We are delighted to hear from a global sales rep for a paint accessories manufacturer. He has been working with Venezuela for 16 years, and also lived in [...]]]> The situation in Venezuela is now widely documented. But what is it like to do business with Venezuela? Is the instability all political or are real businesses suffering?

We are delighted to hear from a global sales rep for a paint accessories manufacturer. He has been working with Venezuela for 16 years, and also lived in the country for six years, managing a small business. We have decided to protect this person’s anonymity, but shall you want to make contact with him, please let us know and we will put you in touch. This is what he says…

“From commercial perspective, recent unrest is nothing new but an ongoing revolution started by Chavez in1999. Unfortunately, the political agenda has always been the only priority of the current government since then and the economic agenda has always been a low priority.  The business community has been suffering.

Since CADIVI (control over foreign exchange) was introduced, the business community has always been depending on the government for cash to afford imported goods. Depending on the situation, CADIVI can take around 2-4 months to approve imports and the approval can come with significant reduction in the quantity from what is requested. Apart from that, after going through the difficult task of getting the goods through customs clearance, an importer in Venezuela needs to comply with various formalities in order to submit the request for release of funds for payment. Recently CADIVI has been taking around 200 days for approval, which makes it impossible for the importers to pay their debts for a long time and forcing their future imports to be delayed, too.

From time to time there have been some “release valves” introduced by this government to reduce the pressure on businesses and the supply chain but at this moment all of them are scrapped.”

At the same time, UKTI states that “Venezuela is a country of vast economic potential. It has significant economic potential with the Oil and Gas sector dominating the market’s economy. Promising sectors for UK companies include, power generation, infrastructure, telecommunications, education and training, Healthcare, Alternative Energy, Waste Management and the Environment.” So what’s your experience of trading with this country? We’d love to hear from you.

There are many questions surrounding trading with Venezuela. Keep an eye on our blog, since soon we will discuss the implications of Venezuela joining the Mercosur, the trade bloc comprising Brazil, Argentina, Uruguay and Paraguay (currently suspended). Watch this space!

Uruguay has a great tradition of doing business with Britain and BP is one of the [...]]]> When you think of oil & gas, you probably don’t think of Uruguay. And neither did I until yesterday, when I attended an event to hear the BP general manager for Uruguay (in post for only a few weeks).

Uruguay has a great tradition of doing business with Britain and BP is one of the newest additions to bilateral trade. Oil & gas has traditionally been a state monopoly in Uruguay but things are changing and the national petro company, ANCAP, has entered partnerships with overseas companies for the very initial phases of exploration. In the Uruguay Round II, BP won a tender for offshore exploration and extraction, with BG, Total and Tullow Oil. And how meaningful that Round III was being launched by the Uruguayan authorities in London today…

BP, explained its general manager for Uruguay, has five new markets to focus on: Brazil, Nova Scotia, Australia, Libya and Uruguay. Clearly, they see some potential in Uruguay in technical terms, but there are other factors that they must have considered. The BP general manager emphasised two: transparency and respect for the law.

Things take time in oil exploration, time frames are long – that suits Latin America in many ways. However, as Mrs Serna from BP mentioned, the biggest risk she sees is that of nationalisation in the case petrol is found. It has happened in other countries close to Uruguay, but BP must trust the country enough to invest millions here.

I was delighted to be able to ask Mrs Serna a question, as a Uruguayan who has just returned to her country: what she thinks Uruguay is doing really well, and what we could improve on as a country. Mrs Serna praised Uruguay’s transparency and the ease of doing business here, the disposition of the government to move things forward. Not so good, she said, is that not many people know how to work for a multinational company of that calibre. The culture needs to change, our pace needs to speed up.

One fascinating talk and one great new British business in Uruguay. Moving forward to the next stage in oil exploration would be hugely significant, and demanding, for Uruguay. From rescue services to education, from logistics to regulations, a large BP operation could have a massive impact in this country. I’m up for it. And you?

JaJaJa Books commented on the imminent release of [...]]]> The best thing about being on twitter (@UKLatinAmerica) is interacting with SMEs from all over the world that are keen to know more about Latin America. So, when one question popped up thanks to @JaJaJaBooks, I just couldn’t resist it…

JaJaJa Books commented on the imminent release of my ebook “Doing business with Latin America” (shameless sales plug! – click HERE for the publisher’s page) and asked about the publishing industry in Latin America. A very broad question but one I am keen to tackle because of my love of books.

