![3D"U.S.](3D"Guatemala_archivos/image001.jpg")
=
Doing Business I=
n Guatemala: The 2=
007
Country Commercial Guide for U.S. CompaniesAgr=
icultural
Sectors
|
|
Automotive Parts Trade Balance<=
span
lang=3DEN-US style=3D'mso-bidi-font-size:10.0pt;mso-fareast-font-family:"=
Arial Unicode MS";
mso-bidi-font-family:Arial'> |
|||
|
|
|
(US Thousands) |
|
|
|
|
2003 |
2004 |
2005 |
2006
(e) |
|
Exports from U.S. |
158,668 |
224,947 |
229,047 |
233,627.9<=
/span> |
|
Imports from U.S. |
702 |
1394 |
981=
|
1000 |
|
|
Source: SIECA |
|
|
The
Guatemalan market for Automotive Parts, Accessories and Service Equipment
continues to grow steadily. A=
round
ninety five percent of used vehicles are purchased directly from US salvaged
car auctions and are repaired locally.&nbs=
p;
In average, Guatemalans keep their automobiles for 5-7 years before
purchasing a newer model. Imp=
ort
taxes for new cars are considered high (in between 10-20%), hence purchasing
new models is not common. Giv=
en
these factors, there is a large number of used vehicles on the roads every
day. These cars require conti=
nuous
maintenance and replacement services.
Importers of automotive equipment for service stations have reported
good sales in the past two years and expect to continue doing so. Equipment is sold to local mechanic
shops, service stations and gas stations.&=
nbsp;
The enormous amount of used vehicles circulating has stimulated the =
need
for this kind of equipment. A=
utomotive
parts importers have to keep up with the demand from local importers of used
cars, who need parts to repair sometimes, severely damaged cars.
Almost
fifty percent of all Automotive Parts, Accessories and Service Equipment are
imported from the U.S. Asian
manufacturers are entering aggressively into the market with low priced
products, it is estimated that almost eighty percent of the cars circulatin=
g in
Guatemala represent Asian brands.
For this reason, the other fifty percent of imports do come from Asia
and is shared with Brazil and Europe as well.
Customs records for Guatemala rep= ort that US has a fifty percent market share, but this does not necessarily mean that products are manufactured in the US, but probably sold through an American distributor.
U.S. Auto Parts Exports to the Central American Region surpassed USD 213
million in 2005.
CAFTA-DR Impact: After CA=
FTA
was implemented in Guatemala, most U.S. Automotive parts and tire
products’ import taxes were eliminated inmediately. This represents a new opportunity =
for
U.S. exporters looking into the Guatemalan market. New vehicle taxes will be eliminat=
ed in
the next ten years under CAFTA-DR.
The most promising sub-sectors for U.S. products within the industry
include Aftermarket products such as: Bumpers, spoilers, tail lights, wheel=
s,
sound systems, alarms, tires, batteries, suspension kits, mufflers, filters,
chips, exhaust systems, brakes, windshield wipers, spark plugs, wheel cover=
s,
steering wheels, etc.
Other
promising products are service equipment such as: Lifts, tire repair,
electronic diagnosis, tire balancing, compressors, and in general all neces=
sary
equipment and tools for service stations.
There
are more that one hundred spare parts and service agents in Guatemala. Due to the large demand for afterm=
arket
products and service tools and equipment, the majority of these agents and
distributors, whether they are large size companies or a small entrepreneur,
are always open to look at new alternatives to offer their customers. It is very important to note that =
this
market is completely price driven and that Asian brands are well positioned=
in
the market, so the innovative, high tech, unusual products are a good
opportunity for US manufacturers as long as the prices remain competitive.<=
span
style=3D'mso-spacerun:yes'>
Market Size: <=
/span>Over 1,500,000 vehicles
(2006)
U.S. Auto Parts Ex=
ports:
USD 213 million (2004)
Impact of Tariff
Reduction: Im=
mediate
elimination on automotive parts tariffs, which had ranged from 1 to 20 perc=
ent,
provides immediate cost savings.
Other Trade Agreem=
ent
Impacts:
Origin rules in CAFTA-DR allow remanufactured parts to qualify for duty free
treatment potentially expanding the market for these products in the CAFTA-=
DR
region.
In Thousands of US Dollars
|
|
2004 |
2005 |
2006
(e) |
|
Total
Market Size |
$ 92.0 |
$
115.3 |
$
122.3 |
|
Total
Local Production |
45.5 |
47.7 |
50.1 |
|
Total
Exports |
2.=
5 |
2.=
6 |
2.=
6 |
|
Total
Imports |
49.0 |
70.2 |
77.2 |
|
Imports
from the U.S. |
21.6 |
28.0 |
30.8 |
(The
above figures were obtained from the Central Bank of Guatemala)
In view
that the CAFTA-DR agreement was implemented on July 1, 2006, between the U.=
S.
and Guatemala, Guatemala is
preparing to increase its production of non-traditional agricultural produc=
ts,
such as vegetables, fruits and flowers.&nb=
sp;
Guatemalan exporters wish to pursue expansion plans to not only incr=
ease
production but also to improve the quality of their products. Machinery for the industrializatio=
n and
packaging will be required which means that there are excellent possibiliti=
es
to increase U.S. exports to Guatemala.
Guatemala
has a diversity of agricultural production sectors and is a large producer =
of
vegetables and fruit. The
agro-industry and its agriculture-based service sector is the largest in the
country. There is a significa=
nt
amount of foreign investment in the food processing and packaging industry.=
Some of these companies have opera=
ted
for many years, others are more recent.&nb=
sp;
The Coca Cola and Pepsi Cola groups are an example, so are Planters,=
Del
Monte, Riviera Foods, Nabisco, Nestle, Bimbo, Sabritas, FritoLey, etc.
