Guatemala: AGEXPORT increases business opportunities

The Guatemalan Exporters Association (AGEXPORT) launched last May the Mesa Mesoamérica initiative to help businesses like ¡Ya está!, a company that makes preserves (above), increase their exports to southern Mexico. (Courtesy of AGEXPORT)

The Guatemalan Exporters Association (AGEXPORT) launched last May the Mesa Mesoamérica initiative to help businesses like ¡Ya está!, a company that makes preserves (above), increase their exports to southern Mexico. (Courtesy of AGEXPORT)

By Antonio Ordóñez for Infosurhoy.com – 22/06/2012

GUATEMALA CITY – Mayita, a small business with 20 employees in San Juan Sacatepéquez that makes handbags, coin purses, wallets, and even shoes out of Guatemalan textiles, aspires to take advantage of opportunities in Mexico’s southern market.

“First we will explore the country and analyze the market potential,” said Elena Castro, Mayita’s marking director. “I couldn’t say for sure how much we will sell, but we believe we have a chance to expand into [Mexico].”

Castro has high hopes for Mayita in Guatemala’s northern neighbor after the Guatemalan Exporters Association (AGEXPORT) launched the Mesa Mesoamérica initiative this past May. The initiative provides government assistance for 25 small Guatemalan-based businesses seeking to expand to Mexico, Panama and Colombia by providing them with market research, which reduces the risk of exporting products that don’t sell.

“[Mexico] is a natural market for us, but it is also a natural competitor of ours,” Guatemalan Minister of Economy Sergio de la Torre said. “We have to use the geographic proximity to exploit our country’s potential.”

Juan Carlos Paiz, Presidential Commissioner for Competitiveness and Investment in Guatemala, said the southern Mexican states of Quintana Roo, Chiapas and Tabasco provide a market of 35 million potential customers. He estimated the initiative will enable Guatemalan businesses to increase their exports to Mexico within the next decade.

AGEXPORT has hired a consulting company to help the initiative achieve optimum results. The consulting company has sent representatives to Bogotá, Colombia, Panama City, Panama and Mexico – specifically Puebla State and the city of Toluca in Mexico State – to find business opportunities and promote Guatemalan products from these 25 small- and medium-sized businesses.

Guatemala exported about US$512 million to Mexico and imported US$1.858 billion in 2011, according to the Guatemalan Central Bank (Banguat).

There are 977 businesses in Mexico that import Guatemalan products annually, with transactions reaching US$488.378 million in 2010.

A Mexican citizen buys an average of US$5 in goods made in Guatemala annually. But Francisco Menéndez, president of AGEXPORT, said the initiative should increase that figure significantly.

“We have the capacity to sell US$100 [in goods] to every Mexican,” he said. “Everything we sell in the western region of Guatemala has the potential to be sold in southern Mexico, including fruits and vegetables because they are consumed throughout the region.”

Guatemala’s exports, which also include coffee and crafts, to Mexico increased 38.24% the first four months of the year compared to the same time period in 2011, according to AGEXPORT.

In 2011, about 42% (US$4.364 billion) of Guatemala’s exports went to the United States, 26.9% (US$2.810 billion) to Central America and 6.1% (US$512 million) to Mexico, with the rest shipped to mainly Asia, Canada and Europe, according to the Ministry of the Economy.

Menéndez said the initiative should spur an increase in the exportation of furniture and preserves within the next five years.

“First we have to increase exports to smaller countries in the region before we look into other large markets such as the United States,” Menéndez said.

Guatemalan authorities are also counting on last year’s approval of the Single Free Trade Agreement among Mexico, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua to motivate Guatemalan businesses to expand.

“Historically, we have a lot to say about southern Mexico,” Paiz said. “We have had a long-term relationship and our cultures are very similar. It is time to step up and get closer to them because commerce will bring lots of development to their southern border as well as to Guatemala’s northeastern region.”

Menéndez said selling products to southern Mexico should become a daily occurrence since the markets are very similar.

“The same way we sell to El Salvador or to the United States we should be selling to Mexico,” he added. “It makes all the sense in the world to go sell to them.”

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