|
|
Chile Food and Drink Report Q3 2008Published by: Business Monitor International Published: Jul. 11, 2008 - 52 Pages Table of ContentsAbstractMultinational food manufacturers have a long history of investing in Chile and firms such as Nestlé andPepsiCo have manufacturing plants in the country. Although, domestic consumption of processed food isrising steadily, thanks to the country’s strong economic growth, most food and drink firms investing inChile also have one eye on how they can utilise the country’s extensive natural resources and network oftrade agreements to boost their sales in markets outside of Chile.Chile has many advantages that encourage multinational firms to build production facilities in thecountry. The country’s southern hemisphere location means that it produces crops during the oppositeseasons to the world’s major consumer markets in the northern hemisphere. The country’s elongatedshape and north-south orientation also mean that harvests can be staggered throughout the growingseason. In addition the country’s relative geographical isolation, thanks to the Andes Mountains in theeast and Atacama Desert in the west, means that is free of many pests and diseases that affect producersin other countries. Finally the climate is ideal for growing Mediterranean crops, including olives andtomatoes, which can only be grown to a high standard in a fairly limited number of locations. These natural advantages are supplemented by the country’s political and economic stability and itsliberal trade agreements with many of the major consumer markets including the US, Canada, Mexico,China and the EU. Chile’s many advantages are reflected in BMI’s Business Environment Rating for thecountry, which is the highest in the Latin American region. These benefits have prompted several multinational firms to invest in Chile, with a view to creatingproducts that can be exported to the rest of Latin America and beyond. One firm that fits this model isFonterra, which in April 2008 paid US$201.9mn to take full control of Chilean dairy firm Soprole.Fonterra is likely to make use of Chile’s steadily growing milk supply and free trade agreements toincrease its penetration in China and the US as well as in the rest of Latin America. Nestlé is another firmmaking use of Chile’s natural advantages and the firm’s Chilean plants produce nearly the entire range ofNestlé products which are exported to the rest of Latin America. The firm even produces some productsin Chile for export outside of Latin America, such as condensed milk which is exported to the US. The main threat to Chile’s position as a springboard into other markets looks likely to be the rapidlyrising value of the Chilean Peso. Over the last 12 months, the value of the peso has risen by nearly 20%against the US dollar, making it much harder for Chilean firms to remain competitive in this market. Thevalue of the Chilean peso has also risen against nearly all of the major currencies in Latin America,severely cutting into the margins of export-oriented producers. Get Full Details About This Report >> |
|
|||
|
About MarketResearch.com
|
||||