Published on February 22, 2014
February 2014. All Rights Reserved. The facts of this report are believed to be correct at the time of publication. Please note that the contents delivered are based on information gathered in good faith from both public and proprietary sources. As such, CINDE’s Department of Research can accept no liability whatsoever for loss or damage arising as a result of the use of this report, either in its published or online format.
Costa Rica: Upgrading in Global Value Chains
Agenda Costa Rica at a Glance Costa Rica’s MD Sector in the Global Value Chains Get to Know Us Better Q&As INVESTING IN COSTA RICA
Costa Rica at a Glance
Costa Rica’s Key Indicators 2013 Location Central America Time Zone GMT-6 Population 4.7 million Labor Force 2.2 million Adult literacy rate 96.20% Unemployment rate 8.50% Inflation rate 3.70% GDP GDP per capita PPP US$48.5 billion US$12,874 Sources: INEC, BCCR, IMF, United Nations, 2013.
Consistent Growth of Foreign Direct Investment and Exports 2013e: US$ 2.3 billion Costa Rica: Total FDI 2.5 • 1.5 • FDI inflows have grown an average of 13.3% every year since 2002. FDI per capita reached US$488 in 2013. 1.0 0.5 0.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total Exports of Goods and Services US$ Billions US$ Billions 2.0 20 18 16 14 12 10 8 6 4 2 0 16.7 17.5 2012 2013 15.5 12.9 13.7 12.3 13.8 11.2 7.2 2002 8.1 8.5 2003 2004 9.6 2005 2006 2007 Goods 2008 2009 2010 2011 Main Destinations in 2013: • United States (37.9%) • European Union (17.8%) • Asia (14.6%) • Central America (14.0%) Top High Tech Exported Products in 2013: • Electronics components for microprocessors (20.9%) • Precision and medical equipment (13.8%) a/ • Electric cables (2.3%) Services Source: BCCR, Procomer, 2014. Note: a/ This sector comprises IV sets, medical prosthesis and other medical devices e Estimated by BCCR
Innovation: IP Protection: • Strategic location: • • • 1st in Latin America in Global Innovation Index (39th in the World) (INSEAD, 2013). 1st in Latin America in Innovation and Business (WEF 2013-2014). 3rd in Latin America in the International Property Rights Index (Property Rights Alliance. IPRI 2013). • Close proximity to the USA, with more than 120 flights worldwide daily. Access to both oceans. The Right Conditions For Your Company: Competitive Business Climate Stability: • • • Safest Country in Latin America (Latin Business Chronicle, 2013). 1st in Latin America in the Quality of Labor Relations (WEF 2013-2014). 2nd in Latin American in Political Stability (World Bank 2012). Tax incentives offered by the Free Trade Zone Regime: • • • Exemption on corporate income tax. Exemption on withholding tax, royalties, fees and dividends with no time limit; & local sales tax. Duty-free imports & exports. Solid Utilities Infrastructure: • More than 90% of electricity is generated from renewable sources.
Exceptional Access to the World’s Greatest Markets a/ • Market access: 2.5 billion people and 64% of worldwide GDP EFTA EUROPEAN UNION CANADA UNITED STATES MEXICO • 87% of exports of goods covered by FTAs • Investment Promotion and Protection Agreements with 14 countries CENTRAL AMERICA PANAMA DOMINICAN REPUBLIC CARICOM COLOMBIA PERU CHILE Preferential access Note: a/: European Free Trade Association CHINA SINGAPORE
Best Educational System in Latin America Second in Talent Retention in Latin America and 15th Worldwide (WEF, 2013-14) (WEF, 2013-14) Highest English Proficiency in Latin America First in TOIEC and Second in TOEFL (ETS, 2012) Impressive 430% increase in university graduates between 1991 and 2011 (Jofré, 2013) Tertiary Enrollment has undergone a twofold increase in 6 years . Between 20052011 the enrollment rate increased almost 20 percentage points (WEF, 2013-2014) Our Labor Force: An Engine for Development First in Latin America in Availability of Scientists and Engineers (WEF, 2013 -14) 16 Technical and University initiatives carried out over last 3 years in High-Tech Manufacturing plus additional HR initiatives (CINDE, 2014) High number of people certified in: 5s, SixSigma, Lean Manufacturing, ISO 13485, ISO 9001:2003, ISO 14000 Government invested US$450 million in Human Capital Initiatives in 2013 (IADB, WB) Costa Rica Multilingual A comprehensive program to become a bilingual country by 2017
Costa Rica’s MD Sector in the Global Value Chains
Costa Rica: A Growth Platform for Medical Device Companies Key Facts 2nd largest exporter of medical devices in Latin America. 7th Supplier of Medical devices of the United States. Presence of 5 global cardiovascular leaders. Manufacturing PMA Class III devices. Exporting finished goods to worldwide markets. Product Upgrading High Quality Medical Devices Making Increase in product complexity, from disposables to instruments Quality culture has helped and therapeutic devices. manufacturers to meet and satisfy performance metrics, FDA and other international regulatory body requirements. Forward & Backward Linkages 2009-2012 upstream (inputs) and downstream (sterilization) firms established. Increased in capabilities & domestic value-added.
