APPENDIX B DATA ON BEST PROSPECT SECTORS AGRICULTURE AND INDUSTRY SECTOR EXPORTERS BEST PROSPECTS FOR AGRICULTURAL SECTOR EXPORTS Rank: 1 Name of Sector: Agricultural Consumer Oriented Products ITA Code: HVP 1993 1994 1995 (US$ in millions, unless otherwise noted) Total Market Size 153.6 161.4 169.7 Total Local Production1/ 322.0 330.1 338.3 Total Exports 282.3 285.1 288.0 Total Imports 113.6 116.4 119.4 Total Imports from U.S. 49.3 50.5 51.8 Exchange Rate 1 U.S. Dollar = 1 Balboa (Fixed Rate) 1/ Includes production for exports. Comments: U.S. exports of agricultural consumer oriented products reached a record US$ 49.3 million in 1993. Major products exported include: process fruit and vegetables (US$ 8.6 million), wine and beer (US$ 8.6 million), snack foods (US$ 4.9 million), fresh fruits (US$ 3.9 million), breakfast cereals (US$ 3.8 million) and fruit and vegetable juices (US$ 3.7 million). Main competitors are: Guatemala, Costa Rica, Chile, Denmark, Ecuador. Best prospect sub-sectors (est. 1995 market size): Breakfast cereals (US$ 9.2 million). Fresh fruits (US$ 9.1 million). Canned sardines (US$ 7.5 million). --------------------------------------------------------------- Rank: 2 Name of Sector: Bulk Agricultural Products ITA Code: G&F 1993 1994 1995 (US$ in millions, unless otherwise noted) Total Market Size 115.9 118.1 120.5 Total Local Production 75.0 76.1 77.3 Total Exports1/ 8.4 8.5 8.6 Total Imports 49.3 50.5 51.8 Total Imports from U.S. 29.4 30.1 30.9 Exchange Rate 1 U.S. Dollar = 1 Balboa (Fixed Rate) 1/ Includes domestic tobacco exports which reached US$ 8.2 million in 1993. Comments: U.S. exports of bulk agricultural products totaled US$ 29.4 million in 1993. Major bulk commodities were: wheat (US$ 15.6 million) and yellow corn (US$ 11.6 million). Main competitors come from: Germany, Belgium, Denmark, France. Best prospect sub-sectors (est. 1995 market size): Wheat (US$ 16.4 million). Yellow corn (US$ 11.9 million). Malt (US$ 5.5 million). Rank: 3 Name of Sector: Intermediate Agricultural Products ITA Code: O&P 1993 1994 1995 (US$ millions in unless otherwise noted) Total Market Size 99.3 101.5 103.9 Total Local Production1/ 75.0 76.1 77.3 Total Exports 32.2 32.5 32.8 Total Imports 56.5 57.9 59.4 Total Imports from U.S. 28.1 28.8 29.5 Exchange Rate 1 U.S. Dollar = 1 Balboa (Fixed Rate) 1/ Total includes domestic sugar exports which reached US$ 21.8 million in 1993. Comments: U.S. exports of intermediate agricultural products came to US$ 28.1 million in 1993. Major products exported were: soybean meal (US$ 11.7 million, record high), corn gluten (US$ 3.1 million), feed and feed ingredients (US$ 1.8 million), and corn oil (US$ 0.8 million). Main competitor is Argentina. Best prospects sub-sector (est. 1995 market size): Soybean meal (US$ 12.9 million). Soybean oil (US$ 10.7 million). Corn gluten (US$ 3.4 million). BEST PROSPECTS FOR INDUSTRY SECTOR EXPORTS Rank: 1 Name of Sector: Building Products ITA Code: BLD 1993 1994 1995 (US$ in millions, unless otherwise noted) Total Market Size 143.0 166.0 187.3 Total Local Production 98.0 113.0 129.0 Total Exports 0.0 0.0 0.0 Total Imports 45.0 53.0 58.3 Total Imports from U.S. 30.0 35.0 38.5 Exchange Rate 1 U.S. Dollar = 1 Balboa (Fixed Rate) Comments: The Construction Sector in Panama has continued the strong recovery process initiated in 1990. This sector has shown a growth rate above 15% for the last 3 years. A majority of the construction activity is for middle to high income apartment buildings and the remaining in construction of commercial centers. U.S. building products have a high degree of acceptance. Import tariffs are designed to protect the local industry for those items produced locally, e.g. cement products, lumber products. Competition comes mainly from Italy and Spain. Best prospect sub-sectors (est. 1995 market size): Non-lumber products (US$ 10 million). Fixtures (US$ 8 million) Rank: 2 Name of Sector: Computers and Peripherals ITA Code: CPT 1993 1994 1995 (US$ in millions, unless otherwise noted) Total Market Size 31.0 34.7 38.9 Total Local Production 0.0 0.0 0.0 Total Exports 0.0 0.0 0.0 Total Imports 31.0 34.7 38.9 Total Imports from U.S. 19.0 22.0 24.5 Exchange Rate 1 U.S. Dollar = 1 Balboa (Fixed Rate) Comments: The sustained growth of the economy and reduced import duties for computers guarantee a steady growth for this sector during the next three years. The government is currently implementing projects leading to the introduction of computers in public schools. The private sector is also making important advances in incorporating state-of-the-art computer technology in its operations, especially