The U.S.
is the leader in exports of food processing and packaging equipment to
Guatemala. In 2004, U.S. expo=
rts to
Guatemala amounted to 43 percent of total Guatemala imports of this equipme=
nt
and in 2005 the U.S. reached 30 percent.&n=
bsp;
It is expected that imports could increase between 10/15 percent in =
2007.
Food
processing and packaging equipment made in the United States enjoys a high
level of recognition, acceptance and a reputation of high quality.
According
to local industry sources, the following equipment offers the best sales pr=
ospects
(in order of preference):
With
CAFTA-DR, more than 80 percent of U.S. exports of consumer and industrial g=
oods
will become duty free in Central America immediately, with remaining tariffs
phased out over 10 years. CAF=
TA-DR
establishes a secure, predictable legal framework for U.S. exporters and
investors in Central America.
Importantly,
the production plants of Guatemalan exporting companies are studying the
possibility to increase the quality and standards of their products in the
packaging sector in order to be competitive in the region.
In
addition, Guatemala continues to open small fast food restaurants or booths=
at
existing and new malls, bakeries, sandwich stands, and Internet cafes that
offer good opportunities for food processing and handling machinery. Fast food franchises are in high d=
emand.
This
fact should increase Guatemalan imports of machinery, equipment and supplies
for the food processing industry.
Guatemala: Imports of Building Product=
s
|
|
2003 |
2004 |
2005(p) |
|
total imports |
281,327,630 |
330,011,996 |
361,629,471 |
U.S. impo= rts |
76,903,204 |
71,317,822 |
65,273,481 |
U.S perce= ntage of total imports |
27.34 |
21.61 |
18.05 |
(p)
preliminary &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; &=
nbsp; So=
urce: SIECA
The construction sector in Guate=
mala has
grown and evolved substantially over the past decade. Although the sector experienced a
slowdown from 2000 to 2003, the last few years have been very good for the
sector. A big reason why the =
sector
experienced a decrease during those years was the cutback in public investm=
ent
in infrastructure and civil engineering projects. Nevertheless, a survey conducted d=
uring
the second trimester of 2003 among construction companies estimated that
although companies experienced a slowdown, they expected excellent business
opportunities in the coming years, especially in the residential sector.
This growth is most likely the r= esult of a better investment climate, a more pro-business government that took offic= e in January 14, 2004 and better mortgages and financial terms for the consumers. Everything points = that 2007 will be as good of a year as 2006.
The construction business in Gua= temala differs somewhat from the business model in the United States. While in America there are compani= es that specialize in one aspect of the business such as realtors, developers, constructors and architectural and engineering firms, often in Guatemala the same company is involved in all of those aspects; the same company will see= the project from start to finish. Although the sector has become more specialized in the past few year= s, especially on the larger and higher end projects, one still doesn’t f= ind the degree of specialization found in the States.
Another difference between Guate= mala and the United States is the preference in construction materials and technique= s. The majority of homebuilding in Guatemala is done using concrete and concrete blocks. For apartment and commercial build= ings, metal structures, steel beams and c= oncrete structures are used. Labor is fairly inexpensive compared to the United States. A building worker earns on average= USD 9 a day and a foreman earns around USD 17.&n= bsp; A lot of the construction is done manually without the use of sophisticated equipment and prefabricated items are rarely used, except in commercial and apartment buildings. This also has changed substantiall= y in the past few years with more technology and newer construction techniques b= eing applied in larger projects. <= /span>
The
following is a list of the most promising categories for 2007:
- =
tractors
- =
roads construction/paving equipment
- =
supplies for heavy infrastructure and residential housing projects
- =
structural metals
- =
bathroom wares and accessories
- =
ceramic floors and tiles
- =
shingle and roof products
- =
doors and window frames
- =
kitchen cabinets and countertops
- =
kitchen and laundry appliances
- =
plastic pipes and fixtures
- =
electrical wiring, accessories and fixtures =
- =
- dry wall
There is substantial local producti=
on
of cement, cement products, aggregates, ceramic floors and tiles, plastic p=
ipes
and plumbing products, wood and wood products, among other things. There is no real local production =
within
the higher end finishing products.
In general, Guatemala is a very price sensitive country. Nevertheless, Guatemala is also ra=
nked
by the United Nations as one of the countries with the largest income
distribution gaps, meaning that there is a good market for the higher end
products.
Many finishing, higher technology, =
more
specialized products are imported mostly from Italy, Brazil, China, Korea,
Costa Rica, Spain, Mexico, Colombia and the United States. A positive factor for U.S.-made go=
ods is
the excellent reputation that U.S. products enjoy for superior quality and
design. They are often price competitive and U.S. technology frequently off=
ers
products not available from domestic sources.&nbs=
p;
With =
CAFTA-DR,
ninety-nine percent of U.S construction equipment and over fifty-five perce=
nt
of building supply exports are now duty-free with a schedule for the rest of
the products to become duty free in the next few years.
Central
American tariffs on building supplies are higher on average than for other
products in the region, with the highest tariffs ranging up to fifteen perc=
ent
for products such as valves and home construction accessories such as fixtu=
res,
sinks and doors. =
This
should provide American companies great opportunities in the construction
sector, especially for those products that, because of tariffs, were not pr=
ice
competitive locally. Currently, tariffs on construction equipment range from
zero to fifteen percent.
