Tim van der Werf from Biz Latin Hub was invited to speak with the Embassy of the Kingdom of The Netherlands in Lima, Peru. In an interesting interview, Henrik Laseur, Trade, and Business Development Officer shares some of his professional insights into the commercial relationships between The Netherlands and Peru.
Biz Latin Hub (BLH): What role does the Commercial/Trade Department play as a sector of the Dutch Embassy in Peru?
Henrik Laseur: The Economic Department of the Dutch Embassy in Peru is part of a ‘triangle’. The triangle consists of Dutch and Peruvian companies, knowledge institutions like universities, nongovernmental organizations and the Embassy’s economic department.
The role of the Economic Department is to assist in the establishment of relationships between Dutch companies and organizations with local public and private actors and to develop and grow these relationships to a greater level. Another function of the department is to facilitate and carry forward professional knowledge and expertise about Dutch opportunities to Peru and vice versa. Furthermore, the department organizes business events, matchmaking sessions, and projects that encourage trade and business between The Netherlands and Peru. The Dutch Embassy in Lima coordinates operations for Peru, Bolivia, and Ecuador.
BLH: I am very interested in work that the Dutch Embassy is involved with. As a follow-up, how would you describe the commercial relationships between The Netherlands and Peru?
Henrik Laseur: According to 2018 figures, Peru ranks 6th on GDP (Gross Domestic Product – per capita) in Latin America and the Caribbean. An interesting fact is that The Netherlands is a top export destination for Peruvian products, for example in agriculture.
In 2017 Peru exported a total of USD$44.085 million, meaning an increase of almost 23% compared to 2016 vs. imports of USD$39.768 million (10% increase). In fact, over the last few years, the number of Dutch companies operating in Peru has grown impressively. 2017 exports from Peru to the Netherlands were estimated at USD$1.08 billion, representing almost 2.5% of total export.
Tim interjects…: that is amazing!
Henrik Laseur: Yes, we are a great partner for Peruvian businesses. Last year, The Netherlands ranked as the second destination for agro-exports from Peru. Peru exported around USD$876 million worth of agricultural products to The Netherlands in 2017. The Free Trade Agreement (FTA) between Peru and the EU is particularly important for the commercial relationships between both countries.
Tim interjects…: and the port of Rotterdam also, right?
Indeed, the port of Rotterdam plays a central role. One of its main functions is to transit incoming containers from countries like Peru to the rest of Europe. The shipping process takes about three weeks from the Callao port located in Lima, until arrival in the port of Rotterdam. The Netherlands is a gateway to Europe, and once arrived, containers can be transported to Italy in less than 24 hours as an illustrating example. The Netherlands is an example in terms of effectiveness and efficiency in port and logistics.
BLH: The Netherlands is considered a global leader in a range of sectors. How do you contribute to that? You mentioned mutual benefits, can you explain further?
Henrik Laseur: I consider it important to mention that the Dutch Embassy in Peru facilitates knowledge transfer together with Dutch companies and organizations through aid and trade. This involves, among others, optimizing manufacturing processes, and promoting sustainable production practices in, for example, sectors like agriculture, water, logistics, and energy. To clarify aid & trade, we always try to assist and to facilitate, not to implement.
Simultaneously, we repurchase products that are the outcome of improved production practices. This way, both countries help each other! The Dutch tend to provide commercial support in more complex water supply challenges on agricultural production sites and also by decreasing the use of pesticides by the means of smart techniques. Take avocado. After implementing Dutch knowledge combined with smart techniques and equipment, we contribute to the local market by buying an increased amount of production. Everybody benefits.
BLH: Do you have an additional interesting example of this?
Henrik Laseur: Yes, currently, a Dutch company is involved with advanced mooring solutions in Peruvian harbors. There are risks involved when mooring bigger vessels, especially in combination with relatively powerful coastal conditions in Peru. This company has developed a new innovative system that will speed up the process and increases safety and available working time. This is not only great for The Netherlands and Peruvian business but also directly contributing to a safer and more productive local environment.
BLH: The important Free Trade Agreement (FTA) between the EU and Peru was signed in 2010. How are Peru and The Netherlands benefitting from this agreement?
