The end of 2005 is right around the corner and with that comes a period of evaluation, celebration and appreciation.  For Intrix it was a year of new experiences and consolidation. Intrix Brazil had successful experiences with our IEM (Interim Export Management) programs, serving the food and beverage industry.  Our new office in Chile conducted programs promoting and attracting investments in some key clusters for the Chilean economy. It was also the first year for our practice in China; recently one of our Senior Consultants was in the country confirming the enormous opportunities for the region. We developed important steps implementing the strategy in the US for our motorcycle industry clients. Our associates in UK directed a strategic study for the Brazilian plastic sector.
 
We are thankful for our progress and we certainly appreciate our clients’ confidence and international network support, without which we could not continue with our mission.  We are committed to serve you, our existing and new clients, in 2006 and we are looking forward to doing so.  Let us celebrate our accomplishments. Merry Christmas to all of you!     

The Plastic Market in the UK, Opportunities for new entrants.  The UK plastics market is one of the largest in Europe in terms of consumption for packaging and other products, which use plastic film materials. The UK production of plastic packaging products has shown steady growth since 2001, to stand at US$4.6 (£2.7) billion in 2004. The market has been registering severe competition among suppliers, and by continued efforts by large customers such as the retail giants (Tesco, Asda, Sainsbury and others) to drive down prices throughout the supply chain.

In volume terms, UK manufacturers of polyethylene film accounted for 919 000 tons of film production in 2004, continuing the trend of small annual increases in recent years. Imports have shown a stronger rate of growth since 2000, to reach 401 000 tons in 2004. Volume growth in the UK market has been fed largely by increasing import volumes.

The opportunities for new suppliers are in niche markets. Foreign companies that want to enter in the segments with more specialization will need a creative and innovative approach. They will need to take care of quality, customer service and supply reliability. They must be willing to stay close to the end-consumer to better understand the needs and tastes of Europeans. Finally they will need to manage the supply chain and establish strong links with agents and distributors. 
Collaboration of Amy Morgan, Intrix associate in UK

New Free Trade Agreement in the Region. Peru and US signed the Peru Trade Promotion Agreement (PTPA) in Washington D.C on December 7th. In May 2004, the U.S. first initiated free trade agreement negotiations with the three Andean countries of Peru, Colombia and Ecuador. Negotiations with Colombia and Ecuador will resume next year to help broaden the agreement. 

80% of US consumer and industrial products will carry 0% duty when the agreement is implemented. 7% will have duties eliminated over 5 years, and the remaining will be eliminated within 10 years. The agreement will have to be reconfirmed by the two congresses of the respective countries within 90 days.

In the case of Peruvian exports, the agreement will extend permanently the duty free advantages that already exist under the Andean Trade Preference Act (ATPA). In addition, other non-textile, industrial and consumer products will join the list immediately after the ratification.

The main US export products affected are: agriculture and construction equipment, auto parts, information technology equipment, medical and scientific equipment, and forestry products. From the Peruvian side are: the agro-industrial products such as artichokes and asparagus, apparels and textiles, poultry and meat.

The emerging markets grew strongly in 2005.  China is leading the list of the emerging economies with another flourishing end of the year. The current account surplus in the first half of 2005 was nine times bigger than a year ago. To compare we have included just other emerging economies in the region. Argentina has demonstrated a consistent recovery, which is hopeful for South America. Venezuela follows the list; not surprising considering the oil price increases of this year. Peru has been benefited mainly by the growth of foreign investors in the mining sector.  Chile has maintained its strong position with a positive trade balance.  Mexico and Brazil, the biggest economies, show the lowest growth and Mexico is the only one that shows a negative trade balance.

In 2006 the trade between China and the region will increase. Chile was the first country in the region that signed a free trade agreement with China last October.  In a country where consumer power is increasing on a fast track, having a small part of sales to the emerging middle class will be a significant market for Chile. Sectors that are expected to sell best are the agro industry, especially products such as cherries, peaches, and berries. The oils, salmon, cheeses, tomatoes paste, chocolate, poultry, meat and wood are others that expect a favorable impact.  

Almost all the countries in Latin America, except Mexico, have been favored by China's growth, the governments are working to get closer relationships and increase the trade between them. The future is still promising, China's biggest event in the global community will take place in 2008 with the Olympic Games and they are preparing comprehensively.

	% Change on year ago			Latest 12 months, $bn		Foreign Reserves*
	GDP	Industrial Production	Consumer Prices	Trade Balance	Current Account	$bn. latest
China	9.4 Q3	16.1 Oct	1.2 Oct	101.5 Oct	128.5 H1	769.0 Sep
Argentina	10.1 Q2	6.8 Oct	10.7 Oct	11.5 Oct	2.9 Q2	24.8 Sep
Venezuela	9.8 Q3	12.4 Sep	16.0 Oct	28.2 Q3	21.6 Q6	26.4 Aug
Peru	5.7 Sep	6.0 Sep	1.3 Oct	4.3 Sep	0.4 Q2	12.7 Oct
Chile	5.2 Q3	4.2  Oct	4.1 Oct	8.7 Oct	-0.2 Q3	15.0 Oct
Mexico	3.3 Q3	1.0 Sep	3.1 Oct	-9.5 Oct	-8.4 Q3	69.9 Sep
Brazil	1.0 Q3	0.2 Sep	6.4 Oct	41.9 Oct	13.0 Oct	59.7 Oct

* Excluding gold

Source: The Economist