Tourism gr=
owth has
stimulated growth in the hotel and restaurant industries. Visitors to Guatemala are increasi=
ng, as
the country offers all types of tourist attractions, such as historic and
archaeological sites, convention centers, shopping malls, amusement parks,
fishing, golfing, ecological resorts, rainforests, bird watching, rafting a=
nd
adventure tourism. Equipment =
and
supplies to support this sector are therefore in great demand, as the
attractions are typically surrounded by hotels, restaurants, cafes and
bars. The U.S. is the leader =
in
restaurant, hotel and bar equipment exports to Guatemala, with approximatel=
y 40
percent of the market.
The hotel
industry is expanding in urban and rural areas, mainly where tourism
attractions are. Many of the =
new
projects include bungalow-type resorts, apartment-hotels, cabins, hostels a=
nd
inns. Convention traffic is a=
lso
increasing.
The restaur=
ant
industry is growing at an even faster rate. Many first-class restaurants, fast=
-food
chains and franchises are opening, as well as ice cream parlors, Internet
cafes, donut outlets, many positioned in shopping malls and centers.
Shopping ma=
lls
are also expanding and new modern malls are under construction or being
planned.
U.S.
Competitors for equipment in this market are mainly imports from Mexico,
Germany and Italy.
Sub-Sectors
of potential in this industry are:
• Hotel
and Institutional Catering Equipment
• Commercial
Kitchen Equipment
• Fast
Food Equipment
• Food
Preparation Equipment
• Restaurant
Equipment
• Vending
Machines
• Commercial
Laundry Equipment
• Resort
Furnishing/Equipment
• Refrigeration/Freezing
Equipment
The most
promising commercial opportunities for the Guatemalan market are the follow=
ing
products:
• Cooking
appliances: ovens, ranges, broilers, grills, fryers, baking and
pasta machines
• Refrig=
eration
compressors and air conditioning
• Dishwashers
and laundry machines
• TV
apparatus and monitors
• Cateri=
ng
equipment and vending machines
• Kitchen
sundries, glassware, china, tableware and flatware
• Franchise
opportunities for restaurants and hotels
Now that the
CAFTA agreement has been implemented, more than 80 percent of U.S. exports =
of
consumer and industrial goods will become duty free in Guatemala immediatel=
y,
with remaining tariffs phased out over 10 years.
The elimina=
tion
of tariffs for products in these sectors will make U.S. equipment more
price-competitive. Other adva=
ntages
for U.S. products: virtually =
no
import restrictions; standards similar to the U.S.; a variety of qualified
agents and distributors available; growing use of English in local commerce=
.
Trade
Administration: www.ita.gov/cafta
de
Camaras de Turismo: gerencia@jaltepeque.com
=
Industria
Guatemala: gecabgua@intelnet.net.gt
Guatemala h=
as
no official figures on the franchising sector. No Franchise Association has been
formed. However, from contact=
s in
the Restaurant Association, figures such as approximately 215 franchises wi=
th
1220 outlets have been mentioned.
The market is expected to grow 10 percent per year during the next f=
ew
years.
The
ratification of CAFTA-DR – Central American Free Trade Agreement, will
increase franchise investments in Guatemala and in the rest of the Central
American countries.
Great inter=
est
to open new franchises has been shown by young entrepreneurial groups or
individuals.
Although no
specific legislation exists for the franchise industry/service, franchise
companies operating in Guatemala are subject to normal trade laws, such as
paying a tax percent on royal=
ties
and a value added tax of 12 percent.
The CAFTA Agreement is providing full market access to franchising.<=
span
style=3D'mso-spacerun:yes'> Trademark provisions will protect =
the
franchisor’s name; tariff liberalization is allowing the lower-cost
export of key equipment required to supply the franchisee; and the eliminat=
ion
of “dealer acts” will allow U.S. companies to terminate a contr=
act
with a franchisee for just cause.
Franchisors
interested in the Guatemala market are advised to register their trademarks
before they enter the market.
Trademarks, trade names, copyrights, etc. should be registered direc=
tly
by the U.S. company, with the assistance of a Guatemalan attorney.
Formal
agreements should be reviewed by a Guatemalan attorney hired by the U.S.
company (independent of the Guatemalan party with which the agreement is be=
ing
established). The agreement s=
hould
clearly state the terms of the relationship.
Best prospe=
cts
in this service are: fast foo=
d,
which is number one; convenience services:=
dry cleaning, gyms, lawn and garden, professional painters, fast shoe
repair, cosmetics, casual clothing, pest control, day-care/learning centers,
computer centers, security, advertising, real estate, auto repair and shops,
discount stores, fitness centers and convenience store/pharmacies.
Interested =
Guatemalan
investors who wish to open a franchise, are often young professionals, who =
are
familiar with U.S. business practices and who seek to break away from their
family businesses and start something on their own. These investors look for a franchi=
sor with
a worldwide presence, which is new to Guatemala but enjoys solid acceptance=
in
other markets, is honorable and reputable, and provides extensive training =
and
backup. People who currently =
own a
franchise also tend to be more open toward investing in a new one.
Foreign
franchises make up 90 percent of the total franchise market in Guatemala, w=
ith
domestic franchises accounting for 10 percent. Among the 90 percent foreign franc=
hises,
the U.S. is the leader with 85 percent of the market share and the other 5
percent are from other countries, Mexico, Europe and Guatemala itself.
The best and
most effective way to enter the Guatemalan market is through one of the
Department of Commerce’ services, such as the Gold Key Service, which=
is
designed to give U.S. companies the advantage of local expertise to schedule
meetings with pre-screened potential business contacts. In order to obtain the best result=
s,
this service will include an ad or two in the most read newspapers.
