Pacifico The Power of Free Zones, Special Economic Areas and Strategic Business Centers in Panama Where we are TRENDS • Implications of Canal Expansion • FTAs • Increased trade of commodities – Exports to Asia (, , , etc.) • Cold Storage • Sustained growth of Required Actions

• Government focus on improving infrastructure • Public‐Private partnerships – Qualified labor force • Aligning all actors of the logistics chain –Improve import and export processes ‐ Modernizing Customs • Increase connectivity • Regional Trade and Border Control Alliances • Emphasis on Specialized economic areas: – Focus on cluster development of targeted industries Panama: Platform to the World Business Community

Panama Canal, the main international trade A state‐of‐the‐art port system operates in engine. Moved 6.6 million TEUs in 2011. both the Pacific and Atlantic shores

A network of highways and roads connecting A railroad that connects both oceans in 1 hour both shores and handles over 350,000 containers each year. PORT INFRASTRUCTURE Panamanian seaports have demonstrated a sustainable growth on container movements becoming the leading seaports in Latin America and the Caribbean, as per CEPAL’s ranking for 2011 . TEU Movement of Panamanian Ports 4,000,000

3,500,000

3,000,000

2,500,000

2,000,000

1,500,000 TEU 2009 TEU 2010 TEU 2011 Colon (MIT, Evergreen, Panama Port) Balboa

Port TEU 2009 TEU 2010 TEU 2011 Var. 2011/10

Colon (MIT, Evergreen, Panama Port) 2,210,720 2,810,657 3,371,714 20,0% Balboa 2,011,778 2,758,506 3,232,265 17,2% ATLANTIC HUB

Statistics: 3,371,714 TEUS in 2011 Capacity: 7.7 million TEUs 35 quay cranes 16 berths 88 RTGs Manzanillo International Terminal

Colon Container Terminal Panama Ports Company ‐ Cristobal Balboa Port Operated by Panama Ports Company

Moved 3,2 million TEUs in 2011 Plan: 22 Cranes 8 Panamax 10 Post Panamax 7 Super PostPanamax

Expansion: 30 hectares 5 boats/day, 45/50 weekly Connected with MIT, Cristobal, and CCT by railroad

During the first quarter 2011, Balboa has increased a 32.6% the number of teus handled compared to the same period in 2010. Increasing rates are shown in the following quarters, even by the end of 2011 that reflected a growth of 10.7% by Source: Georgia Tech Logistics Portal comparing both periods. Rodman Port: Operated by PSA Maximum Capacity: 2,2 milllion TEUs

Today: 3 Panamax Cranes Expansion: 10 Cranes Current Capacity: 150,000 TEUs

Container Berths: 1 Quay lenght (m): 330 Area (ha): 22.5 Max depth at chart Datum (m): 14.5

In‐Bond Railway Station Port‐to‐Port Transshipment Operation Approximate travel time between terminals 1.5 hours Current trains/day each direction 10 Potential trains/day each direction 32 Average containers per trip 100 Current container handling capacity 650,000 containers/year Max container handling capacity 2,000,000 containers/year STRATEGIC LOCATION FORMER AIR FORCE BASE

• Operated as Howard U.S. Air Force Base until 1999

• Government hired the World Bank to perform a two year search for a Master Developer

Law 41, 2004 April 2007: July 2007: The created the London & AAEEPP signed Panama Pacifico Regional MDC with LRP; January 2008: Special Panamá was December LRP began Economic Area awarded the bid 2007: Master development and the for Master Plan was AAEEPP Developer approved MASTER DEVELOPER

•Joint‐venture between Southstone Investment and UK‐based London & Regional Properties. • London & Regional Properties has over $20 billion in assets across three continents. • Southstone owns 130 companies worldwide, in banking and finance. •Awarded the bid to master develop in 2007 as part of the public‐private partnership. •Started construction November 2008; $215 million in development as of May 2012. • $405 million in development by 2015. SPECIAL ECONOMIC AREA

9 An Economic regime designed to

Government attract new direct Foreign Agency APP Investment into Panama

‹ Site Characteristics

Master Simplified z Large, integrated site Developer: Procedures LAW 41 OF L&RP z Mixed‐use community 2004 BEST PRACTICE z Very low or no taxes for LABORATORY targeted activities

