Food Processing / Packaging Global Market
Insights and Opportunities
Overview: Chile's food industry has the potential to continue growing, and become more efficient, cost-effective and competitive in order to fully take advantage of Free Trade Agreements signed with trade partners such as Mexico, Mercosur, Canada, South Korea, the European Union, the United States, and China.
During 2009, imports of machinery and equipment decreased mainly due to the international economic crisis, in addition to the lower exchange rate for the US$, which negatively impacts Chilean growers and exporters.
However, the country's agro-industry should continue to grow based on the excellent natural conditions and good local management of private businesses. Chile exports at significant annual rates, accounting for 10% of the country's GDP. During 2008, Chile exported approximately $11 billion worth of agro-industrial products, ranked as number 17 among the world's food suppliers. Projections place Chile among the top ten countries in food exports by 2015, with exports ranging between $15 and $17 billion.
Chile has excellent natural conditions to continue developing its agro-industrial and food industries. Its Mediterranean climate and favorable geography make it viable to produce a wide range of food products. In addition, the country is a phyto-sanitary island (desert in the north, the Andes mountain range to the east, the Pacific Ocean to the west and south), which together with a strict government policy, maintains Chile as a free country of most pests and diseases. One of the country's major advantages is also its location in the southern hemisphere, which is very convenient for counter-season exports, especially considering that the major purchasing markets are located in the northern hemisphere.
Chilean wine, salmon, trout, and fresh fruit are well recognized internationally, and even though still growing, have reached maturity as sub-sectors. The salmon growers have been facing hard times due to an outbreak of the ISA virus at salmon farms, which in turn opens opportunities for U.S. companies that export the newest veterinary products as well as other environment-related equipment and supplies. New and promising products include meats (beef, poultry, pork and exotic meats), olive oil, other aquaculture products (mussels, abalone, scallops, tilapia, oysters, catfish, etc.), dairy products, etc. As a result, great opportunities exist for new technologies, food processing and packaging machinery, and equipment that allow for improved quality, efficiency and greater production of processed food items.
Best Products/Services: In recent years, Chile's agriculture, fisheries & aquaculture, and food processing sub-sectors have become more concentrated, with a focus on producing and exporting value-added products and a growing concern for clean production. Product tracking, food safety, best practices programs and certification are important issues for Chilean exporters. Moreover, in order to reach its goal of becoming a top-ten world food supplier, the industry needs to invest heavily in R&D, technology, and to ensure access to adequate energy supplies. Most of the machinery and equipment required in this industry is imported, since local production is very basic and negligible. Now that the global economic crisis has given way to improved economic conditions, Chile's processed food production and exports should continue to grow, and to develop its excellent potential.
Import statistics for 2009 indicate the U.S. accounts for 12.6% of imports of food processing machinery and equipment, ranking second after Italy, which accounts for 14.0%. Other important suppliers include Spain, Germany, Denmark, Argentina, Brazil, the U.K. and most recently China. However, given the reputation of U.S. equipment, the more competitive U.S. dollar (vis-à-vis the Euro), and the elimination of duties on most U.S. imports through the U.S.-Chile FTA, Chilean companies are actively seeking new sources of U.S.-made food processing equipment, mainly freezing & refrigeration equipment, skinning machines, meat and bone separators, filleting equipment, meat grinders, dehydrating equipment, industrial microwave ovens, automatic stuffing, portioning, waste recycling systems, and vacuum packaging machinery.
Opportunities: The Chilean Economic Development Agency, CORFO (www.corfo.cl), has a program to attract foreign investors. CORFO funds lodging and transportation (local and regional) and participation in a weeklong program including site visits and meetings with the objective of gathering information leading to potential investment in the country. There are several contacts within Corfo, depending on the industry sub-sector involved, in relation to the foreign investment potential.