Imports of Computer and Peripherals
![](3D"Guatemala_archivos/image003.gif=)
In U.S. Dollars<=
o:p>
![](3D"Guatemala_archivos/image005.gif")
The
market for Computers and Peripherals in Guatemala is expected to grow at a =
rate
of approximately 5-8 percent in 2007.
There is no local production of computers and peripherals and all
equipment is imported mainly from the United States. The sector is comprised of five ma=
jor
authorized wholesalers and approximately 400-500 retail and small distribut=
ors
stores nationwide; most of them have an open account with the major wholesa=
lers
but are free to purchase directly from abroad. The wholesalers distribute major b=
rands
and are in advantage over the small distributors when bidding for government
tenders and large corporations.
The
computer and peripheral market in Guatemala is price driven. The “clone” computers =
are
very popular due to their low price (one third of the price of a brand name
computer). This segment accou=
nts
for 60 percent of the market share.
“Clones” are produced locally and sold to private
individuals who demand a low cost computer with post-sale maintenance servi=
ce.
The remaining 40 percent of the share belongs to large importers of OEM
products such as IBM, Compaq, Dell and Hewlett Packard.
Import
taxes for most computer and peripherals range between 0-3 percent. At present, the Industry is strong=
ly
pushing the Government to reconsider the 15 percent import tax for inks -wh=
ich
make cartridges very expensive for the end user- and digital cameras and
videos, which pay 10 percent import taxes.=
Expenditures on hardware have historically outpaced those for packag=
ed
software or services in and that trend is expected to continue.
The most
promising sub-sectors for U.S. products within the industry include: Motherboards, micro-processors, ha=
rd
drives, CD-R/RW units, DVD units, RAM,&nbs=
p;
and Notebooks.
Due to
continuous price changes in these high-tech products, distributors prefer to
have a short delivery time supplier in the U.S. This supplier is expected to have =
in
stock merchandise and deliver promptly.
Other promising sub sectors are t= he following: Keyboards, mice, cases, monitors, = color printers, scanners, multimedia accessories, floppies, CD-Rom, and network cards.
Asia is
entering aggressively the market in these sub sectors. Local distributors can manage to h=
ave
volume stock of these products due to their price stability and slower
technology changing rate.
Brand
name computers are mainly purchased in Guatemala by the national government,
the financial sector, hospitals, universities, schools and large
corporations. It is important=
to be
aware of national public tenders available on line at the official tender a=
nd
bidding site of “Guatecompras” (www.guatecompras.gt). Smaller distributors are a good ni=
che
market when offering high-tech equipment at competitive prices and for used
equipment.
Textile and Apparel Trade Balance with
Guatemala
![](3D"Guatemala_archivos/image007.gif=)
In Thousands of =
U.S. dollars
The CAFTA
countries are some of the most important suppliers of apparel to the United
States, ranking as follows for year 2005:&=
nbsp;
Honduras (3), El Salvador (5), Dominican Republic (7), Guatemala (15=
),
Costa Rica (20) and Nicaragua (25).
On the other hand, the Caribbean Basin Initiative –CBI-, and l=
ater
on the Caribbean Basin Trade Partnership –CBTPA- have made the United
States the primary supplier of textiles to the region. Under CBI and CBTPA preferential a=
ccess
was given to apparel manufacturers in the CAFTA countries that sourced their
materials in the United States.
&n=
bsp; This
special commercial relation in the textile and apparel sector is being furt=
her
enhanced as a result of the signing of the CAFTA-DR. Chapter 3, section G of the Treaty=
outlines
the rules under which the parties will be able to commercialize textile and
apparel products. Under those
terms, textile and apparel imports will be granted duty-free and quota-free
market access, provided the goods meet established rules of origin.
The Guatemalan textile and
apparel sector in 2006 was comprised of 202 apparel factories with an insta=
lled
capacity of 77,111 sewing machines and 50 textile factories. Including the 260 services and
accessories companies, the sector is responsible for 124,067 jobs. Most of the investment in the appa=
rel
sector comes from Korea with roughly 60 percent of the companies followed by
the local Guatemalans with 31 percent and the United States with 8 percent.=
One of the major challeng=
es for
apparel producers within the CAFTA countries is the availability of
fabric. Because regional
manufacturers are not able to meet the demand of apparel shops, large amoun=
t of
yarns and fabric is imported, mainly from the United States. In fact, CAFTA countries have been=
the primary
destination for U.S. exports of yarn and fabric, with these countries taking
approximately 25 percent of U.S. fabric exports and 40 percent of U.S. yarn
exports (Malone & Ramey, 2005).
On that regard, the CAFTA agreement provides a good opportunity to
cotton producers, textile machinery exporters and to U.S. yarn and fabric
manufacturers to increase export volumes or initiate exports to the region,
especially during the first few years of the Treaty.
On the other hand, The Un=
ited
States is the main export market for the Guatemalan apparel and textile
industry, to which the industry sends around 95 percent of their total
exports. According to the
Guatemalan Apparel and Textile Industry Commission (VESTEX), Guatemala̵=
7;s
geographical position and proximity to the United States gives the industry=
a
competitive advantage. Also, =
in the
last couple of years the industry has been transitioning from selling
productivity to selling “the complete package”, which includes
supplying services and basic designs. Currently, there are many busine=
sses
operating under this format. This represents an important change for =
the
Guatemalan industry, since it has just started to compete as an integrated
industry.
Countries
in Central America have strongly preferred U.S. fabrics and textile machine=
ry
for years, fostered by preferential treatment under the Caribbean Basin
Initiative and the establishment of Free Trade Zones.
U.S.
imports (machinery) have held a dominant position throughout the past decad=
e,
with some competition from Taiwan, Germany, Mexico and others. For instance:
§The U.S. has a 70 percent market share for machines for extruding,
drawing, texturing or cutting man-made textile materials, followed by Taiwan
(20 percent);
§U.S. imports account for 36 percent share of imports of knitting
machines, with Italy in second place at 19 percent.
