Brazil? Argentina? This is the time to look at Uruguay.
Uruguay is a small country in terms of population (just over 3 million people) and size (in relation to other Latin American countries, but still not small for European standards). If it is such as small country, in a continent of vast opportunities, then, why should you be considering it at all?
First of all, Uruguay has a strategic location between Argentina and Brazil. Due to its geography, it is easy to use it as a base for both giant countries. It also has a great natural port ideal for container ships.(map source: CIA World Factbook)
Uruguay can claim to have a stable government and strong macroeconomic management. No central bank and currency barriers make it easy to deal with, coupled with legislation that is respected and clear. Corruption exists, but it is definitely lower than in Argentina or Brazil. Stability is key. Uruguay is small but stable. That is why so many international businesses, from manufacturing to services (especially financial services) choose Montevideo, and why so many international businesses have recently fled from Argentina to establish themselves in Uruguay. It is much simpler to do business in Uruguay than in Brazil, less bureaucracy, more stability. That is why Uruguay has attracted investment from all over the world.
This is the time to look at Uruguay. And the national government know it, that is why they have been promoting the country heavily abroad, reassuring Spanish businesses and investors when Argentina has failed them, and attracting key players from all over the world.
At a business level, during a recent trip, I spoke to importers in Uruguay, from food and drink to nursery products. They say that they don’t want to benefit from the misfortunes of others, but that the chaos in Argentina (in terms of import barriers, currency restrictions, and so on) is highly benefiting them. “The advantage we have” – told me an importer of fine food and drink –“is that, for our client, we can guarantee small but steady sales in Uruguay, with higher volumes when things are ok in Argentina, but when things get difficult there, like now, we just shut that channel and keep going here, which means we are still building the brand there, and can open the channel as soon as things clear. Our clients don’t have to worry about Argentina, we do it for them”.
Another importer told me that “we have exclusivity for our brands in Uruguay and Argentina. Our clients want to deal with us here because they trust us, we are small, but we can reach Argentina in less than an hour – and we know how to do it, when it is possible and when it is better to just leave it”.
We wouldn’t recommend targeting the whole of Brazil from Uruguay but, as one experienced importer mentioned: “Brazilian tourism is huge in Uruguay, particularly in Punta del Este. That makes it a great test market for a product you might want to place in Brazil later on. You start building the brand and start getting to know your consumer. And we can target the South of Brazil from here”.
So maybe the Switzerland of South America could be your key to exporting to the region?
Do let us know if you have any questions or if you want to explore opportunities in the region further.
Following on from this topic, next time we will explore why you might want to know more about the free trade zones in Uruguay, as entry points to South America…