There has been a lot of activity surrounding UK trade with Latin America recently. I attended UK Trade & Investment’s LatAm roadshow in May, which highlighted the vast array of opportunities that are available for UK businesses in the region.
Latin America has a population that exceeds that of the European Union, and so the opportunities there are numerous. When most people think of Latin America and potential trade partners, the obvious choices would be Brazil or Mexico, due to the sheer size of the markets. However, there are eighteen other countries in Latin America and these cannot be ignored. In this article, I will be focusing on Chile; not only does the country offer great opportunities for bilateral trade with the UK, but with president Bachelet’s recent visit here, this corridor is receiving high levels of attention.
Exporting has the potential to transform a business. A study by UKTI showed that 85 per cent of business leaders said that exporting led them to achieve growth that would not have otherwise been possible.
Businesses which operate in more than one market also tend to be more resilient than domestic counterparts in terms of crisis. However, exporting is not without risk, and it should be remembered that exporting is an investment and needs both time and money.
The good news is that with the right preparation, the risk can be mitigated in various ways and the time and money used efficiently. Thorough preparation can allow a business to identify where there is demand for their product or service and understand the particularities of that market which will be necessary when creating their market entry strategy.
And why Chile?
Whilst Chile may not be one of the region’s largest markets, there are several reasons for a UK company to look there for trading opportunities. Chile has a positive attitude towards international trade and has free trade agreements with more countries (62) than any other country in the region. This gives it access to 85 per cent of global GDP and is therefore one of the most globalised markets in the area.
Chile also has one of the most stable economies in the region and has seen growth average five per cent over the last 30 years, leading to it having the highest GDP per capita in the region – all good news for businesses wanting to enter the region. It was also the first Latin American country to join the OECD in 2010.
All of this means that there are a plethora of opportunities for UK businesses, but there are certain sectors that are of particular interest
- Firstly is mining. Some 60 per cent of Chilean exports are copper, and the country produces a third of global copper. This is good news for the 4,000 British companies that operate in the mining supply chain
- There are also considerable opportunities in the energy sector. The Chilean government aims that by 2050, 70 per cent of its energy will be produced by renewable sources. UK companies operating in the renewable technology sector can benefit from the fact that Chile is already the leading Latin American solar market
- Another key sector is retail. The retail and consumer market in Chile is booming and there is particular demand for health and beauty products, home and kitchen appliances, convenience foods and high-quality alcoholic drinks
Of course, trading with Chile, as with any market, does not come without its challenges. Even with the announcement that from January 2017 British Airways will be operating the first direct flights from London to Santiago, the journey times will still take almost 15 hours.
If you are planning on starting trading with Chile, you will need to visit the country, but there is a lot that can be done from the UK. The more preparation that can be done here in the UK, the more advanced your entry strategy will be by the time you actually get on the plane.
Tools such as the Santander Trade Portal can help identify the markets with demand for your product and contain a wealth of practical information on doing business overseas. Once you have identified the market, a virtual trade mission are a good way to get feedback on your product from industry experts and to pitch your products to potential buyers.
Doing your introductory meetings via video conference mean that by the time you meet face to face, the conversation will be at a more developed stage. Time is a precious resource for any business, and this will help to make your visit more efficient.
Another thing to note is that if you are going to visit Chile, it is worth hiring a translator if you do not speak Spanish. In The English Proficiency Index 2015, Chile was ranked as having “low” proficiency in English amongst the adult population.
Have a look at our other Santander new export country articles
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