Exporting guide to Peru
An open economy that welcomes UK business
Peru is a like-minded and open economy. The UK is the largest foreign investor in Peru, mostly in the mining sector. The UK and Peru have a broad trading relationship, UK products and services are recognised for quality and innovation. The UK Andean Trade Agreement has governed UK trade with Peru, Colombia, and Ecuador from January 2021.
High demand for UK expertise
UK goods and services have a strong market profile and are increasingly in demand following the high profile success of the UK Peru government-to-government (G2G) agreement. This helped to deliver the Lima 2019 Pan American Games – the world’s third largest sporting event – with support from UK business. In 2020 the UK signed a new government-to-government agreement with Peru for a major reconstruction programme.
Peru’s economic recovery plan
In 2020 the Peruvian government announced an ambitious post-COVID economic recovery plan worth £18 billion, opening new partnership opportunities for British business to support Peru’s green recovery.
Opportunities for exporters
Peru is the fifth largest economy in Latin America, in terms of purchasing power parity (Ernst & Young 2020). There are significant opportunities for UK companies across a wide range of sectors including mining, infrastructure, life sciences and healthcare, food and drink, automotive, security and clean energy.
Supply chain opportunities
There are UK supply chain opportunities across the mining life-cycle. Typical projects involve construction and capital goods opportunities, comprising around 40% of each project. There are also opportunities in engineering, transport and services, and management and supervision.
Size and long- term nature of opportunities
It is estimated Peru has 200 operating mines and major projects waiting to be developed, worth USD 59 billion (Ernst & Young 2019). Mining represents 60% of Peruvian exports, and nearly 10% of the GDP (MINEM, 2019). Seven out of the ten largest copper producers globally are in Peru. Mining activity is led by the private sector operating under long-term licenses granted by the government.
Seven major mining projects are due to enter construction phase between 2020 and 2024. These are Quellaveco (£4.5 worth billion), Mina Justa (£1.4 million), Corani (£0.53 billion), Tia Maria and Michiquillay (£1.8 billion), Laguna Norte (£0.58 billion), Los Calatos (£2 billion) and the Mineral Railway Project (£2.2 million).
Long term infrastructure plan with UK support
Peru launched its first National Infrastructure Plan for Competitiveness of 52 prioritised projects valued at £24 billion in September 2019, with technical support from the UK. This plan opens new partnership opportunities for the UK to support sustainable infrastructure development in Peru on a wide portfolio of projects. Different delivery models include Public Private Partnerships, public works, asset sales and the PMO model.
Reconstruction G2G project
In June 2020, the UK was selected as Peru’s delivery partner under a new G2G agreement for an ambitious reconstruction programme to rebuild crucial facilities damaged in the 2017 El Niño floods in Northern Peru and carry out flood prevention and resilience works. This project includes rebuilding 74 schools and 15 health centres.
Demand for UK infrastructure expertise
The UK’s recent success in supporting Peru with the delivery of major infrastructure projects has boosted the UK’s profile in the market. Some UK companies have recently established offices to work on projects in Peru or the wider LATAC region. UK expertise in project management, design, engineering and rail infrastructure is in demand.
Public-private partnerships (PPPs)
70% of Peru’s healthcare system is public, with a recent emphasis on PPPs to finance public infrastructure. Some key projects in the pipeline are the National Institute for Children and Adolescents (worth £130 million) and high complexity hospitals in Piura (£106 million) and Chimbote (£84 million).
The UK healthcare, life sciences sectors and healthcare system are highly respected in Peru for innovation and quality, and the universal coverage of the NHS. The UK is well placed to support Peruvian health sector initiatives and reforms as the country makes an investment of £14.4 billion to help close the health infrastructure gap. Growth areas include expansion of telemedicine and mobile hospitals for remote populations, quality elderly care and digitisation of medical records.
Growing and reforming sector
The Peruvian health system continues to experience significant reform. The Health Outlook for Latin America and the Caribbean countries recommend a healthcare investment of 6% of GDP in 2020, in line with the region’s average (World Bank, 2020). Health coverage has increased, with higher expectations of this from the population. Private clinic provision has expanded, with a growing middle class able to pay for private care.
COVID-19 has accelerated Peru’s digital transformation. Digital security is a priority, with increased demand for cyber security solutions for national critical infrastructure and in the commercial/finance sectors.
Strong brand recognition
UK companies are recognised in Peru for the innovative solutions they develop in response to the fast moving global threat landscape, as well as for their collaborative and transparent approach. For this reason, Peru is very receptive to UK solutions to a wide range of security challenges.