§Germany leads in the imports of machines used in the preparation of
textile fibers, controlling a 45 percent market share, followed by US with =
18
percent.
Textile
Yarn and Fabric: Central American import statistics for 2003 also confirm t=
he
U.S. as the leading exporter in:
§Knitted or crocheted fabrics: The U.S. controlled 48 percent of impo=
rts
to the region;
§Special woven fabrics, tufted textile fabrics, lace, tapestries,
trimmings; and embroidery: Th=
e U.S.
controlled this market with a 77 percent market share.
The following is a list o=
f the
most promising sub-sector categories within the industry for 2007:
-Spinning machines;
-Sewing machines;
-Trims;
-Drying machines;
-Bleaching or dyeing mach=
ines;
-Zippers;
-Buttons;
-Trims;
-Yarn;
-Fabric;
-Boxes;
-Accessories.
Fabric produced in the Ce=
ntral
American countries do not meet demand in the region and often lacks diversi=
ty
and quantity. Under CAFTA-DR,
fabric imported from the U.S. and incorporated in the apparel production
receive duty-free treatment for exports to the U.S.; material imported for =
retail
sale in Central America will also be treated as duty free, which will give =
it a
clear advantage over European competitors.
The
market for Medical Products in Guatemala is divided in two segments, the
Private and Public Health sectors. There are eight major medical products
distributors and more than 50 small distributors operating locally. As a ru=
le,
the Private Sector mostly purchases American products due to their apprecia=
tion
of high quality products. The
Government, on the other side, is price driven and will purchase from the
cheapest bidder. Once a year,=
the
Government publishes it’s needs for Medical Devices in the month of
October. It is then when inte=
rested
parties must prepare their bids and if selected, they will be suppliers for
their one-year needs. In orde=
r to
be eligible for this bidding process, American firms must have a local offi=
ce,
agent or distributor to be considered an official supplier, and must consid=
er
that all products require sanitary registration. This registration process takes
approximately two months and has a four hundred dollar cost per product. (T=
his
price is approximate and includes most of the requirements needed). Many American firms find distribut=
ors in
Guatemala who will manage their official registrations and participate in t=
he
National Bidding Process on their behalf.
There
are no import restrictions for the importation of new or used medical equip=
ment
to Guatemala. Import taxes in the region vary: from 0-15 percent import dut=
ies
(applied against CIF value); and 12%
value added tax.
Replacement of obsolete equipment a= nd infrastructure expansions projected for hospitals, and small rural clinics, will increase imports of medical equipment in the region.
Best prospects for U.S. companies a= re for the following products:
Other opportunities within the indu= stry lie in the following disposable medical devices:
It is important to be aware of Nati= onal Procurements now available on line at the “Guatecompras” site. = The largest bids is published in October and finally negotiated in January.
Distributors are a market to pursue= , There are eight to ten large distributors and importers in the Country and many small ones willing to broaden their line of products by importing high quality and price competit= ive devices.
Guatemala: Imports of Electrical Power System=
s
|
|
2003 |
2004 |
2005(p) |
|
total imports |
74,841,105 |
73,405,580 |
97,036,745 |
U.S. impo= rts |
35,403,051 |
34,632,376 |
44,469,092 |
U.S perce= ntage of total imports |
47.30 |
47.18 |
45.83 |
(p)
preliminary
Source: SIECA
Guatemala’s electric sub sect=
or
has changed significantly in the past two decades. In the 1980’s 50 percent of =
all
generation came from hydroelectric power and the state owned company INDE w=
as
the main source of energy. In=
1996,
a new law was enacted that opened the market for new private investment and
privatized the commercialization of energy. Also, generation shifted gradually=
and
in 2005, Guatemala’s electricity came from 55 percent thermal, 33 per=
cent
hydro, 3 percent geothermal and 9 percent cogeneration.
The electric sub sector in Guatemal=
a is
comprised of the Ministry of Energy and Mines, who dictates policy, the
“Comisión Nacional de Energía”, which is the
regulatory entity, the “Mercado Mayorista” or wholesale and spot
market coordinator, the state owned company INDE that owns the major
hydroelectric plants and most of the distribution lines, an excess of 20
privately owned generation companies and three commercialization companies.=
For the energy sector, 2006 was a v=
ery
good year in which demand increased by 6 percent, dri=
ven by
a healthy economic growth of 4.6 percent in the same year. Estima=
tes also
suggest that the trend will carry to 2007 not only in Guatemala, but also in
the whole Central American Region. <=
/span>
Starting in the late 1990’= s there has been a push in the Mesoamerican region towards integration, regional development and regional infrastructure.&n= bsp; The centerpiece of this effort is the Plan Puebla-Panama, an initiat= ive to bring sustainable development to the southern part of Mexico, Belize and= the Central American countries (Guatemala, El Salvador, Honduras, Nicaragua, Co= sta Rica and Panama). Implementat= ion of this program is expected to result in over USD 20 billion investment in the region. The Central American Electrical Interconnection System Project (Proyecto del Sistema de Interconexión Eléctrica de los Países de América Central, or CIEPAC) is one of the components of the Plan Puebla-Panama, whi= ch has as it’s objective the establishment of a wholesale electricity ma= rket and the development of the first regional transmission system. The power transmission line would = have a length of 1,830 kilometers and a capacity to transport 230 megawatts of power. The entire project has= an estimated cost of USD 320 million, for which the Interamerican Development = Bank (IDB) has already approved a USD 170 million loan. Among other things, the project wi= ll also require the construction of substations and transmission towers. When completed, intra-regional electricity annual sales will be around USD 200 million.
