argentina
ARGENTINA
1899 Preston White Drive, Reston, Virginia 20191 (703) 264-7200 © PRIMIR/NPES 2008
INTRODUCTION In today’s global business, print faces constant change and multinational challenges. In order to react intelligently and be proactive printing industry business leaders urgently need worldwide data to reference when making internationally-based business decisions. PRIMIR recently released a series of three reports on the “World Wide Market for Print.” Pira International was commissioned to investigate the key global print markets. This study identified 51 country markets that make up 99% of the global commercial printing industry. The series of reports detail social and economic climate in each region, demographic profiles, advertising trends, internet usage/adoption, print markets and applications, print process share, and market sizing for presses, equipment, consumables and paper. Forecasts are provided through 2011. The report that follows is a summary of data and information from all three reports pertaining to this specific country. Note: Unless otherwise noted, the data is presented in U.S. Dollars, taking into account forecast rates for GDP growth and inflation, constant 2006 exchange rates have been applied. The final report includes a database where statistics are provided for both current and constant U.S. Dollars as well as in local currency (both current and constant).
ARGENTINA - OVERVIEW By area, Argentina is the second-largest country in Latin America, equivalent to the size of the USA east of the Mississippi river. With a population of 39.1 million, it is the fourth most populous country in Latin America, after Brazil, Mexico and Colombia. Its GDP, of US$182 billion at the end of 2005, is US$100 billion lower than it was in 2000, owing to a severe economic crisis, which reached its trough in 2002, when GDP declined to US$98 billion. GDP per capita followed a similar course, standing at US$5,369 in 2006, more than double the 2002 figure of US$2,597.
In common with the rest of Latin America, Argentina is a heavily urbanized nation, with 86% of its inhabitants living in towns and cities – of whom one-third reside in Buenos Aires, now a city of 13 million inhabitants – and 14% in rural
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areas. The literacy rate remains high at 97%, one of the highest in the region. Life expectancy, at 75.5 years, is also high in regional terms; in neighboring Brazil, for example, it stands at 72.1 years. Unique to the region, Argentina has an extremely varied cultural mix, consequent upon the many waves of immigration into the country over the last two centuries. Immigrants came from Europe, the Middle East and Latin America.
The Republic of Argentina is divided administratively into 23 provinces and one autonomous region (the Federal Capital). There are two main political parties, the Justicialist (Peronist) party and the Radical Civic Union (UCR) party. Current president Nestor Kirchner (Peronist party), former governor of Santa Cruz, took office on May 25, 2003, after a decisive election victory. On assuming office, the economic downturn was easing somewhat, which has allowed him since to concentrate upon consolidating his political strength and alleviating social problems. In October 2005, he won a major victory in the legislative elections, giving him a strengthened mandate and a stronger position in the Senate and Chamber of Deputies. He will now focus, from a position of strength, on setting Argentina's economic course and consolidating the economic recovery of the past three years.
Other issues his government must tackle include the still-weak Central Bank, which suffers from a lack of independence, and the long-trailed reform of the provinces, that has not yet been completed. Although the government's broad policy remains one of allowing private initiative to operate, President Kirchner’s government has said it will increase the role of the state in an effort to boost economic growth and recovery.
On the diplomatic front, relations with neighbor Uruguay remain tense, following Uruguay’s decision to site two cellulose plants across the Uruguay river from Argentina. The sitings continue to be disputed by Argentina on environmental grounds, even after the recent ruling by the International Court of
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Justice to allow construction to go ahead. In addition, the area where Argentina, Brazil and Paraguay converge, often called the ‘unruly region’, continues to present a headache to the government, as it seeks to rid the zone of its criminal activities: money laundering, smuggling, and illegal trafficking of narcotics and arms.
DEMOGRAPHIC TRENDS The median age of the population is 29.2, slightly higher than in most other Latin American countries, reflecting, in part, the low population growth rate of 1.05%. Conversely, the proportion of 25 to 64 year olds in the population, at 46.6%, is lower than in other countries in the region, giving Argentina an older population profile. This trend is forecast to continue through to 2050, by which time the proportion of 15 to 24 year olds will decline from 17.8% in 2005 to 12.2%. There has been a big improvement in social conditions over the last few years in Argentina. By the end of 2005, the poverty rate had declined to 34% from its 2002 peak of 57%, and extreme poverty had more than halved to 12%. Other social indicators, such as secondary school enrollment (compulsory) and completion rates, as well as formal health insurance coverage and the infant mortality rate (now down to 16 per 1,000), have also seen impressive improvements in the past few years. These results have been helped by direct public intervention through the Heads of Household Program, which provides cash transfers to the unemployed. The labor market, though, remains highly segmented, with a widening gap between formal and informal sector wages.
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Figure 1 Argentina: Long-term Demographic Trends by Age Group, 2000-2050 0-14
15-64
65+
Total population
70
60,000
60
51,382
50,000
50 % population
40,000 36,896
65.3
40
63.3 30,000
30
28.0
62.1 22.0 19.0
17.7
20
20,000
Total population ('000s)
46,115
12.7 9.9
10,000
10
0
0 2000
2025
2050
Source: United Nations
ECONOMIC TRENDS Economic activity continued to expand at a strong pace in 2005, at an average quarterly growth rate of 9.2%, making it the strongest year of economic growth since Argentina's economic recovery began in March 2003 (between 2002 and 2005, annual growth has been between 8% and 9%). The growth is driven by exports, industry, construction and tourism. For 2006, annual GDP growth is projected at 7.3%.
In 2005, however, inflation more than doubled during the course of the year, ending the year at 12.3%. Industrial capacity, which was sufficient for the first two years of Argentina’s rapid recovery, was squeezed, as domestic (and foreign) consumers demanded more goods. A lack of substantial investment, moreover, failed to adequately expand capacity in order to increase supply, and thus mitigate inflationary pressures.
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Encouraging investment, which expanded by 22.7% in 2005 (down from 34.4% in 2004) will be crucial in laying the foundation for a sustainable growth cycle – and in easing the inflationary pressures. Unfortunately, investment to date will not prove sufficient to do so in 2006. As a result, inflation will remain within the 11% to 14% band for the year. It did fall to 11% at the end of June 2006, a result of the government's efforts to dampen price pressures through price agreements with industry and retail groups and a temporary ban on meat exports. While real wages in the informal sector remain depressed, formal private sector real wages are rising rapidly, and labor markets appear to be tightening. Unemployment has continued to decline on the back of the economic recovery – from 20.4% in early 2003 to 11% in March 2006.