in the banking and food retailing sectors. Competition comes mainly from Taiwan and Korea. U.S. products are viewed as offering the latest technology. No import restrictions exist for computers and peripherals. Import duties for computers and peripherals range from 5 to 10%. Best prospect sub-sectors (est. 1995 market size): Mid-range computers (US$ 10 million). Computer printers (US$ 5 million). ----------------------------------------------------------------- Rank: 3 Name of Sector: Apparel ITA Code: APP 1993 1994 1995 (US$ in millions, unless otherwise noted) Total Market Size 130.0 143.0 161.0 Total Local Production 39.0 44.0 52.0 Total Exports 10.0 12.0 14.0 Total Imports 101.0 111.0 123.0 Total Imports from U.S. 18.0 21.0 24.8 Exchange Rate 1 U.S. Dollar = 1 Balboa (Fixed Rate) Comments: The bulk of apparel sales is devoted to either the high or low end of the market. Both are very competitive. Middle to upper class Panamanians are very trend conscious and loyal to brand names. U.S. products are considered of good quality and value. Competitors of U.S. products at the high end of the market are from Europe (e.g. France and Italy), whereas, the low end competitors are from Asia (i.e. Korea, Taiwan and China). The traditional market for U.S. products is concentrated in the middle to high income levels. Import duties are relatively low (20-25%) and no significant import restrictions exist. Best prospect sub-sectors (est. 1995 market size): Men's/women's/children's apparel (US$ 64 million). Sportswear (US$ 15 million). Rank: 4 Name of Sector: Automotive Parts and Service Equipment ITA Code: APS 1993 1994 1995 (US$ in millions, unless otherwise noted) Total Market Size 37.0 41.0 45.0 Total Local Production 0.0 0.0 0.0 Total Exports 0.0 0.0 0.0 Total Imports 37.0 41.0 45.0 Total Imports from U.S. 13.0 14.4 16.2 Exchange Rate 1 U.S. Dollar = 1 Balboa (Fixed Rate) Comments: The Automotive Parts and Service Equipment market has experienced a strong growth during the last 10 years due to the steady increase in automobile sales. The projected growth in the automotive parts and service market will offer excellent opportunities for U.S. exporters. U.S. products enjoy a high degree of acceptance. Main competitors come from the Far East. No significant import restrictions exist for these products and average import duties are 10-20%. Best prospect sub-sectors (est. 1995 market size): Automotive tubes and tires (US$ 13 million). Accessories (US$ 6 million). ----------------------------------------------------------------- Rank: 5 Name of Sector: Medical Equipment ITA Code: MED 1993 1994 1995 (US$ in millions, unless otherwise noted) Total Market Size 15.0 17.0 18.7 Total Local Production 0.0 0.0 0.0 Total Exports 0.0 0.0 0.0 Total Imports 15.0 17.0 18.7 Total Imports from U.S. 11.0 12.5 14.1 Exchange Rate 1 U.S. Dollar = 1 Balboa (Fixed Rate) Comments: The medical equipment sector will continue offering good opportunities for U.S. exporters as private and public medical institutions purchase new equipment to replace old or obsolete equipment. U.S. medical equipment products have a high degree of receptivity because of their quality and the fact that most doctors in Panama are trained in the U.S. No import restrictions exist for medical equipment. Main competitors come from: Italy, France and Germany. Best prospect sub-sectors (est. 1995 market size): Disposable medical products (US$ 9 million). Diagnostic equipment (US$ 4 million). Rank: 6 Name of Sector: Air Conditioning and Refrigeration ITA Code: ACR 1993 1994 1995 (US$ in millions, unless otherwise noted) Total Market Size 27.0 30.0 34.0 Total Local Production 0.0 0.0 0.0 Total Exports 0.0 0.0 0.0 Total Imports 27.0 30.0 34.0 Total Imports from U.S. 10.0 11.3 12.8 Exchange Rate 1 U.S. Dollar = 1 Balboa (Fixed Rate) Comments: Due to climatic conditions, Panama always has been a good prospect for air conditioning and refrigeration equipment. The strong growth of the construction sector, the increased activity in the fisheries sector and a continued increase in the consumption of perishable goods, represent excellent market opportunities for U.S. air conditioning and refrigeration equipment. Competition for air conditioning and refrigeration equipment comes mainly from Japan and Korea in the case of residential and commercial products. U.S. products dominate the market for industrial equipment. Best prospect sub-sectors (est. 1995 market size): Commercial and residential air conditioning (US$ 11 million). Industrial refrigeration equipment (US$ 9 million). ----------------------------------------------------------------- Rank: 