Taken as a whole, South America is a huge market, but with very large differences at a country level in terms of economic performance and attitude to business. There are 12 individual nations defined by most market commentators as South American - from large players on the world stage, such as Brazil and Argentina, to smaller more regionally defined countries, such as Suriname or Uruguay.
In the UK, businesses looking to enter South America these days tend to focus on Brazil. However, all their competitors will be doing the same - and who can blame them given the comparative size and returning vibrancy of the Brazilian economy – but this narrow focus can lead to opportunities being missed elsewhere, opportunities which exist under the radar in the smaller (economically) less well known countries of the region and which are ignored by most market analysts in thrall to the development of their macro models.
The devil is indeed in the detail and much is happening across South America beyond Brazil. Colombia is undertaking huge development in infrastructure, education and virtually all key sectors following 40 years of struggle against left wing guerilla groups and powerful drug cartels. The economy is normalising and right now is considered by many to offer the best opportunities for foreign investors. Argentina's economy is also at last showing signs of life, as a result of the election of pro-business, ex Buenos Aires mayor, Mauricio Macri, to the Presidency in 2015. It will take some time to unravel and replace the populist policies of the past 12 years under the Kirchners, but the business community remains confident that better times are on the way and that Argentina will once again be open to trading with the world. Already many opportunities are open to the canny investor or exporter, particularly in food, biofuels, IT (particularly software) and the creative industries.
Other pockets of commercial opportunity (in no particular order), often ignored by British companies include:
Chile – for a long time the most stable economy in the region and because of that often referred to as the Switzerland of Latin America. Sometimes ignored because of its size. Look for opportunities in finance, BPO and services in general;
Uruguay- like Chile, small and stable, but even more so. Increasingly looking to attract the Latin American headquarters of European corporates given its “neutral “ feel and attractive tax breaks for international businesses;
Peru – a rising star that has surprised many by becoming more visible internationally in recent years and has a relatively wealthy population. President Kuczynski has been focused in particular on improving transportation infrastructure, but there are also good opportunities in IT, mining and services;
Paraguay – still a little bit in the shadows, but stable and looking to develop further its dominant agriculture sector (animal genetics, fertilisers, pest control, farm equipment, processing machinery), as well as to diversify the manufacturing and services sector;
Brief comment on a Venezuela in crisis and best ignored for now. It has been a commercial no go area for some time, due to the anti-business rhetoric and actions propounded by the successive Chavez and Maduro governments.
This article constitutes a brief excursion around South America and there is no space here to go into expansive detail. If there is a hidden theme to my words it is to say that potential investors in, and exporters to, the region should look beyond the macro reports focusing on the dominant market of Brazil and scratch the surface of the less reported-on countries and in so doing try to tease out those elusive, but profitable opportunities before competitors do.
And, of course, we would like to help. Whitefield International has local people on the ground in Latin America with experience across many markets and sectors. We help exporters and investors achieve market entry and find partners, clients and suppliers. We look forward to hearing from you.
Any company interested in opportunities throughout South America should contact us on +44 (0)1672 851802 or enquiries@whitefieldinternational.com