Table 1 Argentina: Key Economic Indicators, 2003-2007 Indicator Population ('000s) Exchange rate (=US$1) Purchasing power parity (=US$1) GDP (local currency, millions, current prices) GDP (local currency, millions, constant 2000 prices) GDP (current, US$ million) GDP, PPP (current, US$ million) GDP per capita (US$) GDP per capita, PPP (US$) GDP growth (%) GDP deflator (%) Consumer price index (2000=100) Imports (US$ million) Exports (US$ million)
2003 37,996 2.95 0.86 375,910
2004 38,370 2.95 0.91 447,644
2005 38,747 2.93 0.98 532,268
2006p 39,137 3.09 1.12 649,096
2007f 39,531 3.17 1.26 769,446
263,387
287,092
313,505
336,390
349,846
127,643 432,881 3,359 11,393 8.8 10.5 141.3 13,834 29,566
151,958 484,377 3,960 12,624 9.0 9.2 147.5 22,445 34,550
181,662 533,722 4,688 13,775 9.2 8.9 161.7 28,688 40,013
210,147 567,313 5,369 14,495 7.3 13.6 183.8 n/a n/a
242,816 599,257 6,142 15,159 4.0 14.0 209.4 n/a n/a
Note: p=projected; f=forecast Source: Pira International, Ltd calculations from the United Nations (population data), International Monetary Fund (economic data)
THE MEDIA ENVIRONMENT There are an estimated 1,260 print publications in circulation in Argentina, around 90% of which are consumer titles, with the rest being business-tobusiness. The vast majority (96%) of purchases occur at the retail level, with just
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2-5% of readers opting for annual subscriptions. Total advertising expenditure reached over US$3 billion in 2005, a quarter of which was devoted to magazines and just under three quarters to newspapers. The remainder, about 3% of the total, was devoted to Internet advertising, which, though still small, is beginning to grow at a faster pace than before. Colombia and Argentina are the only countries in Latin America to see a growth in newspaper advertising market share since the beginning of the decade.
Some of the more important newspapers in Argentina include Clarin, La Nacion, Pagina 12, La Razon, La Prensa, and the Buenos Aires Herald. Daily newspaper circulation, according to UNESCO, is at 135 per 1,000 people. This compares to 61 in Brazil, 115 in Mexico, and 206 in Venezuela.
Table 2 Argentina: Advertising and Print Media Trends, 2000-2004 Advertising media Above-the-line advertising (media sales) Total advertising expenditure (US$ million) Print advertising expenditure (US$ million) Newspaper advertising expenditure (US$ million) Magazine advertising expenditure (US$ million) Outdoor advertising expenditure (US$ million) Print's share of advertising expenditure (%) Internet advertising expenditure (US$ million) Newspaper trends Number of dailies Circulation of dailies ('000s) Magazine trends Number of consumer titles Number of business-to-business titles
2000
2001
2002
2003
2004
3,409.7 1,532.0 1,147.3
4,997.6 1,689.6 1,242.3
1,396.0 486.8 384.2
2,229.9 725.1 602.2
2,836.2 912.7 731.9
261.4 123.3 44.9 n/a
329.4 117.9 33.8 n/a
70.0 32.6 34.9 n/a
122.9 n/a n/a n/a
180.8 n/a n/a n/a
109 2,200
112 n/a
122 n/a
181 n/a
182 n/a
942 128
895 112
328 70
685 67
917 117
Source: World Advertising Trends, World Press Trends, World Magazine Trends
There are approximately ten million Internet users in Argentina, a penetration rate of almost 25% and an impressive rise from the 3.9% penetration rate in 2000. Such a penetration rate is perhaps surprising, however, as fixed-line
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telephone penetration in Argentina, which has always been notoriously low, remained at 21.6% at the end of 2005, with 8.5 million subscribers. Furthermore, the broadband penetration rate, at 2.8%, is rising only very slowly. Many Internet users access the web via public terminals – in universities, libraries, Internet cafes, etc.
Figure 2 Argentina: Trends in Internet Usage, 2000-2005 30 25.8
% population
25 19.8
20 15.1
15 11.6 8.9
10 6.8 5 0 2000
2001
2002
2003
2004
2005
Source: Pira International Ltd calculations from Internetworldstats.com (www.Internetworldstats.com); OECD (broadband penetration)
PRINT MARKET TRENDS The Argentinean print market was valued at Peso6.85 billion (US$2.34 billion) in 2005. It is projected to grow by 12.1% in absolute terms in 2006 and by 8% in real terms, excluding the impact of inflation. During the period 2001-2006, the print market grew at an average annual rate of 12% in absolute terms but declined at an annual rate of 5.2% in real terms after the slow-down at the beginning of the decade and subsequent high levels of inflation. The industry though is recovering momentum with real, near double-digit growth forecast until the end of the decade
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Table 3 Argentina: Print Market Trends, 2001-2006
Peso million, current prices Peso million, constant 2005 prices US$ million, current prices
2001
2005
2006p
8,406.9
% change 20052006 22.7
CAGR (%) 20012006 12.1
4,753.2
6,850.7
8,160.2
6,850.7
7,397.0
8.0
-1.9
$4,753.2
$2,338.1
$2,721.8
16.4
-10.6
Note: p=projected Source: Pira International Ltd Flexo represents the single largest segment of the Argentinean market across print processes, with flexo printing output valued at Peso1.76 billion in 2005, and projected to grow by 26% in absolute terms in 2006. Sheetfed is the single largest component of offset litho printing with output at Peso1.70 billion ahead of coldset web offset at Peso912 million, with heatset web offset gaining market share. The fastest growing areas of the market are Electrophotography and inkjet at Peso110 million and Peso343 million respectively in 2005, with screen and letterpress losing market share.
