CLUSTERS IN MENDOZA MINISTRY OF PRODUCTION TECHNOLOGY AND

CLUSTERS IN MENDOZA MINISTRY OF PRODUCTION, TECHNOLOGY AND INNOVATION Mendoza Government Argentina

Presentation Summary 1. 2. 3. 4. 5. General Information about Mendoza Productive Mendoza Program Goals of the Clusters Promotion Subprogram Clusters Types ( agri-food/and industrial) Cases: Wine Cluster / Oil Industry Cluster

General Information about Mendoza Population: 1. 693. 261 inhabitants Surface: 148. 827 Km 2 Climate: Mean Minimum Temperature: 15, 8° C Mean: 18, 5º C Mean Maximum: 21, 5º C Ventajas comparativas de Mendoza Relative Humidity: 50% Average number of sunny days per year: 250 days Climate: Warm and arid Gross Geographic Product (GGP) per capita: U$S 5. 857 (año 2007) Average GGP in 5 years: 12, 12% Growth in 2007: 8, 8% Expected in 2008: 7%

Mendoza Gross Geographic Product 2007

Infrastructure Productive Mendoza Financing Technicalprofessional Training

Productive Mendoza Program CLUSTERS Promotion Subprogram Goals • Increase valuable chains´ competitiveness. • Begin a changing process with local clusters´ firms. • Create a shared vision of future through joined actions.

Technical Management Unit IRCs Competitiveness Reinforcement Initiatives (Financed by BID and Mendoza Government ) Strategic Committee Function: It assesses and declares IRCs (Competitiveness Reinforcement Initiatives) Eligible or non-eligible Minister of Production, Technology and Innovation Secretary of Tourism Undersecretary for Industrial, Technological and Services Promotion Undersecretary for Agri-food Programming and Quality Management Group Function: It supports the firms of each Cluster in the making of the IRCs (Competitiveness Reinforcement Initiatives) Subprogram Manager Management Assistant Clusters Specialists Market Specialists

• • AGRI-FOOD CLUSTERS WINE OLIVE OIL • FRESH FRUIT • FRESH VEGETABLES • PRUNE

Wine Cluster Industry Description in Argentina • 8 th grape producer in the world • 5 th wine elaborator in the world, with 15. 5 m hl. • 2, 6% of world surface of vineyards, with 210. 000 ha. • 950 wineries, which amount to 20% of the total of industries in Mendoza and San Juan. • 93% of the vines are located in Mendoza and San Juan. This industry provides 50% of agricultural GDP in Mendoza and San Juan • 2, 5% of Argentine exports in the Industrial and Agricultural-livestock Manufactures sector.

Wine Cluster Industry Description in Argentina • US$ 1. 300 m a year. (65% from domestic market) • 22. 000 producers and 45. 000 workers employed in primary production. • Investment in this industry over the last 5 years amounts to US$1. 551 m • 38% is from National capital and the main investors have been Chile, USA and France.

Cluster Vitivinícola Descripción del Sector . • Mendoza is part of the eight great world capitals of the Wine World together with: • Bilbao-Rioja, • Burdeos, • Cape Town, • Florence, • Melbourne, • Porto • San Francisco-Napa Valley

Wine Cluster IMPLEMENTED TECHNOLOGY

Wine Cluster Factors that gave way to the evolution ´ wine cluster 1 - Process of reform and seizing of emergent opportunities 2 - Provincial development strategies (creation of specific organizations for industrial development support) 3 - Development of local systems for local innovation.

Wine Cluster Local systems for innovation • Network of specialized suppliers • The existence of a basis of industries that assist wine industry • Technological knowledge These were the bases that enabled these networks of suppliers to evolve together with the industry.

Wine Cluster Evolution Technical change process: • Wine Presses • Label suppliers • Metalworking industry: sorting tables, de-stemming equipment, crushers, special pumps, packing lines, fractioning and bottling lines, transporting lines, etc.

Wine Cluster Research and Technological Development

Wine Cluster Viticulture and Oenology Program for Integration of Wine Clusters in the Andean zone – Project (PITEC) • We plan to work in: technological and market information, Centers for Viticulture, Traceability and Quality Development Project Creation, transfer and dissemination of knowledge to strengthen Argentinian Vitiviniculture – • We are planning to create, transfer and spread scientific and technological knowledge. Project PAE Vineyard Management System to optimize quality and yielding. Development of Grape Quality Standard • Development of Vineyard management technology and quality standards to guarantee high quality grapes intended for wine elaboration.

Wine Cluster Concentrated Grape Juice Technological improvements for the development in primary production for the Concentrated Grape Juice industry Training for elaboration of Concentrated Grape Juice • We are working on technology transfer in the primary production of Concentrated Grape Juice. • 1000 professionals in wineries of Mendoza and San Juan and 1000 workers will be trained on the processes and care in the elaboration of Concentrated Grape Juice. 500 trained wineries

Wine Cluster Challenges ØIncreasing investment in wineries to improve the quality of wine and facilities. ØIncorporating good practices in crops to improve the quality of grapes ØPromoting vertical and horizontal integration of the whole productive chain. ØLa promoción de la integración vertical y horizontal de toda la cadena productiva. ØImplementing new technologies. ØInternational negotiation with other countries and blocks ØOur country’s identity and brand.

• • INDUSTRIAL CLUSTERS GRAPHIC SERVICES OIL INDUSTRY SERVICES • TEXTILE CLOTHING • AERONAUTICAL • METALWORKING

Oil Industry Cluster Industry Description • Oil Services employ nearly 5. 800 people. • 125 companies, 73% of them linked to the upstream and the remaining 27% to the downstream. • 65% of the firms that belong to the oil industry are Small Business • 6% in terms of sales. • Several components of the metalworking industry can be considered as part of the Power Services Cluster. This industry employs nearly 6. 200 people and is comprised by 700 firms.

Oil Industry Cluster Sector

Oil Industry Cluster Description • The companies in the industry have a shared history in stateowned YPF and State Gas. • Vertical integration of all services and products associated to all the links of the oil and gas chain. • Repsol-YPF keeps leading oil export in Mendoza • Petrobrás is another company working

Oil Industry Cluster • This industry presents diversity in offering • Specific Products and Services for the Oil Industry • Products and Services for the Oil Industry applied to other Markets • Products and Services for Industry

Oil Industry Cluster Development and Research

Oil Industry Cluster Public Sector: Alternative Sources of Energy The trend towards the use of renewable energy is fostering, from the National Government, Science and Technology Bodies, Universities and companies, the development of alternative fuel. IMPSA is venturing into the research and development of new products for this field and particularly in wind power generators. Aeolian energy BIODIESEL AEOLIAN ENERGY

Participation in Río Oil and Gas Fair Participating in this event will enable a new vision of the commercial potential of the Latin American Market translated into business flow Furnishing of a rural house with alternative measures for energy production for its assessment Solar Heaters Energy Sustainable House Manufacture of water heaters for sale. Production of micro-seaweed to extract oils and obtain biofuel. Biofuel

Oil Industry Cluster Opportunities • Increasing international demand for oil and energy services • Growing domestic demand for energy • Growing interest in renewable energy and alternative fuels • Potential synergies between power services and farming industry (biodiesel) • The present world context

Mendoza Government Argentina Minister of Production, Technology and Innovation Guillermo Migliozzi www. mendoza. gov. ar Contacto: gmigliozzi@mendoza. gov. ar