The
following is a list of the most promising sub-sector categories within the
industry for the next year:
-Electrical power generators
-Transformers
-Hydraulic turbines
-Circuit breakers
-Switchgears
-Conducting cable
-Parts of steam and other turbin= es
Of the Central American region, Guatemala probably has the
more developed sector and the most potential for generation, especially in =
the
renewable sector. Although the
country has relied for several years on thermal energies, the Berger govern=
ment
is trying to promote investment and exploit the country’s potential f=
or
hydro energy. In fact, Congre=
ss
passed the Renewable Energy Incentive Law in 2005. For 2007, the government has alrea=
dy
approved three hydro plants: =
El
Recreo (25 megawatts), Montecristo (13.8 megawatts) and La Finca Lorena (16=
.6
megawatts). Also, the governm=
ent is
moving forward with the feasibility studies for the hydro plant Xalal&aacut=
e;
(330 megawatts), which is expected to come out for bid either in 2007 or 20=
08.
Also,
the Central American refinery project is underway and it is expected that by
July 2007, a winner will be selected.
Among the countries in the region, Guatemala probably has the
competitive advantage both in strategic location and return for investment
regarding where the refinery may settle.&n=
bsp;
The private investor selected, besides building the refinery, has to
build also a 750-megawatt plant.
Thus, regardless of where the investment chooses to go, Central Amer=
ica,
and specifically Guatemala, will have plenty of opportunities for investors=
and
exporters of electric power systems and supplies.
|
Tariff
Code 080810 |
|
||
|
|
2004 |
2005 |
2006 |
|
Total
Market Size |
8.0 |
8.5 |
11.9 |
|
Total
Local Production |
0.5 |
0.5 |
0.5 |
|
Total
Exports |
0.5 |
0.5 |
0.4 |
|
Total
Imports |
7.5 |
8.0 |
11.5 |
|
Imports
from the U.S. |
3.1 |
4.5 |
7.1 |
Guatemalan
apple imports from the U.S. have grown steadily over the past five years, e=
ven
though imports were under a Tariff Rate Quota (TRQ). Under CAFTA, which was implemented=
July
1, 2006, U.S. apples now enter quota- and duty-free. Thus, U.S. apples are now competit=
ive
with those from Chile, which had up to 85% of the import market. By 2006, U.S. apples captured 59% =
of the
Guatemalan market. Imports fr=
om
U.S. in 2006 were 36% above those in 2005.=
Apple distributors are very aggressive in their marketing strategies,
making the product available in supermarkets and open-air markets most of t=
he
year. Apple importers have to=
pay
an additional Q 0.07 (about US$0.01) per pound of imported apples, which is
given to the local growers cooperative.
The most
popular imported varieties include Red Delicious, Golden Delicious, Fuji, a=
nd
Gala.
Most
U.S. Cooperators combine Guatemala, El Salvador, Honduras and Costa Rica in=
to
one marketing region because all share cultural similarities, speak Spanish=
and
have the same peak sales periods.
Therefore, all are serviced by only two or three importer/buyer
groups. Importers of every co=
untry
have strong relationships with each other, and commercial interchanges and
negotiations take place on a daily basis.
Foreign Agricultural Service in
Guatemala: www.fas.usda.gov
|
Tariff
Code 5201 |
|
||
|
|
2004 |
2005 |
2006 |
|
Total
Market Size |
37.5 |
38.2 |
37.2 |
|
Total
Local Production |
0.0 |
0.0 |
0.0 |
|
Total
Exports |
0.0 |
0.0 |
0.0 |
|
Total
Imports |
37.5 |
38.2 |
37.2 |
|
Imports
from the U.S. |
33.9 |
38.0 |
36.7 |
Cotton
imports have been increasing in the last few years in response to the growt=
h of
the maquiladora sector, requirements for use of U.S. yarn and fabric under =
the
Caribbean Basin Initiative (CBI), and rules of origin under CAFTA. In addition, there is an allowance=
for
using NAFTA fabric for duty-free apparel.&=
nbsp;
Under CAFTA, tariffs of 5 to 14% for cotton and products were elimin=
ated
immediately. Total imports and
imports from the U.S. slightly dropped in 2006, for the only reason of late
CAFTA implementation for Guatemala effective July 2006.
Besides raw cotton, yarn and fabric imports have also increased
dramatically.
Return to top
Foreign Agricultural Service in
Guatemala: www.fas.usda.gov
|
Tariff
Code 0207 |
|
||
|
|
2004 |
2005 |
2006 |
|
Total
Market Size |
188.7 |
205.4 |
204.1 |
|
Total
Local Production |
145.2 |
163.5 |
165.0 |
|
Total
Exports |
0 |
7.9 |
8.0 |
|
Total
Imports |
43.5 |
47.4 |
39.1 |
|
Imports
from the U.S. |
41.7 |
44.9 |
37.1 |
Guatemala
is a major importer of U.S. meat and poultry. It imposes few import restrictions=
on
poultry, and imports large amounts of U.S. brand-name frozen chicken cuts.<=
span
style=3D'mso-spacerun:yes'> Prior to CAFTA implementation, all
poultry products (except mechanically deboned meat) entered with a flat dut=
y of
15 percent. With implementati=
on,
tariffs are being phased out immediately, in 5 years, or in 10 years, depen=
ding
on the product. The exception=
is
chicken leg quarters (CLQ), which enter under a TRQ and have an out of quota
duty of up to 164.4%. However,
bowing to domestic pressure, Guatemala set the out of quota duty in 2006 at
only 15%, in contrast to the other CAFTA countries which set the CLQ tariff=
at
the maximum allowed. CLQ is an
inexpensive, popular meat, and the domestic industry cannot meet demand.