Table 4 Argentina: Print Market Trends by Print Process, 2001-2006 (Peso million, current prices) Process Offset litho Sheetfed Web Coldset Heatset Gravure Flexo Screen Letterpress Electrophotography Inkjet Other Total
2001
2005
2006p
2,346.5 1,264.7 1,081.8 626.7 455.1 280.4 1,285.3 181.9 342.3 34.7 152.5 129.6 4,753.2
3,348.1 1,699.2 1,648.9 912.1 736.8 401.1 1,756.9 212.4 627.8 109.5 342.7 52.2 6,850.7
4,075.1 2,051.3 2,023.8 1,107.5 916.3 476.4 2,215.6 249.2 711.9 155.8 453.5 69.4 8,406.9
Note: p=projected Source: Pira International Ltd
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% change 2005-2006 21.7 20.7 22.7 21.4 24.4 18.8 26.1 17.4 13.4 42.3 32.3 32.8 22.7
CAGR (%) 2001-2006 11.7 10.2 13.3 12.1 15.0 11.2 11.5 6.5 15.8 35.1 24.4 -11.7 12.1
Table 5 Argentina: Print Market Trends by Print Process, 2001-2006 (US$ million, current prices) Process Offset litho Sheetfed Web Coldset Heatset Gravure Flexo Screen Letterpress Electrophotography Inkjet Other Total
2001
2005
2006p
$2,346.5 1,264.7 1,081.8 626.7 455.1 280.4 1,285.3 181.9 342.3 34.7 152.5 129.6 $4,753.2
$1,142.7 579.9 562.8 311.3 251.5 136.9 599.6 72.5 214.3 37.4 116.9 17.8 $2,338.1
$1,319.2 664.1 655.1 358.5 296.6 154.2 717.3 80.7 230.5 50.4 146.8 22.5 $2,721.8
% change 2005-2006 15.4 14.5 16.4 15.2 18.0 12.7 19.6 11.3 7.6 35.0 25.5 26.0 16.4
CAGR (%) 2001-2006 -10.9 -12.1 -9.5 -10.6 -8.2 -11.3 -11.0 -15.0 -7.6 7.8 -0.8 -29.6 -10.6
Note: p=projected Source: Pira International Ltd
Across end-use areas, packaging represents the single largest product sector with sales of Peso2.52 billion in 2005, projected to grow by almost 25% in 2006. Other key fast-growth areas during 2006 include advertising sectors such as direct mail and inserts, as well as publication print, financial-related print and labels. Relatively low growth is seen in areas such as catalogs and directories.
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Table 6 Argentina: Print Market Trends by Product Sector, 2001-2006 (Peso million, current prices) Product
2001
2005
2006p 787.1 356.2 294.9 1,169.5 539.1 12.0 324.8
% change 2005-2006 22.1 16.5 18.7 22.3 22.0 35.2 22.1
CAGR (%) 2001-2006 13.3 12.2 11.3 13.3 12.0 30.8 10.8
Books Catalogs Directories Magazines Newspapers Direct mail Brochures & pamphlets, other promotional print* Inserts Coupons, tickets & tape printing Posters & banners** Business forms Financial & legal printing*** Packaging - Corrugated & solid fiber - Cartons - Flexibles Labels Others Total
422.1 200.1 172.8 626.5 306.2 3.1 194.3
644.4 305.8 248.5 956.3 441.8 8.9 266.0
40.7 4.7 70.5 133.2 205.8 1,730.8 785.5 304.0 641.3 182.4 460.2 4,753.2
62.1 8.9 97.5 158.6 301.3 2,518.1 1,108.5 461.1 948.6 272.0 560.6 6,850.7
77.4 11.4 119.4 193.5 368.7 3,135.3 1,352.2 570.3 1,212.7 331.0 686.6 8,406.9
24.7 29.1 22.4 22.0 22.4 24.5 22.0 23.7 27.8 21.7 22.5 22.7
13.7 19.5 11.1 7.8 12.4 12.6 11.5 13.4 13.6 12.7 8.3 12.1
Packaging - Consumer packaging - Industrial packaging
1,730.8 864.3 866.4
2,518.1 1,295.1 1,223.1
3,135.3 1,641.2 1,494.1
24.5 26.7 22.2
12.6 13.7 11.5
Note: p=projected; *excl. financial publications, etc; *plus other point-of-sale advertising materials; ***inc. financial reports, etc Source: Pira International Ltd
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Table 7 Argentina: Print Market Trends by Product Sector, 2001-2006 (US$ million, current prices) Product
2001
2005
2006p $254.8 115.3 95.5 378.6 174.5 3.9 105.2
% change 2005-2006 15.9 10.5 12.6 16.0 15.8 28.3 15.8
CAGR (%) 2001-2006 -9.6 -10.4 -11.2 -9.6 -10.6 4.4 -11.5
$422.1 200.1 172.8 626.5 306.2 3.1 194.3
$219.9 104.4 84.8 326.4 150.8 3.0 90.8
Books Catalogs Directories Magazines Newspapers Direct mail Brochures & pamphlets, other promotional print* Inserts Coupons, tickets & tape printing Posters & banners** Business forms Financial & legal printing*** Packaging - Corrugated & solid fiber - Cartons - Flexibles Labels Others Total
40.7 4.7
21.2 3.0
25.1 3.7
18.3 22.4
-9.3 -4.6
70.5 133.2 205.8 1,730.8 785.5 304.0 641.3 182.4 460.2 $4,753.2
33.3 54.1 102.8 859.4 378.3 157.4 323.7 92.8 191.3 $2,338.1
38.6 62.6 119.4 1,015.0 437.8 184.6 392.6 107.2 222.3 $2,721.8
16.1 15.7 16.1 18.1 15.7 17.3 21.3 15.4 16.2 16.4
-11.3 -14.0 -10.3 -10.1 -11.0 -9.5 -9.3 -10.1 -13.5 -10.6
Packaging - Consumer packaging - Industrial packaging
$1,730.8 864.3 866.4
$859.4 442.0 417.4
$1,015.0 531.3 483.7
18.1 20.2 15.9
-10.1 -9.3 -11.0
Note: p=projected; *excl. financial publications, etc; *plus other point-of-sale advertising materials; ***inc. financial reports, etc Source: Pira International Ltd
MACHINERY, INK, CONSUMABLES AND SUBSTRATES Given the speed of product development and the rapid pace of technology transfer, most of the key developments for printing presses and processes over the next five years will be seen in all of the main regions of the world, despite the fact that the rate of adoption varies between developed and developing regions.