Henrik Laseur: Since the establishment of the FTA, bilateral trade between Peru and The Netherlands has increased by more than 40%. Partially because Peru has drastically modernized its agricultural production capacity, meaning improved market access. Trade tariffs have largely been reduced, which encourages the flow of goods and services tremendously. Likewise, new agreements speed up key approvals and authorizations needed for trade and commerce. Obviously, this has a positive effect on international trade. As a result, the number of Dutch companies with Peruvian operations is significantly increasing.
BLH: In which sectors are Dutch companies most active and which sectors offer great opportunities? I really admire the positive mindset of Peruvian people. Regarding business relationships, have you had the same experience?
Henrik Laseur: Dutch companies in Peru work in a wide variety of sectors, for example agro, water, logistics and energy. In these sectors and others, we facilitate our knowledge and experience. Water management is a prominent issue in Peru, and therefore, you can find several Dutch companies active in this field.
Some examples are Dutch companies specialized in wastewater and gas treatment. They are helping traditional energy and heavy industry sectors towards more sustainable solutions. There are also various non-governmental organizations active in the water-technology sector. They create a unique environment and have a key role in strategic cooperation for the development of profitable and sustainable water treatment solutions.
Oh, and about the mindset of Peruvians, based on my experience, people here in Peru have an extremely positive and optimistic mentality and an enormous drive to undertake business. This does not imply that it is easy to establish your company in Peru. However, with proper research and local support, you have excellent chances of succeeding.
BLH: On the Dutch Embassy in Peru website, you describe the importance of sustainability in Peru. How are Dutch companies involved? Have there been any sustainability projects in Peru that have had the participation of Dutch individuals and/or companies?
Henrik Laseur: Sustainability doesn’t so much focus on individual projects in our case, but is present in almost everything we undertake. Essentially, all our activities meet the Sustainable Development Goals (SDG’s).
As we confirmed during the Paris Agreement, the climate action goal is one of our key priorities right now. Not only have the Sustainable Development Goals provided us with direction to help promote sustainable activities in Peru. In addition, the demand for sustainable goods from The Netherlands helps local business in Peru to become more sustainable. For instance, the Netherlands has a relatively big demand for certified wood (for example FSC-certification).
We organize a yearly event that is called “Bicicletada”. This is a biking tour through Lima to encourage people to use bikes as a sustainable means of transport, instead of cars (and fuels). So, I assume you are wondering how a bike tour can make a difference. First, several Dutch companies are involved and sponsor the tour and make such events possible. In April this year, we expect more than 6,000 people to attend. Last year, Peruvian president Martin Vizcarra was one of them. More particularly, the promotion of cycling serves to push a significant part of our expertise in an urban planning context and contributes to creating a platform for other activities. Dutch experts are involved with knowledge and practical solutions like smart traffic lights for example.
BLH: That is a beautiful initiative! This will put cycling on the map. I already noticed the blocked main road for cars on Sunday, where many people cycle, run and skate during the morning. The Netherlands is helping to improve urban planning in Peru as well?
Henrik Laseur: Yes, especially in Lima. In March, the Dutch Embassy will organize a new event together with the Peruvian port authority: Port of the Future. Referring to the triangle, together with government institutions, private stakeholders and universities we organize a workshop in which we sketch a situation to construct the “ideal” Peruvian port.
BLH: It is great to see all of these upcoming events. How do you see the future relationships between Peru and The Netherlands in regards to trade and commerce?
Henrik Laseur: Peru has applied a free trade policy for 25 years. We expect the Peruvian economy to continue growing in the upcoming years. In addition to the Peru – European Union Free Trade Agreement (FTA), Peru is also a member of the Pacific Alliance. This not only encourages bilateral trade between Peru and The Netherlands but also trade with neighboring countries. The FTA that you mentioned offers increased investment opportunities for Dutch investors in a wide range of sectors, among others agriculture, water management, and logistics.
To mention one specific example, Peru is in the process of developing so-called “smart cities”. The use of information technology to govern a city involves great business opportunities that Dutch investors and other foreign investors should definitely keep in mind the upcoming years as there will be so much exiting opportunities.
Thanks to interesting insights provided by Henrik Laseur, we see that Peru offers an attractive business environment for Dutch companies in several sectors.
Nevertheless, setting up operations overseas can be challenging without the right know-how and local support. Biz Latin Hub offers an experienced team that can assist with your global expansion. For more information, get in contact today via [email protected].