There
are opportunities, as well, for the high value products that will benefit f=
rom
the drop in duties from 15% to 0% under CAFTA-DR, or other frozen products
besides chicken leg quarters.
Other
value-added products such as nuggets, sausages and chicken patties have good
opportunities in Guatemala. W=
hile
these products are already available in supermarkets and are increasing in
popularity with consumers, they still offer good potential. U.S. poultry products are very
competitive in price terms.
Foreign Agricultural Service in
Guatemala: www.fas.usda.gov
|
Tariff
Code 020-0207 |
|
||
|
|
2004 |
2005 |
2006 |
|
Total
Market Size |
150.1 |
150.1 |
150.5 |
|
Total
Local Production |
130.3 |
130.3 |
130.3 |
|
Total
Exports |
0.0 |
0.0 |
0.0 |
|
Total
Imports |
19.8 |
19.8 |
20.2 |
|
Imports
from the U.S. |
11.0 |
11.6 |
14.8 |
Guatemala
used to be a large meat exporter, but production has declined and imports h=
ave
become an important source of meat for hotels, restaurants, and higher-class
consumers. Local production i=
s of
irregular quality and supply, which is a problem for hotels and fine
restaurants, which need a consistent supply of high-quality beef. More and more, hotels and restaura=
nts
are advertising imported U.S. meats in their menus. In the period 2004-5 there was a
significant drop in U.S. exports due to the ban that existed because of the=
BSE
cases in the U.S. Under CAFTA=
-DR
Guatemala reopened its market for all beef and products. An initial TRQ of 1,060 MT has bee=
n set
for beef and 4,148 MT for pork.
Prime and choice beef cuts enjoy immediate duty-free access.
The most
commonly exported beef product from the U.S. is frozen bone-in and boneless=
50
percent trimmings, which makes up approximately 60 percent of total U.S.
exports to the region. The ot=
her 40
percent of U.S. products shipped to the region is made up of a variety of h=
igh
quality cuts for the HRI sector and variety meats distributed through
supermarkets and wet markets. There
are many meat and deli-meat processors in Guatemala that are looking at
exporting to the U.S. under CAFTA-DR and want U.S. quality product. Also, as the restaurant industry g=
rows,
so does their need for high quality meat cuts such as U.S. Prime and Choice
pork and beef cuts.
In
Guatemala, the tourism sector is growing and seeks to satisfy visitor demand
for high quality, wholesome food by using U.S. beef and pork. U.S. prime and choice cuts of beef=
enjoy
immediate duty-free access under CAFTA-DR.=
Tariffs for other red meat products will be phased out over the next=
15
years.
|
Tariff
Code 20 |
|
||
|
|
2004 |
2005 |
2006 |
|
Total Market Size |
90.3 |
99.5 |
112.2 |
|
Total Local Production |
52.1 |
52.4 |
53.5 |
|
Total Exports |
33.1 |
40.1 |
45.9 |
|
Total Imports |
38.2 |
47.1 |
58.7 |
|
Imports from the U.S. |
9.7 |
13.0 |
11.0 |
Processed fruit and vegetable im= ports have been growing in the last few years, especially canned goods with famil= iar U.S. brands. There is still tremendous growth available in this market, particularly for private label products. However, this sector faces competition from high quality Chilean products.
U.S.
products are present in almost all of the categories of imported processed
foods. Although this sector
contains a wide variety of products, in Guatemala, opportunities exist in o=
nly
five categories: processed wh=
ole
tomatoes, prepared potatoes, fruit jams and jellies, purees, and frozen
potatoes.
Although
most fast food restaurant chains import French fries from Canada, U.S. prod=
uct
has an advantage due to the elimination of import duties under CAFTA-DR.
Foreign Agricultural Service in
Guatemala: www.fas.usda.gov
|
Tariff
Code 080610 |
|
||
|
|
2004 |
2005 |
2006 |
|
Total
Market Size |
10.0 |
8.2 |
10.6 |
|
Total
Local Production |
0.0 |
0.0 |
0.0 |
|
Total
Exports |
0.0 |
0.0 |
0.0 |
|
Total
Imports |
10.0 |
8.2 |
10.6 |
|
Imports
from the U.S. |
4.9 |
5.7 |
7.4 |
Guatemala is the largest market = for grapes in Central America. Consumers now consume grapes year-round because of alternating suppl= y by the U.S. and Chile. Consumpti= on levels of grapes are higher during the Christmas season. Chile used to be the United States’ closest grape competitor before 2005. By 2006, the U.S. supplied Guatema= la with 74 percent of its grapes, followed by Chile with 26 percent. U.S. share in the market is expect= ed to increase as CAFTA-DR lowers import tariffs from 15% to 0%.
The most popular varieties imported into the country are Autumn
Royal, Red Globe and Thompson seedless grapes. U.S. exports of grapes continue to=
have
great growth potential in the Guatemalan market.
Approximately 60 percent of fresh grapes are sold via the
supermarket sector and 40% in wet markets from October through January. From February to September, 70 per=
cent
is handled by supermarkets and 30 percent by street vendor. Guatemalans are more concerned abo=
ut health
issues and now prefer to give to their children fruits and vegetables as sn=
acks
rather than ready-to-eat products.
This will increase the percentage of retailers who consider it
profitable to handle numerous varieties of grapes.