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Table 8 Argentina: Printing Machinery (US$ million, current prices) Sector Sheetfed offset Coldset web offset Heatset web offset Gravure Flexo Screen Letterpress Electrophotography Inkjet Spares Prepress - Film imagesetters - Platesetters Postpress Total
31.8 9.4 7.3 3.4 19.2 4.2 11.9 7.6 7.1 22.7 8.6
% change 2005-06 13.2 15.0 19.6 10.7 31.2 5.3 1.7 33.6 33.1 16.1 23.2
3.0 5.6 8.1 141.2
7.8 33.4 36.8 18.5
2006
33.7 10.6 9.4 3.4 26.2 3.7 7.7 19.1 18.2 26.4 11.5
% change 2006-11 5.8 13.0 27.3 1.2 36.5 -10.6 -35.2 150.0 157.5 16.3 34.1
4.4 7.1 9.5 179.2
45.7 27.9 16.3 26.9
2011
Source: Pira International Ltd
Table 9 Argentina: Printing Machinery (Peso million, current prices) Sector Sheetfed offset Coldset web offset Heatset web offset Gravure Flexo Screen Letterpress Electrophotography Inkjet Spares Prepress - Film imagesetters - Platesetters Postpress Total
97.3 28.7 22.5 10.3 58.7 12.7 36.3 23.3 21.6 69.4 26.2
% change 2005-06 18.3 20.1 24.9 15.7 37.1 9.9 6.2 39.6 39.0 21.3 28.6
9.2 17.0 24.9 432.0
12.5 39.3 42.9 24.5
2006
Source: Pira International Ltd
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103.0 32.4 28.6 10.4 80.1 11.4 23.5 58.4 55.7 80.7 35.1
% change 2006-11 5.8 13.0 27.3 1.2 36.5 -10.6 -35.2 150.0 157.5 16.3 34.1
13.4 21.8 29.0 548.3
45.7 27.9 16.3 26.9
2011
Table 10 Argentina: Printing Consumables (US$ million, current prices) Sector Graphic arts film All aluminum plates - Metal CtP - Conventional Polyester/paper Flexo plates Total
5.6
% change 2005-06 2.2
13.2 4.4 8.8 2.3 4.3 25.4
32.7 37.6 30.3 16.4 8.9 18.9
2006
4.7
% change 2006-11 -16.9
18.7 8.7 9.9 3.4 6.8 33.5
41.2 99.2 12.4 48.0 57.5 31.7
2011
Source: Pira International Ltd
Table 11 Argentina: Printing Consumables (Peso million, current prices) Sector Graphic arts film All aluminum plates - Metal CtP - Conventional Polyester/paper Flexo plates Total
17.2
% change 2005-06 6.7
40.5 13.4 27.0 7.0 13.2 77.8
38.5 43.7 36.1 21.5 13.8 24.2
2006
14.3
% change 2006-11 -16.9
57.1 26.8 30.4 10.3 20.7 102.5
41.2 99.2 12.4 48.0 57.5 31.7
2011
Source: Pira International Ltd
Table 12 Argentina: Printing Inks (US$ million, current prices) Sector Sheetfed offset Coldset web offset Heatset web offset Gravure Flexo Screen Letterpress Electrophotography Inkjet Other Total
2006 21.1 11.4 9.4 4.9 22.7 2.6 7.3 1.9 5.7 0.8 87.8
% change 2005-06 19.2 19.9 22.8 17.3 24.6 15.9 12.1 40.6 32.3 19.4 21.4
Source: Pira International Ltd
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2011 23.5 13.9 13.1 5.7 27.0 2.4 6.4 6.0 16.0 0.9 114.9
% change 2006-11 11.8 21.8 38.8 17.1 18.8 -5.6 -13.0 209.8 179.5 16.1 30.9
Table 13 Argentina: Printing Inks (Peso million, current prices) Sector Sheetfed offset Coldset web offset Heatset web offset Gravure Flexo Screen Letterpress Electrophotography Inkjet Other Total
2006 64.4 34.8 28.8 15.0 69.6 7.9 22.4 5.9 17.5 2.3 268.6
% change 2005-06 24.5 25.2 28.3 22.5 30.1 21.1 17.1 46.8 38.2 24.7 26.8
2011 72.0 42.4 39.9 17.5 82.7 7.4 19.5 18.4 48.9 2.7 351.5
% change 2006-11 11.8 21.8 38.8 17.1 18.8 -5.6 -13.0 209.8 179.5 16.1 30.9
Source: Pira International Ltd
Table 14 Argentina: Printing Substrates (US$ million, current prices) Sector Uncoated mechanical Coated mechanical Uncoated woodfree Coated woodfree Newsprint Packaging paper & board Other paper Films Foils Other Packaging substrates Total
11.3 33.8 64.1 107.3 78.0
% change 2005-06 14.4 14.7 12.7 13.6 13.9
471.5 10.3 128.3 50.7 89.8 1,045.1
2006
Source: Pira International Ltd
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12.9 46.6 75.3 135.0 94.7
% change 2006-11 14.1 37.8 17.4 25.8 21.4
17.1 13.7 21.5 17.0
691.0 10.6 175.0 69.2
46.6 2.8 36.4 36.4
19.2 16.8
92.3 1,402.6
2.8 34.2
2011
Table 15 Argentina: Printing Inks (Peso million, current prices) Sector Uncoated mechanical Coated mechanical Uncoated woodfree Coated woodfree Newsprint Packaging paper & board Other paper Films Foils Other Packaging substrates Total
34.6 103.4 196.2 328.3 238.8
% change 2005-06 19.5 19.8 17.7 18.6 19.0
1,442.7 31.5 392.6 155.3 274.6 3,198.1
2006
39.5 142.5 230.3 413.2 289.7
% change 2006-11 14.1 37.8 17.4 25.8 21.4
22.3 18.7 26.9 22.2
2,114.5 32.4 535.5 211.8
46.6 2.8 36.4 36.4
24.5 22.0
282.4 4,291.8
2.8 34.2
2011
Source: Pira International Ltd
For more comprehensive information about the global printing industry, please refer to the three PRIMIR reports “World Wide Market for Print” (Phase I, Phase II and Final). Visit http://www.primir.org/past_primir_studies.html for descriptions, tables of contents, and ordering information.
