Market Entry - Seed Coating Industry in Peru: Analysis of Growth, Trends and Progress (2016 - 2021)

About the Market

The demands for progressive multifunctional seed technology to avert decreasing acreage and increase seed performance are driving the market. Amongst the various types of seed coating materials, polymers accounted for the largest market share, followed by pellets and colorants. The cereals and grain segment held the largest market share for seed coating materials, followed by oilseeds. Europe and North America are the top two consumers of seed coating materials and account for more than 55% of the market, with BASF SE (Germany) and Bayer Crop Science AG (Germany) being the key players in the market. Growth is particularly high in developing countries, such as China, India, and Brazil as agriculture is a major contributor to the economy and there is an increase in the demand for production.

About the Geography

Peru is located on the west coast of South America and has a republican presidential government. It has a young population with median age 25.9 years and has a workforce of 16.8 million. Peru has been voted the second safest country to do business with in Latin America by Bloomberg, due to low risk and a consistently improving credit score.

Peru is committed to free trade and is strategically positioned as a regional transport hub and Brazil’s gateway to Asia. Peru's FDI comes primarily from Spain, the United States, and Great Britain. The most appealing points in terms of FDI are the low cost of wages and the non-restrictive policy concerning dividends. Foreign investment in Peru is governed by the 1991 Promotion of Foreign Investment Law and the Framework Law on the Growth of Private Investment, 1991, which establishes equal treatment of national and foreign capital. PRO inversion was established by the government in 2002 and is the sole representative of current and future investors, which took part in the privatization of public companies and industries based on natural resources. Peru has also signed the constituent agreement of the International Center for Settlement of Investment Disputes (ICSID). Foreign capital can be invested in all sectors of economic activity without prior authorization, except for a few sectors, such as the press, or implantations in border zones.

There are several challenges like corruption, bureaucracy, dispute with the native population over natural resources, language barrier, and technology. Peru’s policies allow foreign-owned companies to setup corporation, closed corporation, limited liability company, branch office, joint venture, distributor, or public corporation type company.

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