Foreign Agricultural Service in
Guatemala: www.fas.usda.gov
|
Tariff
Code 2009 |
|
||
|
|
2004 |
2005 |
2006 |
|
Total
Market Size |
|
|
|
|
Total
Local Production |
|
|
|
|
Total
Exports |
14.2 |
17.1 |
22.7 |
|
Total
Imports |
14.3 |
19.2 |
24.2 |
|
Imports
from the U.S. |
4.1 |
4.8 |
5.7 |
Because of CAFTA, tariffs on many
juices dropped from 15% to zero immediately; tariffs on other juices will p=
hase
out over 5 or 10 years. The m=
arket
has been growing in general, with a 20% increase per year for exports and 3=
0%
increase for imports. The
U.S.’ main competitors are Honduras and El Salvador. The U.S. holds roughly 35% of the
market. In 2006 the U.S. enjo=
yed
the highest level of imports since 1970.
Fruit
juice is an interesting market, as homes, hotels, and restaurants always
include fruit juices in their breakfast menu. Orange juice continues to be the
favorite.
Nearly
70% of U.S. fruit juice exports are eligible for immediate duty-free access
under CAFTA-DR. Mixed concent=
rates
and oranges have duties phased-out over 5 to 10 years.
Foreign Agricultural Service in
Guatemala: www.fas.usda.gov
|
Tariff
Code 2204 |
|
||
|
|
2004 |
2005 |
2006 |
|
Total
Market Size |
3.8 |
4.4 |
4.2 |
|
Total
Local Production |
0.1 |
0.3 |
0.4 |
|
Total
Exports |
0.1 |
0.3 |
0.4 |
|
Total
Imports |
3.7 |
4.4 |
3.8 |
|
Imports
from the U.S. |
0.3 |
0.3 |
0.4 |
In Guatemala, 45% of the imported =
wine
comes from Chile and 20% from Spain.
The U.S. holds roughly 6% of the market due to high import tariffs
(40%). With CAFTA implementat=
ion,
U.S. wine enjoys immediate duty-free access, which makes it more price
competitive. U.S. wines can e=
asily
compete with Chilean and Spanish product on quality, but lacks the name
recognition.
Guatemala
holds a Wine Festival every year during November. In the 2006 show visitors were very
positive about California wines.
Return to top
Foreign Agricultural Service in
Guatemala: www.fas.usda.gov
|
Tariff
Code 23099090 |
|
||
|
|
2004 |
2005 |
2006 |
|
Total
Market Size |
7.5 |
8.0 |
9.2 |
|
Total
Local Production |
0.4 |
0.7 |
1.0 |
|
Total
Exports |
0.4 |
0.7 |
0.7 |
|
Total
Imports |
7.1 |
7.3 |
8.2 |
|
Imports
from the U.S. |
24 |
2.9 |
3.8 |
Dog and cat food represent a stead=
ily
growing market. After CAFTA
mplementation, these products gained immediate duty-free access.
Return to top
Guatemalans
enjoy pets, particularly dogs, and many are willing to pamper their pets.
Foreign Agricultural Service in
Guatemala: www.fas.usda.gov
·
Statistical
information: www.sieca.org.gt
|
Tariff
Code 0405 |
|
||
|
|
2004 |
2005 |
2006 |
|
Total
Market Size |
111.0 |
112.7 |
113.2 |
|
Total
Local Production |
22.0 |
23.0 |
23.0 |
|
Total
Exports |
2.9 |
2.9 |
3.0 |
|
Total
Imports |
89.0 |
89.7 |
90.2 |
|
Imports
from the U.S. |
27.2 |
29.7 |
12.3 |
In Guatemala, almost 80 percent of
dairy products are imported. =
Only
20 percent of the supply in the local market is made in Guatemala. Principal suppliers include New Ze=
aland,
Denmark, Holland, Costa Rica, Ireland, the United Kingdom, and Panama. Mexico, Costa Rica and recently Ho=
nduras
have placed themselves in a good market situation with UHT milk, experienci=
ng
respectable success ($ 12.0 million value), indicating that the market is in
search of something new, of a higher quality, and with better packaging.
Dairy
will have a competitive advantage under CAFTA-DR over New Zealand. There are many dairy products that=
can
be used as raw materials for the processing industry that provide great
opportunities for U.S. exports.
High
value cheeses and butters are able to compete against European cheeses now =
that
CAFTA-DR is in place.
Foreign Agricultural Service in
Guatemala: www.fas.usda.gov
|
Tariff
Code BICO |
|
||
|
|
2004 |
2005 |
2006 |
|
Total Market Size |
65.3 |
61.1 |
68.0 |
|
Total Local Production |
0.2 |
0.2 |
0.2 |
|
Total Exports |
0.2 |
0.2 |
0.2 |
|
Total Imports |
65.3 |
61.1 |
68.0 |
|
Imports from the U.S. |
42.5 |
61.1 |
64.0 |
Since 2005, the U.S. has supplied =
100 percent
of the soybean meal Guatemala imported.&nb=
sp;
Though the import tariff was been relatively low (5%), CAFTA elimina=
ted
it. High corn prices due to e=
thanol
demand will translate into higher imports of soybean meal for feed
manufacturing.
Foreign
Agricultural Service in Guatemala: <=
/span>www.fas.usda.gov
U.S. exporters seeking
general export information/assistance or country-specific commercial
information should consult with their nearest Export Assistance Center
or the U.S. Department of Commerce's Trade Information Center at =
(800)
USA-TRADE, or go to the following website: http://www.export.gov.
To the best of our knowledge, the information contained in this report is
accurate as of the date published. However, The Department of Commerce
does not take responsibility for actions readers may take based on the
information contained herein. Readers should always conduct their own due
diligence before entering into business ventures or other commercial
arrangements. The Department of Commerce can assist companies in the=
se
endeavors.