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1899 Preston White Drive, Reston, Virginia 20191 (703) 264-7200 © PRIMIR/NPES 2008
INTRODUCTION In today’s global business, print faces constant change and multinational challenges. In order to react intelligently and be proactive printing industry business leaders urgently need worldwide data to reference when making internationally-based business decisions. PRIMIR recently released a series of three reports on the “World Wide Market for Print.” Pira International was commissioned to investigate the key global print markets. This study identified 51 country markets that make up 99% of the global commercial printing industry. The series of reports detail social and economic climate in each region, demographic profiles, advertising trends, internet usage/adoption, print markets and applications, print process share, and market sizing for presses, equipment, consumables and paper. Forecasts are provided through 2011. The report that follows is a summary of data and information from all three reports pertaining to this specific country. Note: Unless otherwise noted, the data is presented in U.S. Dollars, taking into account forecast rates for GDP growth and inflation, constant 2006 exchange rates have been applied. The final report includes a database where statistics are provided for both current and constant U.S. Dollars as well as in local currency (both current and constant).
ARGENTINA - OVERVIEW By area, Argentina is the second-largest country in Latin America, equivalent to the size of the USA east of the Mississippi river. With a population of 39.1 million, it is the fourth most populous country in Latin America, after Brazil, Mexico and Colombia. Its GDP, of US$182 billion at the end of 2005, is US$100 billion lower than it was in 2000, owing to a severe economic crisis, which reached its trough in 2002, when GDP declined to US$98 billion. GDP per capita followed a similar course, standing at US$5,369 in 2006, more than double the 2002 figure of US$2,597.
In common with the rest of Latin America, Argentina is a heavily urbanized nation, with 86% of its inhabitants living in towns and cities – of whom one-third reside in Buenos Aires, now a city of 13 million inhabitants – and 14% in rural
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areas. The literacy rate remains high at 97%, one of the highest in the region. Life expectancy, at 75.5 years, is also high in regional terms; in neighboring Brazil, for example, it stands at 72.1 years. Unique to the region, Argentina has an extremely varied cultural mix, consequent upon the many waves of immigration into the country over the last two centuries. Immigrants came from Europe, the Middle East and Latin America.
The Republic of Argentina is divided administratively into 23 provinces and one autonomous region (the Federal Capital). There are two main political parties, the Justicialist (Peronist) party and the Radical Civic Union (UCR) party. Current president Nestor Kirchner (Peronist party), former governor of Santa Cruz, took office on May 25, 2003, after a decisive election victory. On assuming office, the economic downturn was easing somewhat, which has allowed him since to concentrate upon consolidating his political strength and alleviating social problems. In October 2005, he won a major victory in the legislative elections, giving him a strengthened mandate and a stronger position in the Senate and Chamber of Deputies. He will now focus, from a position of strength, on setting Argentina's economic course and consolidating the economic recovery of the past three years.
Other issues his government must tackle include the still-weak Central Bank, which suffers from a lack of independence, and the long-trailed reform of the provinces, that has not yet been completed. Although the government's broad policy remains one of allowing private initiative to operate, President Kirchner’s government has said it will increase the role of the state in an effort to boost economic growth and recovery.
On the diplomatic front, relations with neighbor Uruguay remain tense, following Uruguay’s decision to site two cellulose plants across the Uruguay river from Argentina. The sitings continue to be disputed by Argentina on environmental grounds, even after the recent ruling by the International Court of
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Justice to allow construction to go ahead. In addition, the area where Argentina, Brazil and Paraguay converge, often called the ‘unruly region’, continues to present a headache to the government, as it seeks to rid the zone of its criminal activities: money laundering, smuggling, and illegal trafficking of narcotics and arms.
DEMOGRAPHIC TRENDS The median age of the population is 29.2, slightly higher than in most other Latin American countries, reflecting, in part, the low population growth rate of 1.05%. Conversely, the proportion of 25 to 64 year olds in the population, at 46.6%, is lower than in other countries in the region, giving Argentina an older population profile. This trend is forecast to continue through to 2050, by which time the proportion of 15 to 24 year olds will decline from 17.8% in 2005 to 12.2%. There has been a big improvement in social conditions over the last few years in Argentina. By the end of 2005, the poverty rate had declined to 34% from its 2002 peak of 57%, and extreme poverty had more than halved to 12%. Other social indicators, such as secondary school enrollment (compulsory) and completion rates, as well as formal health insurance coverage and the infant mortality rate (now down to 16 per 1,000), have also seen impressive improvements in the past few years. These results have been helped by direct public intervention through the Heads of Household Program, which provides cash transfers to the unemployed. The labor market, though, remains highly segmented, with a widening gap between formal and informal sector wages.
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Figure 1 Argentina: Long-term Demographic Trends by Age Group, 2000-2050 0-14
15-64
65+
Total population
70
60,000
60
51,382
50,000
50 % population
40,000 36,896
65.3
40
63.3 30,000
30
28.0
62.1 22.0 19.0
17.7
20
20,000
Total population ('000s)
46,115
12.7 9.9
10,000
10
0
0 2000
2025
2050
Source: United Nations
ECONOMIC TRENDS Economic activity continued to expand at a strong pace in 2005, at an average quarterly growth rate of 9.2%, making it the strongest year of economic growth since Argentina's economic recovery began in March 2003 (between 2002 and 2005, annual growth has been between 8% and 9%). The growth is driven by exports, industry, construction and tourism. For 2006, annual GDP growth is projected at 7.3%.
In 2005, however, inflation more than doubled during the course of the year, ending the year at 12.3%. Industrial capacity, which was sufficient for the first two years of Argentina’s rapid recovery, was squeezed, as domestic (and foreign) consumers demanded more goods. A lack of substantial investment, moreover, failed to adequately expand capacity in order to increase supply, and thus mitigate inflationary pressures.
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Encouraging investment, which expanded by 22.7% in 2005 (down from 34.4% in 2004) will be crucial in laying the foundation for a sustainable growth cycle – and in easing the inflationary pressures. Unfortunately, investment to date will not prove sufficient to do so in 2006. As a result, inflation will remain within the 11% to 14% band for the year. It did fall to 11% at the end of June 2006, a result of the government's efforts to dampen price pressures through price agreements with industry and retail groups and a temporary ban on meat exports. While real wages in the informal sector remain depressed, formal private sector real wages are rising rapidly, and labor markets appear to be tightening. Unemployment has continued to decline on the back of the economic recovery – from 20.4% in early 2003 to 11% in March 2006.