Sophistication of Operations Low cost labor Supply chain Manufacturing Assembly Design and engineering Access to highly Skilled labor pool Research & Development MD Value Chain •Distribution •Manual through fully automated Assembly •Procurement •Packaging •Shared Services •Sterilization •Silicone & Plastic Extrusion •Plastic & Extrusion Molding •Precision Metalwork •Weaving/Knitting Textiles •Tipping Source: CINDE, 2014 •Product Design, Verification & Validation •Process Design, Verification & Validation •Automation •Protocol Validation & Verification •Regulatory submission and documentation •Prototyping •Sustaining Development
Evolution of Costa Rican MD Exports Costa Rica: Medical Devices Exports US$ millions 1,500 1,200 900 600 300 0 Disposables Medical & surgical instruments Therapeutics devices Source: CINDE based on data from PROCOMER, 2014 Diagnostic equipments
Neuroendovascular Neuromodulation Cyberonics (CYBX) 2012 Dental Align Technologies (ALGN) Smith Sterling 2001 1994 MicroVention –Terumo (TYO:4543) 2011 Optics CooperVision (COO) 2012 Aesthetics Surgical Devices De Royal Koros USA 1996 2007 Cardiovascular/Vascular Abbott Vascular (ABT) Boston Scientific (BSX) Covidien (COV) St. Jude Medical (STJ) Volcano (VOLC) 2010 2009 2011 2010 2010 Allergan (AGN) Establishment Labs. 1999 2009 Endoscopy Boston Scientific (BSX) Horizons Intl. 2004 2005 Women’s Healthcare Medication Delivery Systems Baxter (BAX) Hospira (HSP) Moog Medical (MOG) 1987 1999 2009 Amoena Bayer (BAYN) Bio TD Hologic (HOLX) Orthopedics/Sport Medicine/ENT ArthroCare (ARTC) MicroPort Wright Medical (WMGI) *Year of establishment in Costa Rica 1996 2012 2012 2004 2002 2013 2010
We are Committed to Support the Growth of MD Companies FDI made by the sector (US$ million) New (first year investment) Reinvestment 361.8 166.3 157 95.5 96.4 28.0 2009 2010 51.2 8.1 2011 2012 Since 2009, on average 81% of FDI in medical devices sector takes place after the first year Source: CINDE based on data from annual companies' certification, 2013
Contract Manufacturers Exceptional Opportunity for Suppliers: Enhance their Capabilities and Product Offering Medical Suppliers Sterilization Electronics Metalwork Metalwork Molding & Extrusion Special Finishings Electronics Packaging Clean Room Services & Supplies Wire & Guidewire Assembly Resins & Polymer Materials
Get to Know us Better
How Can You Get To Know Us Better? With over 30 years of experience, we are devoted to promoting Costa Rica by: • Come on a business agenda. Visit with industry peers to discuss experiences and opportunities. • Participate on activities organized by CINDE in our upcoming roadshows to the US and Europe. • Participate on industry events organized in Costa Rica, such as the Life Sciences Forum. • Call us, email us!! We will be happy to help!
Contact Us CINDE Costa Rica Toll free number from US: 1-877-992-4633 email@example.com Ph: (506) 2201-2800 Fax: (506) 2201-2867 firstname.lastname@example.org CINDE New York Ph: (212) 984-0631 Fax: (212) 220-6499 www.cinde.org
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