7 Name of Sector: Food Processing and Packaging Equipment ITA Code: FPP 1993 1994 1995 (US$ in millions, unless otherwise noted) Total Market Size 12.0 13.2 14.5 Total Local Production 0.0 0.0 0.0 Total Exports 0.0 0.0 0.0 Total Imports 12.0 13.2 14.5 Total Imports from U.S. 10.0 11.0 12.2 Exchange Rate 1 U.S. Dollar = 1 Balboa (Fixed Rate) Comments: The food processing and packaging equipment sector has grown at the same pace as the economy. Market demand for processed food products is strong and is expected to continue its upward trend during the next few years as food processing plants purchase new equipment to modernize their facilities. No import restrictions exist for food processing and packaging equipment. U.S. suppliers own the lion's share of the market, although there are competitive product lines from Italy, Brazil and Canada. Best prospect sub-sectors (est. 1995 market size): Beverages (canning, bottling/bagging) (US$ 3.5 million). Meat and poultry processing equipment (US$ 3.5 million). Rank: 8 Name of Sector: Telecommunications Equipment ITA Code: TEL 1993 1994 1995 (US$ in millions, unless otherwise noted) Total Market Size 30.0 35.0 45.0 Total Local Production 0.0 0.0 0.0 Total Exports 0.0 0.0 0.0 Total Imports 30.0 35.0 45.0 Total Imports from U.S. 5.0 6.0 8.0 Exchange Rate 1 U.S. Dollar = 1 Balboa (Fixed Rate) Comments: The government-owned telephone company, INTEL, has continued a dynamic program to increase its basic services. INTEL is currently in the process of adding 200,000 new digital telephone lines to its installed base. Prospects for the near future include the expansion of a fiber optic system and the operation of a cellular phone system by the private sector. Any significant purchase of equipment by INTEL is offered through a public tender. Main competitors for telecommunications equipment are: Japan's NEC, Sweden's ERICKSON, France's ALCATEL and Canada's NORTHERN TELECOM. No special restrictions or standards for imported telecommunication products exist. Best prospect sub-sectors (est. 1995 market size): Fiber optic equipment (US$ 6 million). PABX equipment (US$ 5 million). ----------------------------------------------------------------- Rank: 9 Name of Sector: Agricultural Machinery and Equipment ITA Code: AGM 1993 1994 1995 (US$ in millions, unless otherwise noted) Total Market Size 7.0 7.7 8.5 Total Local Production 0.0 0.0 0.0 Total Exports 0.0 0.0 0.0 Total Imports 7.0 7.7 8.5 Total Imports from U.S. 5.0 5.5 6.2 Exchange Rate 1 U.S. Dollar = 1 Balboa (Fixed Rate) Comments: The agricultural sector will expand significantly during the next few years. New government incentives such as special interest rates for capital goods acquisitions, new export opportunities for non-traditional products and increased foreign competition will lead to the modernization of this sector in order to compete domestically and internationally. The U.S. traditionally leads the market share in this sector. Competitive suppliers are from Russia, Japan and Italy. Best prospect sub-sectors (est. 1995 market size): Tractors and combines (US$ 4 million). Irrigation equipment (US$ 3 million). A. Rank: 10 B. Name of Sector: Security and Safety Equipment C. ITA Code: SEC 1993 1994 1995 (US$ millions, unless otherwise noted) D. Total Market Size 6.0 6.7 7.4 E. Total Local Production 0.0 0.0 0.0 F. Total Exports 0.0 0.0 0.0 G. Total Imports 6.0 6.7 7.4 H. Total Imports from U.S. 4.0 4.5 5.1 I. Exchange Rate 1 U.S. Dollar = 1 Balboa (Fixed Rate) Comments: The country is experiencing a significant growth in street crime and security-related problems, especially in the commercial and banking sectors. Affected establishments are protecting their building and themselves with hi-tech security systems and devices. U.S. products are preferred in the market because of their high quality, although increased competition is coming from Western Europe and the Far East. No special restrictions or standards for these products are applicable. Best prospect sub-sectors (est. 1995 market size): Alarm systems (US$ 4 million). Safety equipment (US$ 2.5 million). ----------------------------------------------------------------- SOURCES All trade statistics are from the Contraloria General de la Republica. Agricultural Sector Exports Ministry of Agricultural Development Industrial Sector Exports Building Products: Cemento Panama, Grupo Copisa Computers and Peripherals: ADR Software Apparel: Supercentro El Campeon Automotive Parts and Services: Grupo Ford Medical Equipment: Promed Air Conditioning and Refrigeration Equipment: Rapid Aire Food Processing and Packaging Equipment: Agencias Ultramar