Table 1 Argentina: Key Economic Indicators, 2003-2007 Indicator Population ('000s) Exchange rate (=US$1) Purchasing power parity (=US$1) GDP (local currency, millions, current prices) GDP (local currency, millions, constant 2000 prices) GDP (current, US$ million) GDP, PPP (current, US$ million) GDP per capita (US$) GDP per capita, PPP (US$) GDP growth (%) GDP deflator (%) Consumer price index (2000=100) Imports (US$ million) Exports (US$ million)
2003 37,996 2.95 0.86 375,910
2004 38,370 2.95 0.91 447,644
2005 38,747 2.93 0.98 532,268
2006p 39,137 3.09 1.12 649,096
2007f 39,531 3.17 1.26 769,446
263,387
287,092
313,505
336,390
349,846
127,643 432,881 3,359 11,393 8.8 10.5 141.3 13,834 29,566
151,958 484,377 3,960 12,624 9.0 9.2 147.5 22,445 34,550
181,662 533,722 4,688 13,775 9.2 8.9 161.7 28,688 40,013
210,147 567,313 5,369 14,495 7.3 13.6 183.8 n/a n/a
242,816 599,257 6,142 15,159 4.0 14.0 209.4 n/a n/a
Note: p=projected; f=forecast Source: Pira International, Ltd calculations from the United Nations (population data), International Monetary Fund (economic data)
THE MEDIA ENVIRONMENT There are an estimated 1,260 print publications in circulation in Argentina, around 90% of which are consumer titles, with the rest being business-tobusiness. The vast majority (96%) of purchases occur at the retail level, with just
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2-5% of readers opting for annual subscriptions. Total advertising expenditure reached over US$3 billion in 2005, a quarter of which was devoted to magazines and just under three quarters to newspapers. The remainder, about 3% of the total, was devoted to Internet advertising, which, though still small, is beginning to grow at a faster pace than before. Colombia and Argentina are the only countries in Latin America to see a growth in newspaper advertising market share since the beginning of the decade.
Some of the more important newspapers in Argentina include Clarin, La Nacion, Pagina 12, La Razon, La Prensa, and the Buenos Aires Herald. Daily newspaper circulation, according to UNESCO, is at 135 per 1,000 people. This compares to 61 in Brazil, 115 in Mexico, and 206 in Venezuela.
Table 2 Argentina: Advertising and Print Media Trends, 2000-2004 Advertising media Above-the-line advertising (media sales) Total advertising expenditure (US$ million) Print advertising expenditure (US$ million) Newspaper advertising expenditure (US$ million) Magazine advertising expenditure (US$ million) Outdoor advertising expenditure (US$ million) Print's share of advertising expenditure (%) Internet advertising expenditure (US$ million) Newspaper trends Number of dailies Circulation of dailies ('000s) Magazine trends Number of consumer titles Number of business-to-business titles
2000
2001
2002
2003
2004
3,409.7 1,532.0 1,147.3
4,997.6 1,689.6 1,242.3
1,396.0 486.8 384.2
2,229.9 725.1 602.2
2,836.2 912.7 731.9
261.4 123.3 44.9 n/a
329.4 117.9 33.8 n/a
70.0 32.6 34.9 n/a
122.9 n/a n/a n/a
180.8 n/a n/a n/a
109 2,200
112 n/a
122 n/a
181 n/a
182 n/a
942 128
895 112
328 70
685 67
917 117
Source: World Advertising Trends, World Press Trends, World Magazine Trends
There are approximately ten million Internet users in Argentina, a penetration rate of almost 25% and an impressive rise from the 3.9% penetration rate in 2000. Such a penetration rate is perhaps surprising, however, as fixed-line
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telephone penetration in Argentina, which has always been notoriously low, remained at 21.6% at the end of 2005, with 8.5 million subscribers. Furthermore, the broadband penetration rate, at 2.8%, is rising only very slowly. Many Internet users access the web via public terminals – in universities, libraries, Internet cafes, etc.
Figure 2 Argentina: Trends in Internet Usage, 2000-2005 30 25.8
% population
25 19.8
20 15.1
15 11.6 8.9
10 6.8 5 0 2000
2001
2002
2003
2004
2005
Source: Pira International Ltd calculations from Internetworldstats.com (www.Internetworldstats.com); OECD (broadband penetration)
PRINT MARKET TRENDS The Argentinean print market was valued at Peso6.85 billion (US$2.34 billion) in 2005. It is projected to grow by 12.1% in absolute terms in 2006 and by 8% in real terms, excluding the impact of inflation. During the period 2001-2006, the print market grew at an average annual rate of 12% in absolute terms but declined at an annual rate of 5.2% in real terms after the slow-down at the beginning of the decade and subsequent high levels of inflation. The industry though is recovering momentum with real, near double-digit growth forecast until the end of the decade
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Table 3 Argentina: Print Market Trends, 2001-2006
Peso million, current prices Peso million, constant 2005 prices US$ million, current prices
2001
2005
2006p
8,406.9
% change 20052006 22.7
CAGR (%) 20012006 12.1
4,753.2
6,850.7
8,160.2
6,850.7
7,397.0
8.0
-1.9
$4,753.2
$2,338.1
$2,721.8
16.4
-10.6
Note: p=projected Source: Pira International Ltd Flexo represents the single largest segment of the Argentinean market across print processes, with flexo printing output valued at Peso1.76 billion in 2005, and projected to grow by 26% in absolute terms in 2006. Sheetfed is the single largest component of offset litho printing with output at Peso1.70 billion ahead of coldset web offset at Peso912 million, with heatset web offset gaining market share. The fastest growing areas of the market are Electrophotography and inkjet at Peso110 million and Peso343 million respectively in 2005, with screen and letterpress losing market share.