Rather than boring you with detail, let’s look at some stats, suggest some starting points and mention some useful links…

some stats…

(all from CERLALC, August 2012, data corresponding to 2010)

-          Brazil is the country with the largest number of titles (by ISBN): 46,670

-          When the number of titles is divided by 100,000 people (to give us a better idea of penetration rather than volume), Argentina and Uruguay are the biggest consumers, with 56 and 54 titles per 100,000 people respectively

-          In terms of importation of books (in USD million, CIF prices), Mexico is by far the largest importer (368.0) followed by Brazil (141.2) and Mexico is also the largest importer of books from outside Latin America (91%).

where do you start?

In our publication “Doing Business in Latin America” we give you some great starting points for thinking about specific countries, finding distributors, cultural and language issues and more. We hope you find this a great starting point for exporting to Latin America.

If you are selling bilingual books, you might want to find out what the government policy is in each country regarding bilingual education. Is it compulsory? From what age? Which languages? Also, how about private bilingual schools? You could try and contact them directly, but in general they are unlikely to buy your books directly since the importation process in Latin America is tricky – but maybe they can recommend a distributor… And by “contact them directly” I do not really mean emails, which tend to be overlooked… Could you swap free “samples” or organise a prize draw to incentivise information sharing? Thinking laterally is key!

Another great way of starting your publishing export journey in Latin America is visiting one of the fascinating consumer and trade shows. Tip: link it up with some “market research” around local bookshops and a few pre-arranged interviews with buyers and experts – but bear in mind this is a busy time for them!

Probably the most famous one is the Buenos Aires Feria del Libro, which takes place at the end of April. Check it out here: http://www.el-libro.org.ar/

There are other shows that are also hugely known in the Spanish-speaking world, such as the Feria del Libro de Guadalajara in Mexico (http://www.fil.com.mx/) and the Feria del Libro de Bogotá in Colombia (http://www.feriadellibro.com/), to name but two.

And remember that Brazil is altogether a different world for publishing since their national language is not Spanish but Portuguese (and a very different sort of Portuguese from that of Portugal!). Have a look at this event if you are interested in Brazil: http://www.bienalbrasildolivro.com.br/

some more useful links…

Read this Economist article (Dec 2011) about publishing in Latin America.

Unesco’s “Centro Regional para el Fomento del Libro en América Latina y el Caribe” CERLALC

Ebook growth in Latin America is forecast to be high in the next few years, read about it HERE.

Hope this information is of use to you, do stay around and visit our blog and sign up for our newsletter!

Enjoy!

1-      Growing [...]]]> There are many reasons why UK manufacturers should be looking at Latin American export markets. Here, we briefly describe the four top reasons particularly for those working in consumer goods (we cover non-consumer goods HERE).

1-      Growing economies and higher purchasing power

Latin America has experienced a period of economic boom. Even in the midst of a global downturn, the IMF forecasts an average growth rate for Latin America of 3.6% for 2013, and higher for countries like Peru. If your traditional markets are stagnant, this is a key region to look at.

What do growing economies mean to you? First of all, more people have more money to spend on consumer goods, like yours. Latin America has now 300 million class consumers. Many of these consumers have seen their purchasing power increase over the last years and are demanding different products, more choice and higher volumes. For example, in a supermarket in Montevideo I spotted this month Worcestershire sauce, Lea & Perrins sauce, Cadbury’s Milk Tray… these products would have been confined to a small gourmet shop ten years ago. I have also witnessed similar increases in other types of products, like haircare (the John Frieda FrizzEase range now available, for example). Smirnoff Ice is now here, too, as well as Clarks shoes and newcomer retailer Gap… And this only in Montevideo, a small capital city compared to the megalopolis like Sao Paulo (20 million) and Bogota (8 million).

If the new lower middle class is your target audience, then you will understand how this economic success has helped to lift millions out of poverty and into higher consumption patterns. If your target is the middle and upper middle class, then other trends will apply, such as the perceived need for differentiation from the new middle class, and the importance of brands and status. If your goods are aimed at high-income individuals, we recommend you read our blogs about the booming luxury market in Latin America.

There are also individuals keen to spend the cash they have gathered in times of prosperity – many are investing in foreign franchises, for example, as well as in new retail and distribution businesses.

2-      Macroeconomic and political stability

If your image of Latin America is of an unstable continent where it is not safe to do business, you will be surprised. Credit rating agencies like Moody’s and S&P have praised the achievements of countries like Colombia and Uruguay. Yes, there are countries where it is difficult to do business in, but in general you will be welcomed by political stability and sound macroeconomic policies that receive worldwide praise. This means your potential partners (whether distributors, franchisees, licensees, etc) are likely to be in a good position to do business with you.

