Times are changing in the world of international investment. Some of the best business opportunities are now available in Latin America (LATAM). As their economies develop so do fruitful and secure opportunities, this includes Colombia, the greatest producer of Arabica beans, Mexico which boasts the 7th largest automotive sector, Peru which excels in the mining sector and Chile which leads the way in non-conventional renewable energy sources.
“The opportunity for growth in Latin America continues to outpace those same opportunities found in more mature North American and European markets.”
— Richard L. Winston
Where Should You Invest? Stable and Profitable LATAM Sectors
There are endless amounts of attractive sectors open for international investment in LATAM. This article will look at four different countries in LATAM as well as four sectors that are particularly strong in these countries. Feel free to check our LATAM news section for more information regarding other sectors and business opportunities.
The Colombian Coffee Sector
Colombia is renowned for its high quality coffee exports which have been flooding into the EU and the US markets since the recent free trade agreements. This combined with the post-FARC peace treaties have increased accessible agricultural land and have provided long term safety. This makes the coffee industry a fruitful and stable investment. There was an increase of 9.2% in Coffee imports between 2015 and 2016 in Europe.
The potential in exporting is full of opportunity as world markets show a continuous rise in the demand for coffee. Mexico has nearly doubled its demand for coffee in the recent years and prices have rocketed. This shows you don’t need to send your cargo to Europe or the US to be profitable.
Notably Colombia often doesn’t have the technology and infrastructure to make the coffee production process fully efficient. This gives rise to a great market opportunity for international investment for individuals or companies with knowledge, expertise and connections regarding the roasting, packaging and distribution of coffee.
The Mexican Automotive Sector
Mexico has first class automotive factories and plants – some of the biggest companies in the automotive industry have factories there including Chrysler, Ford, GM, and Mazda. Honda, Nissan, Toyota and Volkswagen. This comes as no surprise if we look at both the quantity and quality of engineers and technicians graduating every year. The number is estimated to be approximately 90 000 per year. Mexico manufacturers supply 35.1% (US$5.8 billion) of the demand for components and parts that are used in the automotive die-casting/stamping processes, meaning that the remaining 64.9% must be imported. This highlights the scale of market opportunity for investors who operate in this sector. In addition, India’s vehicle exports to Mexico have seen a substancial increase of 56% from 2015 and an even greater 83% from 2014. This trend shows a strategic partnership between the two powerful nations.
Peruvian Mining Sector
The Peruvian mining sector is the backbone of the national economy, and by virtue of this, there is overwhelming government support at the local, regional and national level. This has created a positive investment climate for foreign mining companies. Significant investment in recent years has seen increases in copper, gold and base metal production in Peru, turning the mining sector into the growth engine of the country. Growth within the sector has occurred due to the completion of a number of mega projects such as the USD$ 7.4 billion Las Bambas project in addition to growth in the junior mining sector.
Chilean Non-Conventional Renewable Energy Sector
Chile is a hotbed for non-conventional renewable energy sources. This country is geographically blessed with thousands of kilometres of coastline, long and tall mountain ranges and active volcanoes. Some of the non-conventional renewable energy sources in Chile include solar energy, geothermal energy, biomass energy, wind energy, marine energy, biogas energy and small scale hydroelectric energy (up to 20mw). By the beginning 2016, Chile saw approximately 2473 Million Watts of energy being originated from non-conventional renewable energy sources. There is a huge amount of potential for the continued growth of the non-conventional renewable energy sector. Traditional historical entry barriers that have limited it in the past have been removed, allowing for an increase in international investment which has resulted in steady economic growth.
There are thriving sectors across all parts of Latin America begging for international investment. This can be attributed to numerous factors including, but not limited to:
- A large, skilled labor force
- A growing middle-class
- An abundance of natural resources
- Favourable regulatory conditions encouraging international investment
- A strong push to tackle corruption
Biz Latin Hub is a market leader in helping both local and foreign companies to successfully do business in Latin America. We can provide your business the full range of back office services so that you can focus on your core business activities.