Table 4 Argentina: Print Market Trends by Print Process, 2001-2006 (Peso million, current prices) Process Offset litho Sheetfed Web Coldset Heatset Gravure Flexo Screen Letterpress Electrophotography Inkjet Other Total
2001
2005
2006p
2,346.5 1,264.7 1,081.8 626.7 455.1 280.4 1,285.3 181.9 342.3 34.7 152.5 129.6 4,753.2
3,348.1 1,699.2 1,648.9 912.1 736.8 401.1 1,756.9 212.4 627.8 109.5 342.7 52.2 6,850.7
4,075.1 2,051.3 2,023.8 1,107.5 916.3 476.4 2,215.6 249.2 711.9 155.8 453.5 69.4 8,406.9
Note: p=projected Source: Pira International Ltd
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% change 2005-2006 21.7 20.7 22.7 21.4 24.4 18.8 26.1 17.4 13.4 42.3 32.3 32.8 22.7
CAGR (%) 2001-2006 11.7 10.2 13.3 12.1 15.0 11.2 11.5 6.5 15.8 35.1 24.4 -11.7 12.1
Table 5 Argentina: Print Market Trends by Print Process, 2001-2006 (US$ million, current prices) Process Offset litho Sheetfed Web Coldset Heatset Gravure Flexo Screen Letterpress Electrophotography Inkjet Other Total
2001
2005
2006p
$2,346.5 1,264.7 1,081.8 626.7 455.1 280.4 1,285.3 181.9 342.3 34.7 152.5 129.6 $4,753.2
$1,142.7 579.9 562.8 311.3 251.5 136.9 599.6 72.5 214.3 37.4 116.9 17.8 $2,338.1
$1,319.2 664.1 655.1 358.5 296.6 154.2 717.3 80.7 230.5 50.4 146.8 22.5 $2,721.8
% change 2005-2006 15.4 14.5 16.4 15.2 18.0 12.7 19.6 11.3 7.6 35.0 25.5 26.0 16.4
CAGR (%) 2001-2006 -10.9 -12.1 -9.5 -10.6 -8.2 -11.3 -11.0 -15.0 -7.6 7.8 -0.8 -29.6 -10.6
Note: p=projected Source: Pira International Ltd
Across end-use areas, packaging represents the single largest product sector with sales of Peso2.52 billion in 2005, projected to grow by almost 25% in 2006. Other key fast-growth areas during 2006 include advertising sectors such as direct mail and inserts, as well as publication print, financial-related print and labels. Relatively low growth is seen in areas such as catalogs and directories.
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Table 6 Argentina: Print Market Trends by Product Sector, 2001-2006 (Peso million, current prices) Product
2001
2005
2006p 787.1 356.2 294.9 1,169.5 539.1 12.0 324.8
% change 2005-2006 22.1 16.5 18.7 22.3 22.0 35.2 22.1
CAGR (%) 2001-2006 13.3 12.2 11.3 13.3 12.0 30.8 10.8
Books Catalogs Directories Magazines Newspapers Direct mail Brochures & pamphlets, other promotional print* Inserts Coupons, tickets & tape printing Posters & banners** Business forms Financial & legal printing*** Packaging - Corrugated & solid fiber - Cartons - Flexibles Labels Others Total
422.1 200.1 172.8 626.5 306.2 3.1 194.3
644.4 305.8 248.5 956.3 441.8 8.9 266.0
40.7 4.7 70.5 133.2 205.8 1,730.8 785.5 304.0 641.3 182.4 460.2 4,753.2
62.1 8.9 97.5 158.6 301.3 2,518.1 1,108.5 461.1 948.6 272.0 560.6 6,850.7
77.4 11.4 119.4 193.5 368.7 3,135.3 1,352.2 570.3 1,212.7 331.0 686.6 8,406.9
24.7 29.1 22.4 22.0 22.4 24.5 22.0 23.7 27.8 21.7 22.5 22.7
13.7 19.5 11.1 7.8 12.4 12.6 11.5 13.4 13.6 12.7 8.3 12.1
Packaging - Consumer packaging - Industrial packaging
1,730.8 864.3 866.4
2,518.1 1,295.1 1,223.1
3,135.3 1,641.2 1,494.1
24.5 26.7 22.2
12.6 13.7 11.5
Note: p=projected; *excl. financial publications, etc; *plus other point-of-sale advertising materials; ***inc. financial reports, etc Source: Pira International Ltd
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Table 7 Argentina: Print Market Trends by Product Sector, 2001-2006 (US$ million, current prices) Product
2001
2005
2006p $254.8 115.3 95.5 378.6 174.5 3.9 105.2
% change 2005-2006 15.9 10.5 12.6 16.0 15.8 28.3 15.8
CAGR (%) 2001-2006 -9.6 -10.4 -11.2 -9.6 -10.6 4.4 -11.5
$422.1 200.1 172.8 626.5 306.2 3.1 194.3
$219.9 104.4 84.8 326.4 150.8 3.0 90.8
Books Catalogs Directories Magazines Newspapers Direct mail Brochures & pamphlets, other promotional print* Inserts Coupons, tickets & tape printing Posters & banners** Business forms Financial & legal printing*** Packaging - Corrugated & solid fiber - Cartons - Flexibles Labels Others Total
40.7 4.7
21.2 3.0
25.1 3.7
18.3 22.4
-9.3 -4.6
70.5 133.2 205.8 1,730.8 785.5 304.0 641.3 182.4 460.2 $4,753.2
33.3 54.1 102.8 859.4 378.3 157.4 323.7 92.8 191.3 $2,338.1
38.6 62.6 119.4 1,015.0 437.8 184.6 392.6 107.2 222.3 $2,721.8
16.1 15.7 16.1 18.1 15.7 17.3 21.3 15.4 16.2 16.4
-11.3 -14.0 -10.3 -10.1 -11.0 -9.5 -9.3 -10.1 -13.5 -10.6
Packaging - Consumer packaging - Industrial packaging
$1,730.8 864.3 866.4
$859.4 442.0 417.4
$1,015.0 531.3 483.7
18.1 20.2 15.9
-10.1 -9.3 -11.0
Note: p=projected; *excl. financial publications, etc; *plus other point-of-sale advertising materials; ***inc. financial reports, etc Source: Pira International Ltd
MACHINERY, INK, CONSUMABLES AND SUBSTRATES Given the speed of product development and the rapid pace of technology transfer, most of the key developments for printing presses and processes over the next five years will be seen in all of the main regions of the world, despite the fact that the rate of adoption varies between developed and developing regions.
