promising subsectors and estimated 1994 size of the market: car rentals: US$50 million; room nights at 4 star hotels: US$40 million; ski resorts and lifts: US$25 million; Disneyworld, Busch Gardens and Universal Studios (Florida) theme parks: US$35 million. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 3 B. Name of Sector: ELECTRIC POWER GENERATION AND TRANSMISSION EQUIPMENT C. ITA or PS&D Code: ELS 1993 1994 1995 D. Total Market Size 430 500 570 E. Total Local Production 145 183 221 F. Total Exports 15 13 16 G. Total Imports 300 330 365 H. Total Imports from U.S. 98 110 123 I. Exchange Rate: One peso equals one dollar. Comments: The GOA has privatized the electric energy sector and has transferred several thermal power plants. U.S. firms are operating many of them. In view of Argentina's solid economic growth, demand for electric energy will continue to grow at over 15 percent annually in 1994 and beyond. The distribution system will have to be revamped or replaced in order to keep up with demand. Products include fuses for low voltage distribution (220/380 volts): US$36 million; transformers, dry cells: US$23 million; switch boxes, electrical wires, etc. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 4 B. Name of Sector: OIL AND GAS FIELD MACHINERY C. ITA or PS&D code: OGM 1993 1994 1995 D. Total Market Size: 1,100 1,210 1,350 E. Total Local Production: 1,062 1,000 1,100 F. Total Exports: 60 70 80 G. Total Imports: 98 280 330 H. Total Imports from U.S.: 60 170 200 I. Exchange Rate: 1 1 1 Comments: Following the privatization of YPF, the GOA granted ten concessions for oil-fields in central areas and the Under-Secretariat for fuels has awarded 85 concessions for marginal areas. Local manufacturers, many of them subsidiaries or licensees of foreign-owned firms, continue to dominate the market. However, given the relatively higher prices of locally made products, foreign suppliers should capture a larger share. Among the subsectors offering the best sales opportunities are: finishing, tools (US$5 million); injection equipment (US$6 million); pipeline equipment (US$10 million); cementing equipment (US$6 million) BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 5 B. Name of Sector: COMPUTERS AND PERIPHERALS (SEP) C. ITA or PS&D Code: CPT 1993 1994 1995 D. Total Market Size 350 397 423 E. Total Local Production 37 39 25 F. Total Exports 7 4 2 G. Total Imports 320 362 400 H. Total Imports from U.S. 215 255 280 I. Exchange Rate: One peso equals one dollar Comments: A wide cross-section of Argentine firms will continue to equip themselves with fourth generation computers and systems. Financial institutions, public utilities and heavy industry will be the prime clients. Brand name P.C.'s will represent a major portion of total sales. Following is a breakdown of the market: PCs US$200 million; mini computers, US$30 million; printers, US$80 million; laptop notebook, US$30 million; and, LAN servers and ancillary equipment, US$20 million. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 6 B. Name of Sector: CONSTRUCTION AND BUILDING MATERIALS C. ITA or PS&D Code: BLD 1993 1994 1995 D. Total Market Size 700 805 900 E. Total Local Production 630 689 767 F. Total Exports 15 18 23 G. Total Imports 85 98 110 H. Total Imports from U.S. 38 45 50 I. Exchange Rate: One peso equals one dollar. Comments: Growing opportunities exist for U.S. suppliers of materials and supplies for the construction industry. The recently created pension fund system will generate significant investment capital for new developments. Additionally, increasing availability of Bank loans is generating some large housing projects. Some of the subsectors in high demand should be: fastening and power tools (US$7 million); chemical additives (US$15 million); concrete molds (US$4 million). BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 7 B. Name of Sector: MEDICAL EQUIPMENT C. ITA or PS&D Code: MED 1993 1994 1995 D. Total Market Size 350 380 410 E. Total Local Production 162 174 183 F. Total Exports 2 3 3 G. Total Imports 190 209 230 H. Total Imports from U.S. 80 90 100 I. Exchange Rate: One peso equals one dollar. Comments: The Argentine medical equipment market should become one of the most rapidly growing segments in the economy. Several hospitals formerly run by the Federal Government have been transferred to the provinces. Many are in the process of being managed by foreign consulting firms (specially U.S.). This market is highly receptive to new medical equipment. The local community of doctors and distributors are aware of advances in the developed countries and new equipment is of interest to them. U.S. products could expand their share through an early introduction of new models. German and Japanese suppliers are well established in this market. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 8 B. Name of Sector: FOOD PROCESSING & PACKAGING EQUIPMENT C. ITA or PS&D Code: FPP 1993 1994 1995 D. Total Market Size 215 250 285 E. Total Local Production 129 150 170 F. Total Exports 4 5 5 G. Total Imports 90 105 120 H. Total Imports from U.S. 17 20 25 I. Exchange Rate: One peso equals one dollar. Comments: The Argentine Food processing sector is going through a dynamic process. Fierce competition from imported food products is forcing local suppliers to update their production facilities and to incorporate cost-cutting, state-of-the-art equipment. Additionally, as the economy continues to improve, world leaders in the food industry are acquiring Argentine companies in fields like confectionery, biscuit, meat processing and fruit and vegetable processing. Many of these acquisitions are being made by American firms, and this will dictate the purchase of new equipment from the United States. The packaging subsector is expected to experience above average growth. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 9 B. Name of Sector: POLLUTION CONTROL EQUIPMENT C. ITA or PS&D Code: POL 1993 1994 1995 D. Total Market Size 2 14 16 E. Total Local Production 9 10.2 11.5 F. Total Exports 0 0 0 G. Total Imports 3 3.8 4.5 H. Total Imports from U.S. 1.5 2.0 2.5 I. Exchange Rate: One peso equals one dollar. Comments: There is a growing awareness of environmental issues that is forcing the Argentine Congress to pass adequate legislation. Industrial process companies are already anticipating stronger enforcement and installing water and solid waste pollution control equipment. With the rise of democracy and increasing citizen input, environmental issues have been propelled to the national agenda, and it is a government policy to improve water quality. Due to Argentina's growing appetite for fuel for its vehicles, thermal electric power stations, and heating equipment, the air quality is often below standards. Future government attempts to attack these problems should make the Argentine pollution control equipment market blossom. Argentina lacks both environmental research facilities and research personnel; therefore, its greatest need will be to import foreign technologies. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 10 B. Name of Sector: COMPUTER SOFTWARE (SEP) C. ITA or PS&D Code: CSF 1993 1994 1995 D. Total Sales 170 175 198 E. Sales by local firms 90 95 110 F. Export sales by local firms 30 40 44 G. Sales by foreign-owned firms 110 120 132 H. Sales by U.S.-owned firms 74 85 95 I. Exchange Rate: One peso equals one dollar. Comments: The Argentine market for U.S. produced software will continue to be of importance. A growing concern over intellectual property protection will gradually reduce illegal use. Aside from the major producers, i.e., banks, commercial and industrial firms, the government should play a more important role. The main market segments are: operating systems for PCs, US$30 million; base software, US$50 million; integrated applications and word processing for PCs, US$20 million; for mini-computers, US$15 million; and, general business application software, US$25 million. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 11 B. Name of Sector: AGRICULTURAL CHEMICALS C. ITA or PS&D Code: AGC 1993 1994 1995 D. Total Market Size 210 215 222 E. Total Local Production 115 100 80 F. Total Exports 5 5 3 G. Total Imports 100 120 145 H. Total Imports from U.S. 65. 50 55 I. Exchange Rate: One peso equals one dollar. Comments: The Argentine consumption of agri-chemicals should continue to grow, given this country's reliance on agricultural commodity exports as a source of foreign exchange. Lower-priced herbicides from the Far East are hurting the U.S. share of this subsector, as well as competition from local producers. As agricultural machinery and equipment become more affordable, a shift from extensive to intensive production should translate into an increased use of agri-chemicals. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 12 B. Name of Sector: AIRPORT & GROUND SUPPORT EQUIPMENT C. ITA or PS&D Code: APG 1993 1994 1995 D. Total Market Size 108.5 122.1 145 E. Total Local Production 3.4 3.8 4 F. Total Exports 0 0 0 G. Total Imports 119.9 125.9 141 H. Total Imports from U.S. 30.4 34 40 I. Exchange Rate: One peso equals one dollar. Comments: Demand for airport equipment is expected to grow dramatically over the next five years. The increase in demand is expected to occur either in response to the privatization of existing airport facilities or as a result of actions undertaken by the GOA, as it attempts to upgrade the local network of navigation aids and other installed capacity. The funds allotted to the overall aviation subsector have grown at a consistent 12.5 percent annually over the last four years. Once privatization occurs, demand for equipment should grow at an even greater rate. U.S. suppliers have the largest share of this market (28 pct), followed by France (18 pct) and Germany (12 pct). BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 13 B. Name of Sector: FRANCHISING SERVICES C. ITA or PS&D Code: FRA 1993 1994 1995 D. Total Sales 30 38 45 E. Sales by local firms 8.5 10 7.5 F. Export Sales by local firms 1.5 2 2.5 G. Sales by foreign-owned firms 23 30 40 H. Sales by U.S.-owned firms 9 12 15 I. Exchange Rate: One peso equals one dollar. Comments: The Argentine market for franchising is growing rapidly, as a result of economic stability and growth. During 1993, the number of firms active in this field has doubled. The most active sectors, in ranking order are: wearing apparel, fast food, shoes, bakeries, ice cream and tire repair centers. U.S. firms will capture the largest share of this promising market which can be estimated as follows: wearing apparel: US$13 million; fast food: US$9 million; and, sporting goods: US$9 million. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 14 B. Name of Sector: AGRICULTURAL MACHINERY AND EQUIPMENT C. ITA or PS&D Code: AGM 1993 1994 1995 D. Total Market Size 500 600 720 E. Total Local Production 483 576 688 F. Total Exports 15 16 17 G. Total Imports 32 40 49 H. Total Imports from U.S. 6 7 8.5 I. Exchange Rate: One peso equals one dollar. Comments: The Argentine farm equipment market has been growing at a lower race than other imports. The economic stabilization plan, and a fixed dollar-peso rate of one to one, have translated into higher local production costs for export commodities. Local manufacturers of agricultural equipment are virtually assembling imported components, in view of high local costs. Industry experts are anticipating a moderate growth in the levels of investment during 1994 and beyond. The adoption of state of the art imported equipment is seen as a way to lower production costs. Special credit lines are available for agricultural producers. Specialized equipment for new crops, such as fine fruits and vegetables should find good demand. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 15 B. Name of Sector: MOTOR VEHICLES C. ITA or PS&D Code: AUT 1993 1994 1995 D. Total Market Size 4,000 6,000 6,600 E. Total Local Production 3,100.5 4,965.6 5,401 F. Total Exports 0.5 0.6 1 G. Total Imports 900 1,035 1,200 H. Total Imports from U.S. 180 205 240 I. Exchange Rate: One peso equals one dollar. Comments: Argentine imports of motor vehicles have grown at a higher rate than anticipated, reaching US$900 million in 1993. While European and Japanese manufacturers still dominate the import market, U.S. manufacturers are capturing a growing share, specially in 4-wheel drive vehicles, vans and mini-vans. The GOA is gradually softening import barriers, and this will translate to opportunities for U.S. manufacturers. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 16 B. Name of Sector: SPORTING GOODS C. ITA or PS&D Code: SPT 1993 1994 1995 D. Total Market Size 770 840 920 E. Total Local Production 460 502 549 F. Total Exports 10 12 14 G. Total Imports 320 350 385 H. Total Imports from U.S. 95 105 120 I. Exchange Rate: One peso equals one dollar. Comments: Argentina's strong currency and liberal import policy continues to encourage purchases of imported sporting goods. The Argentine market for these items is expected to grow at ten percent annually through 1995. U.S. manufacturers clearly dominate the market with a 30 percent share. Tennis rackets, fishing equipment, gymnasium equipment, camping and outdoor items and outboard engines have good marketing possibilities. There is an increasing demand for Brazilian-made products, however, because of their low prices. Among the most promising subsectors for 1994 are: camping gear: US$35 million; motor homes: US$24 million; tennis rackets: US$23 million; outboard engines, over 25 HP: US$15 million; and, soccer balls: US$6 million. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 17 B. Name of Sector: PLASTICS PROCESSING MACHINERY C. ITA or PS&D Code: PME 1993 1994 1995 D. Total Market Size 80 83 88 E. Total Local Production 28 25 22 F. Total Exports 3 4 4 G. Total Imports 55 62 70 H. Total Imports from U.S. 15 18 20 I. Exchange Rate: One peso equals one dollar. Comments: Argentina has abundant hydrocarbon reserves and a good petrochemicals processing installed base. This translates into ample supply of plastic raw materials. The local packaging industry has experienced high sustained growth during the past few years. Competition from foreign- made consumer products is forcing local producers to invest in state-of- the-art, cost-cutting plastics processing equipment. Additionally, recent acquisitions by U.S. multi-nationals will translate into increased U.S. exports, since uniform production practices will dictate the purchase of U.S. equipment. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 18 B. Name of Sector: TOYS AND GAMES C. ITA or PS&D Code: TOY 1993 1994 1995 D. Total Market Size 1,200 1,344 1,500 E. Total Local Production 858 954 1,062 F. Total Exports 8 10 12 G. Total Imports 350 400 450 H. Total Imports from U.S. 75 90 105 I. Exchange Rate: One peso equals one dollar. Comments: The continuation of liberal economic policies, which have removed almost all non-tariff restrictions on the import of consumer products (including toys and games), is generating a steady increase in sales of electro-mechanical toys and computerized games. The strong local currency and the economic stability continue to encourage local distributors to import these toys and games. Local competition is still limited to manual and medium-quality items. Toys manufactured in Brazil will limit the expansion of U.S.-made toys because of lower prices. Games exported from the United States to Argentina will maintain growth in the next three years. The most promising subsectors and estimated 1994 size of the market: games, educational, low cost, for age group 1- to-5 years: US$38 million; electronic games: US$24 million; and, collectible dolls, small, "Barbie" type: US$20 million. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 19 B. Name of Sector: APPAREL C. ITA or PS&D Code: APP 1993 1994 1995 D. Total Market Size 750 900 1,100 E. Total Local Production 666 805 980 F. Total Exports 4 5 5 G. Total Imports 80 100 125 H. Total Imports from U.S. 22 28 35 I. Exchange Rate: One peso equals one dollar. Comments: The Argentine market was almost entirely supplied by local manufacturers (including production of licensed foreign brands) until April 1991. Market liberalization and changing consumer patterns have generated a significant growth in imported apparel. However, local manufacturers still continue to satisfy over 80 percent of the demand. Import duties remain high: 20 percent ad valorem on the CIF price, plus an additional tax that brings the duty level to about 30 percent. An attractive feature of the Argentine market is that the apparel season is exactly reversed, which means that for this fall (the Argentine autumn runs from March to April), a U.S. manufacturer could display fall/winter products from last year's line. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 20 B. Name of Sector: AUTO PARTS AND SERVICE EQUIPMENT C. ITA or PS&D Code: APS 1993 1994 1995 D. Total Market Size 1,050 1,140 1,200 E. Total Local Production 845 902 924 F. Total Exports 10 12 14 G. Total Imports 215 250 290 H. Total Imports from U.S. 45 50 55 I. Exchange Rate: One peso equals one dollar. Comments: The Argentine autoparts and service equipment sector is expanding at a rate of over 8 percent annually. The import market is expanding even faster: 15 percent. Three auto makers direct the course of this market. The reasons behind the continuous imports of parts and service equipment include: foreign domination of technology; lack of economies of scale within the Argentine market; quality control insufficiencies; and, underdeveloped component technology. The United States has traditionally been a favorite supplier. Given the predominance of European brands, U.S. firms producing parts for foreign cars should find a promising market. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 21 B. Name of Sector: AIRCRAFT PARTS AND ACCESSORIES (SEP) C. ITA or PS&D Code: AIR 1993 1994 1995 D. Total Market Size 36 39.5 45 E. Total Local Production 5 4 4 F. Total Exports 1 1 1 G. Total Imports 32 36.5 42 H. Total Imports from U.S. 19 22.5 26 I. Exchange Rate: One peso equals one dollar. Comments: Traditionally, the United States has been the leading supplier of aircraft parts and accessories, with a market share of over 50 percent. After years of stagflation which drastically reduced the operational Argentine general aviation fleet, the industry is today experiencing rapid growth. Aircraft repair stations are working at full capacity, overhauling, modifying and retrofitting the once-idle fleet. Growing imports of new aircraft are also generating demand for parts and accessories. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 22 B. Name of Sector: LABORATORY AND SCIENTIFIC EQUIPMENT (SEP) C. ITA or PS&D Code: LAB 1993 1994 1995 D. Total Market Size 8.5 8 10 E. Total Local Production 2.5 1 1.5 F. Total Exports 0 0 0 G. Total Imports 6 7.0 8.5 H. Total Imports from U.S. 3.5 4.5 5.2 I. Exchange Rate: one peso equals one dollar. Comments: The import liberalization program is a challenge for local manufacturing: firms which do not equip themselves with cost effective, "state-of-the-art" production equipment will be wiped out by better quality, lower priced imported finished products. Better manufacturing processes and techniques and stricter quality control procedures will generate a growing demand for laboratory and scientific instruments. This applies to both industrial manufacturing and food processing. The United States is a well-established supplier but faces strong competition from Germany and Japan. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 23 B. Name of Sector: WATER TREATMENT EQUIPMENT C. ITA or PS&D Code: 1993 1994 1995 D. Total Market Size 50 58 67 E. Total Local Production 26 29 32 F. Total Exports 1 1 1 G. Total Imports 25 30 36 H. Total Imports from U.S. 10 12 15.5 I. Exchange Rate: One peso equals one dollar. Comments: As Argentina is pulling out of recession and citizen input as a result of democratization is on the rice, environmental issues have been propelled onto the national agenda. Water quality is of particular concern especially in highly populated areas where growth has anticipated planning and infrastructure investments. New government attempts to enforce water quality controls should make the Argentine market for this type of equipment blossom. The private sector still has a lukewarm attitude towards investment in this area. Argentina lacks both environmental research facilities and research personnel, therefore it will rely on foreign technology. While chemical refineries, leather and food processing industries are the most prominent potential customers, U.S. suppliers should keep in mind that almost all manufacturing companies will need pollution control equipment. France has been the principal supplier in this field, but U.S. technologies are highly reputed and will be accepted widely. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 24 B. Name of Sector: AIRCRAFT (SEP) C. ITA or PS&D Code: AIR 1993 1994 1995 D. Total Market Size 316 234 286 E. Total Local Production 6 4 6 F. Total Exports 0 0 0 G. Total Imports 310 230 280 H. Total Imports from U.S. 288 200 240 I. Exchange Rate: one peso equals one dollar. Comments: Argentina is a typical country for growing aviation activity: long distances, very scattered populated areas and production plants far away from corporate headquarters. The recent economic bonanza is gradually reaching this sector. Additionally, deregulation of domestic passenger flights has translated into growth of feeder airlines and air taxi companies. The market for general aviation aircraft is expected to grow at over 20 percent annually after 1995. BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA (US$ millions, unless otherwise noted) A. Rank: 25 B. Name of Sector: ENGINEERING SERVICES C. ITA or PS&D Code: 1993 1994 1995 D. Total Sales 100 110 120 E. Sales by local firms 52 58 65 F. Export sales by local firms 2 2 3 G. Sales by foreign-owned firms 50 54 58 H. Sales by U.S.-owned firms 19 22 25 I. Exchange Rate: One peso equals one dollar. Comments: Argentina's market for all engineering services, particularly in the private sector, expanded at over ten percent annually from 1991 to 1993. This was mostly the result of the GOA's successful economic stabilization program, which included a privatization component. Local consulting firms have traditionally controlled this market. At present, foreign consulting firms have captured as much as 50 percent of the market. U.S. firms enjoy a 40 percent share of the sales by foreign based companies. The main sources for contracts are the sanitation, transportation, dredging, petrochemicals, food and pollution control industries. U.S. firms should seek suitable local joint-venture partners.