z Best Practice Laboratory Special Master Plan: z Simplified procedures Economic Mixed use Area Status development z Flexible zoning, land use SPECIFIC BUSINESS ACTIVITIES MULTINATIONAL COMPANIES 130+ ONSITE COMPANIES • 3PL Panamá • GMP Pacifico Architects • Panamericana de Logística • Acqua Clean • Garal Bravetek • Petróleos Independientes de Panamá • Agencia Aduanas Sellhorn • Gateway Transit • Primo Scientific •Aggreko • Gianfranco Agency •Proex •AirPro • Global Cold Chain System • Quality Freight Corp •Albacrome • Global Profile • Radio Holland • Alliance Transport Logistics • Global Tunnelling Experts • Realtime Automation Solutions • Alpha Marine Group •Grainger • River Canarias • Arsenal Industries • Green Ivory International • Rozo & Company (Panama) • Ascon • Grudenthal •ST Aerospace • Associated Steamships • Herrenknecht • Sirenis Premium Travelers Inc. • AtlasCopco • Hidropana • Stratus Building Solutions • Barwil Agencies • Hi – Tek Marine •Thermaflex • Bombasa • I.P. Leather Corporation • Trade Service Panama • Boyd Steamship Corporation •IT Lab • Transcanal Agency • C.B Fenton & Company • IntelData • Transformer Industries (CAIVET) •C. Fernie& Co. • KIO Networks • Trucks Logic • Cable & Wireless • KPMG •VaultMax • Cabo Drilling Corp • Kings Ocean Services •VT Shipping • Cargotec • Marine Engineers Corp • Valor Consulting • Canal Transit Services • Mamphara Consulting Services • W.R. Grace • Cochlear • Metro Service Logistics • Ware Malcomb •Codico • North American Aircraft Services • Wartsila • Consultores Urbanos • Norton Lilly • Wilhelmsen Ship Services • Covidien •Nuctech • Wollschlaeger • Citibank • Orica Mining Services • Yermont Enterprises • Dynamic Logistics •Osala • Edificar Panamá • Quinyx Development • Escharch Panama •PROMIX • Eternity International Freight • PanCo Contruction Consultants • Express Care • Panama Canal Port Service • Flavor Infusion • Panama Pacific Logistics ONSITE COMPANIES BY INDUSTRY

Call Center High tech‐ software Offshore services 1% development 2% Data transmission 2% Backoffice 5% 2% Light manufacturing and Distribution Maritime 11% 20% Logistics 16%

Retail Professional services 14% 11% Other services 7% Aviation services Regional HQ of 4% Multinationals 5% LOGISTICS CLUSTER Over 13 Logistics companies in Panama Pacifico ‐ Storage and distribution facilities ‐ Packaging, restocking, and light manufacturing services ‐ Land Freight, local transportation services ‐ Value Added Services (labeling, printing, ticketing) ‐ Logistics consulting ‐ Air Freight ‐ Cold Chain Logistics ‐ Order picking, Inventory Checking ‐ Dispatch

Atlas Copco; Dynamic Logistics; Eternity International Freight; Osala; Panamericana de Logística; Trade Service Panama; Metro Service Logistics; Panama Pacific Logistics; Quality Freight Corp; Trucks Logic; Alliance Transport Logistics; Global Cold Chain; WWL Pacifico S.A.; 3PL Panama CASE STUDIES

Distribution Facility for Latam Sea and Air Freight

Merchandise: disposable medical supplies, medical equipment, healthcare Inbound and Outbound: Approximately 250 containers imported and exported yearly Origin: 90% out of US (west coast) and the other 10% between Asia and Europe Destination: Central America and Andean Region CASE STUDIES

Third Party Logistics Operator Sea and Air Freight

Local operation: 20 permanent clients. Industries: Electrical, Electronic, Pharmaceutical, Construction, Consumer products, Manufacturing. Statistics: Approximately 220 containers annual import and 280 containers annual export. Import and Export destinations include: Europe, Asia, Central and South America. Manufacturing: Mixed projects, 3PL offers clients the possibility of installing production lines. 3PL controls inventory for both raw material and finished goods, allowing clients to dedicate resources to producing and selling. MANUFACTURING CLUSTER Over 11 manufacturing companies in Panama Pacifico

‐ High‐Technology Process Manufacturing ‐ High‐Techonology Product Manufacturing ‐ Laboratories

Manufacturing facilities: 3M, Albacrome, Green Ivory, Samtec, Flavor Infusion, BASF, WR Grace, Bombasa, PSA Tapes, Panamlam, Hidropana, Wartsila CASE STUDIES

Printing Manufacturing Facility for Latam Sea and Air Freight

Merchandise: Magazines, books, and other printing materials. Statistics: Approximately 120 containers imported and exported yearly; projected growth of 180 containers Imports: USA and Europe Exports: Central America and Caribbean region; PR and DR Employees: 144 with expected growth CASE STUDIES

Manufacturing Facility for World Automotive industry Sea and Air Freight

Type of Business: Manufacturing Company. Merchandise: Paint Application System Products. Abrasive Discs Material. Statistics: Approximately 90 containers imported and exported yearly. Imports: 100% raw material from US. Exports: America, Europe and Asia. MARITIME CLUSTER Over 22 Maritime Companies in Panama Pacifico

Maritime Services to Ships and Passengers ‐ Maritime‐Cargo Services ‐ Shipping Agencies and representatives ‐ Shipchandlers ‐ Ship suppliers ‐ Repair and Maintenance of parts

Associated Steamships; Alpha Marine Group; Barwil Agencies; Boyd Steamship Corporation; C.B Fenton & Company; C. Fernie & Co.; Canal Transit Services; Gateway Transit; Hi – Tek Marine; Panama Canal Port Service; Rozo & Company (Panama); Transcanal Agency; VT Shipping; Eternity International Freight; Gianfranco Agency ; Kings Ocean Services; Marine Engineers Corp; River Canarias; Wartsila; Wilhelmsen Ship Services; Yermont Enterprises; MEC Future Projections

Corozal • Expected growth of 20% annual increment in TEUs to continue • Pacific could receive 6 million TEUs by 2017

Corozal: Port or Logistics Area?

Farfán: New Port on the west Farfán side?

Prepare to Add Value! CONECTADOSA Legacy POR NATURALEZA for all of Latin America