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Table 8 Argentina: Printing Machinery (US$ million, current prices) Sector Sheetfed offset Coldset web offset Heatset web offset Gravure Flexo Screen Letterpress Electrophotography Inkjet Spares Prepress - Film imagesetters - Platesetters Postpress Total
31.8 9.4 7.3 3.4 19.2 4.2 11.9 7.6 7.1 22.7 8.6
% change 2005-06 13.2 15.0 19.6 10.7 31.2 5.3 1.7 33.6 33.1 16.1 23.2
3.0 5.6 8.1 141.2
7.8 33.4 36.8 18.5
2006
33.7 10.6 9.4 3.4 26.2 3.7 7.7 19.1 18.2 26.4 11.5
% change 2006-11 5.8 13.0 27.3 1.2 36.5 -10.6 -35.2 150.0 157.5 16.3 34.1
4.4 7.1 9.5 179.2
45.7 27.9 16.3 26.9
2011
Source: Pira International Ltd
Table 9 Argentina: Printing Machinery (Peso million, current prices) Sector Sheetfed offset Coldset web offset Heatset web offset Gravure Flexo Screen Letterpress Electrophotography Inkjet Spares Prepress - Film imagesetters - Platesetters Postpress Total
97.3 28.7 22.5 10.3 58.7 12.7 36.3 23.3 21.6 69.4 26.2
% change 2005-06 18.3 20.1 24.9 15.7 37.1 9.9 6.2 39.6 39.0 21.3 28.6
9.2 17.0 24.9 432.0
12.5 39.3 42.9 24.5
2006
Source: Pira International Ltd
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103.0 32.4 28.6 10.4 80.1 11.4 23.5 58.4 55.7 80.7 35.1
% change 2006-11 5.8 13.0 27.3 1.2 36.5 -10.6 -35.2 150.0 157.5 16.3 34.1
13.4 21.8 29.0 548.3
45.7 27.9 16.3 26.9
2011
Table 10 Argentina: Printing Consumables (US$ million, current prices) Sector Graphic arts film All aluminum plates - Metal CtP - Conventional Polyester/paper Flexo plates Total
5.6
% change 2005-06 2.2
13.2 4.4 8.8 2.3 4.3 25.4
32.7 37.6 30.3 16.4 8.9 18.9
2006
4.7
% change 2006-11 -16.9
18.7 8.7 9.9 3.4 6.8 33.5
41.2 99.2 12.4 48.0 57.5 31.7
2011
Source: Pira International Ltd
Table 11 Argentina: Printing Consumables (Peso million, current prices) Sector Graphic arts film All aluminum plates - Metal CtP - Conventional Polyester/paper Flexo plates Total
17.2
% change 2005-06 6.7
40.5 13.4 27.0 7.0 13.2 77.8
38.5 43.7 36.1 21.5 13.8 24.2
2006
14.3
% change 2006-11 -16.9
57.1 26.8 30.4 10.3 20.7 102.5
41.2 99.2 12.4 48.0 57.5 31.7
2011
Source: Pira International Ltd
Table 12 Argentina: Printing Inks (US$ million, current prices) Sector Sheetfed offset Coldset web offset Heatset web offset Gravure Flexo Screen Letterpress Electrophotography Inkjet Other Total
2006 21.1 11.4 9.4 4.9 22.7 2.6 7.3 1.9 5.7 0.8 87.8
% change 2005-06 19.2 19.9 22.8 17.3 24.6 15.9 12.1 40.6 32.3 19.4 21.4
Source: Pira International Ltd
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2011 23.5 13.9 13.1 5.7 27.0 2.4 6.4 6.0 16.0 0.9 114.9
% change 2006-11 11.8 21.8 38.8 17.1 18.8 -5.6 -13.0 209.8 179.5 16.1 30.9
Table 13 Argentina: Printing Inks (Peso million, current prices) Sector Sheetfed offset Coldset web offset Heatset web offset Gravure Flexo Screen Letterpress Electrophotography Inkjet Other Total
2006 64.4 34.8 28.8 15.0 69.6 7.9 22.4 5.9 17.5 2.3 268.6
% change 2005-06 24.5 25.2 28.3 22.5 30.1 21.1 17.1 46.8 38.2 24.7 26.8
2011 72.0 42.4 39.9 17.5 82.7 7.4 19.5 18.4 48.9 2.7 351.5
% change 2006-11 11.8 21.8 38.8 17.1 18.8 -5.6 -13.0 209.8 179.5 16.1 30.9
Source: Pira International Ltd
Table 14 Argentina: Printing Substrates (US$ million, current prices) Sector Uncoated mechanical Coated mechanical Uncoated woodfree Coated woodfree Newsprint Packaging paper & board Other paper Films Foils Other Packaging substrates Total
11.3 33.8 64.1 107.3 78.0
% change 2005-06 14.4 14.7 12.7 13.6 13.9
471.5 10.3 128.3 50.7 89.8 1,045.1
2006
Source: Pira International Ltd
14
12.9 46.6 75.3 135.0 94.7
% change 2006-11 14.1 37.8 17.4 25.8 21.4
17.1 13.7 21.5 17.0
691.0 10.6 175.0 69.2
46.6 2.8 36.4 36.4
19.2 16.8
92.3 1,402.6
2.8 34.2
2011
Table 15 Argentina: Printing Inks (Peso million, current prices) Sector Uncoated mechanical Coated mechanical Uncoated woodfree Coated woodfree Newsprint Packaging paper & board Other paper Films Foils Other Packaging substrates Total
34.6 103.4 196.2 328.3 238.8
% change 2005-06 19.5 19.8 17.7 18.6 19.0
1,442.7 31.5 392.6 155.3 274.6 3,198.1
2006
39.5 142.5 230.3 413.2 289.7
% change 2006-11 14.1 37.8 17.4 25.8 21.4
22.3 18.7 26.9 22.2
2,114.5 32.4 535.5 211.8
46.6 2.8 36.4 36.4
24.5 22.0
282.4 4,291.8
2.8 34.2
2011
Source: Pira International Ltd
For more comprehensive information about the global printing industry, please refer to the three PRIMIR reports “World Wide Market for Print” (Phase I, Phase II and Final). Visit http://www.primir.org/past_primir_studies.html for descriptions, tables of contents, and ordering information.
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