3-      Regard for British manufacturing

British manufacturing is highly regarded across Latin America, it equates to quality and honesty, so make the most of it! I personally find that approaching potential distributors or end clients with a British brand is always very well received – there is a curiosity element because most businesses will be approached by US, Chinese, Italian, Spanish and other manufacturers first, so there is that “we are different” element, too. And don’t underestimate the positive opinion of British creativity and design.

4-      It is closer than you think

There are many barriers to trading with Latin America, which we cover and give thoughts on regularly on this blog, but overall, Latin America is closer than you think. Maybe not so much in terms of geography or time (and here it depends on whether we are talking Mexico or Chile), but culturally.

There are considerable variations across countries and even regions and cities, but there are also markets that will seem rather familiar and close to home. I personally find that, for example, British visitors to Santiago, Montevideo or Buenos Aires don’t feel terribly out of place. There are more “exotic” locations, but I feel preferences, in general, are unlikely to shock you.

That also means that in terms of business partners and contacts, you are likely to deal with experienced, educated and well-travelled professionals that will make you feel comfortable during business here.

Not sure yet? If you are unsure about doing business in Latin America, more likely than not it’s because you still need more information. That is what we can do for you: from detailed market intelligence to an overview of the continent, plus a bespoke market visit service for you to see for yourself, and our new trade show insider service to take you to those key events across the continent.

Going for it? We are with you all the way: from exploring these markets to finding partners, visiting them and even setting up your own operations.

Email our Director, Gabriela Castro-Fontoura, on gabriela@sunnyskysolutions.co.uk – let’s take it from there.

1-      Growing economies

Latin America has experienced a period of economic boom, which basically means it has the cash to pay for your goods, and the need for them. Economic growth means [...]]]> There are many reasons why UK manufacturers should be looking at Latin American export markets. Here, we briefly describe the four top reasons.

1-      Growing economies

Latin America has experienced a period of economic boom, which basically means it has the cash to pay for your goods, and the need for them. Economic growth means that cities, regions and countries are facing huge infrastructure pressures. Transport projects (from airports to metros and from container ports to car parking) are taking place across the continent. More people can buy houses, and more businesses and shops choose to locate and expand here, so construction is also booming (not to mention projects around the FIFA World Cup and Olympics in Brazil). Agriculture is moving fast and feeding a country of 600 million people and some huge export markets, like China. 

Economic growth means that, depending on what you are offering (from planes to cables, from valves to machinery) are on demand. Even in the midst of a global downturn, the IMF forecasts an average growth rate for Latin America of 3.6% for 2013, and higher for countries like Peru. If your traditional markets are stagnant, this is a key region to look at.

2-      Macroeconomic and political stability

If your image of Latin America is of an unstable continent where it is not safe to do business, you will be surprised. Credit rating agencies like Moody’s and S&P have praised the achievements of countries like Colombia and Uruguay. Yes, there are countries where it is difficult to do business in, but in general you will be welcomed by political stability and sound macroeconomic policies that receive worldwide praise.

3-      Regard for British manufacturing

British manufacturing is highly regarded across Latin America, it equates to quality and honesty, so make the most of it! I personally find that approaching potential distributors or end clients with a British brand is always very well received – there is a curiosity element because most businesses will be approached by US, Chinese, Italian, Spanish and other manufacturers first, so there is that “we are different” element, too.

4-      It is closer than you think

There are many barriers to trading with Latin America, which we cover and give thoughts on regularly on this blog, but overall, Latin America is closer than you think. Maybe not so much in terms of geography or time (and here it depends on whether we are talking Mexico or Chile), but culturally. Latin Americans are experienced in international trade, some will speak very good English and will have even lived or studied in the US or Europe, and there are no shocking cultural barriers (like is the case with China or India, for example). You will find that, particularly in the big cities, Latin America can seem rather European, and you are likely to feel comfortable doing business there.

Not sure yet? If you are unsure about doing business in Latin America, more likely than not it’s because you still need more information. That is what we can do for you: from detailed market intelligence to an overview of the continent, plus a bespoke market visit service for you to see for yourself, and our new trade show insider service to take you to those key events across the continent.

Going for it? We are with you all the way: from exploring these markets to finding partners, visiting them and even setting up your own operations. Check out our case studies to see what we’ve done for other manufacturing clients.

Email our Director, Gabriela Castro-Fontoura, on gabriela@sunnyskysolutions.co.uk – let’s take it from there.