Markets in Latin America have not traditionally been a target for UK or South West companies that trade overseas, but this is gradually changing.
A few weeks ago, I was involved in organising a roadshow on Latin America and the Caribbean that visited Glasgow, Derby, Leeds, Reading and London. Headed by Jo Crellin, the UK’s Trade Commissioner for the region, the roadshow hosted Department for International Trade colleagues from across Latin America and the Caribbean who updated around 600 attendees on the latest opportunities.
Historically, the UK was involved in developing infrastructure and engineering projects right across the region and you can still see the evidence today. However, in recent decades this declined significantly. The UK’s annual market share of goods imported into countries in the region is now only between 1-4%; really low by comparison to our competitors. There were a number of reasons for this. It used to be quite costly to get your goods to Latin America. Payment terms were long and it was sometimes difficult to get paid. Regional currency fluctuations and devaluations increased risk, and this was exacerbated by political turmoil and sometimes protectionist market policies. Trade with Commonwealth markets, the US and EU markets grew as Latin American economies struggled to expand and control inflation. Although all these factors have improved substantially, the perception can often be that these challenges persist. However, in the last decade or so, we have seen significant change in all these areas.
In the traditional industries of energy and engineering, UK expertise is well regarded and we’re making inroads, using expertise developed in the North Sea to help with offshore oil exploration and production. Our expertise and technology is valuable in helping mining development in the region, making mines more efficient and aiming to minimise impact upon the environment (South West companies established the first mines in the region). UK companies lead the way in developing new technology, whether in mining, electric vehicles or energy efficiency; demand for this technology is growing rapidly in all markets across Latin America. In the manufacturing sector, particularly in automotive and aerospace, UK companies often supply their end user customers, such as the leading vehicle or aircraft manufacturers through distributors. Some have set up distribution facilities or manufacturing plants to service growing local industries. Most leading UK retail brands are now strongly represented in the region, servicing the growing middle class populations in all the major markets where consumer spend is on the rise and they like foreign products. More recently, the energy markets of Brazil and Mexico have opened up and demand for technology in life sciences and renewable energy is on the increase. The UK’s expertise in business consultancy is well recognised.
These are sectors where South West companies have a lot to offer. Advanced Engineering, for instance, is continuing to develop, particularly in high-tech components and new technologies. Our companies have a reputation for producing quality goods and being trustworthy, and there is a lot of goodwill towards the UK. Any company that has a unique offer, with experience of trading in other regions of the world, has potential to do well in the region.
Markets like Brazil and Mexico, because of their size, and Chile because of the ease of doing business are often the starting points. But other markets in the region are demonstrating significant growth with resulting demand for new products, technology and services. In 2017, Dr Liam Fox, Secretary of State for International Trade, visited Colombia and announced that UK Export Finance (UKEF) would double its support for trade with Colombia to £4.5 billion. UKEF also doubled its cover for Peru to £4 billion, recognising the new potential in these markets.
During the recent roadshow, companies in advanced engineering, retail, life sciences, mining and environmental technology came along to hear about the latest developments and over 320 1-2-1 meetings were held. In the South West, Business West has successfully delivered a two-year programme (Extend Your Global Reach) to support companies in the region; we helped companies win over £36m of export sales in Latin America just last year. Other companies have, with our support, found really effective local partners – this is the key.
We continue to provide focussed support to companies targeting this region. Latin America is a region that needs resource, care and attention. If a UK company has a distributor that’s not performing, or sales have dropped off, it may be that they just need to visit the market and re-engage. Business development can take time at first and you need access to top level decision-makers to make things happen. At least a couple of initial visits are usually needed before business is won, so it’s quite a commitment, especially for smaller exporters. There’s no substitute to visiting (as with most export markets) and having your senior representatives travel is critical to success, as formality and protocol are still hugely important in the local business culture. Having a senior business representative visit, at least to start with, demonstrates that your company is serious about doing business. We can help you navigate the challenges.
George Middleton, DIT’s UK Business Specialist for the region, based in the UK said that “UK companies need to know that market developments in Latin America and the Caribbean offer huge opportunities. There’s lots of support in the region to help companies secure business”.
DIT Latin America and the Caribbean have recently produced a brochure listing all the key sectors and markets in the region so that UK companies can analyse which might offer them the best opportunities: Opportunities for UK companies in Latin America and the Caribbean.
South West companies are seeing growing success in Latin America through Business West’s dedicated support services. Our Market Research team are hugely experienced at helping companies weigh up which markets offer the best opportunities and they can obtain tailored market information from up-to-date sources, on all markets. Our Export Solutions are designed to help accelerate a company’s market development, in any market, with our experienced team of Advisers.
For more information and guidance, please get in touch: email@example.com.
Demand for quality British products and services is on the rise all over the world. Find out how we can help you take advantage of these exciting opportunities today visit: https://www.businesswest.co.uk/export-management-solutions