Why invest in the Agroindustrial Sector in Guatemala?

I would like to start by thanking AMCHAM for this opportunity of telling the business community about our productive and commercial experience in this beautiful country.

From a historical standpoint, we must bear in mind that agriculture has existed practically forever, since its origins are prehistoric and its development came about in different cultures that practiced it, if not simultaneously, at least independently, such as the ones that arose in the Fertile Crescent (from Mesopotamia to ancient Egypt), as well as in our own Pre-Columbian cultures of Central America and the Chinese culture in East Asia.

In this context, Guatemala has several advantages with respect to other countries in the world, particularly its favorable agro-environmental conditions, since it is located in the tropical area of the northern hemisphere, which gives it a large variety of altitudes, from sea level to 4,200 meters in altitude. It possesses about 360 microclimates, which allow it to offer a variety of quality products, in addition to enough raw materials practically year-round. This makes it a country that with few exceptions is very attractive for domestic and foreign investment.

It is worth noting that according to Bank of Guatemala (BANGUAT) and Ministry of Agriculture, Ranching and Food (MAGA by its Spanish acronym) statistics, the agricultural and ranching sector of Guatemala generated 13.6 percent of the gross domestic product (GDP) in 2014, and made a significant contribution to foreign exchange income and job generation.

According to National Statistics Institute (INE by its Spanish acronym) 2012 and 2013 job and income surveys, the economically active population in Guatemala is 6.2 million persons. Of this total, agriculture employs 31.3 percent (1.9 million). Women account for 35 percent and men for 65 percent. Of the 108,889 square kilometers, it covers, 26 percent are suitable for agriculture.

The information on Guatemalan participation in international trade is shown in the following table:

As the table above shows, the behavior of total exports has remained static, with an annual growth rate of 0.66 percent during the last five years, whereas exports of the non-traditional agricultural sector have experienced a cumulative annual growth rate of 6.32 percent during the period 2011-2015. They rose from US$554.7 million to US$708.8 million and their relative participation in total exports went from 5 to 7 percent during those five years.

The main agricultural products are:

(a) Traditional products: coffee, sugar, bananas, cardamom.

(b) Non-traditional products: melons, pineapples, apples, lemons, plantains, papayas, blackberries, raspberries, green beans, cuttings, cauliflower, cabbage, potatoes, broccoli, tomatoes, pimientos, onions, carrots, sweet corn, flowers, foliage, crustaceans, fish and basic grains such as corn, beans and rice.

Our companies’ investments date back to 1950, when my father started growing cotton. Cattle and horse breeding were added subsequently (for three decades) and I took part in these, working closely with him.

After finishing my graduate studies in agronomy at Texas A&M University, considering the aforementioned variety of microclimates and Guatemala’s strategic position with respect to the United States market, the largest in the world, I had the vision of diversifying the family agricultural business and starting producing, first raspberries and later blackberries for export. This became the largest berry producing operation in Guatemala and we are now exporting strawberries and blueberries as well.

To offer our customers a wider range of quality products, we expanded our investments and added the production of vegetables (snow peas, sweet peas, green beans and baby vegetables) to our exportable offerings.

These projects did not stop there. In view of the extraordinary conditions for investment in Mexico (in terms of incentives, contracting conditions and particularly the proximity to the United States market, among others), we invested in that neighboring country and in Chile. We still have confidence in our country and thus, combining our productive capacity in Mexico, Chile and Guatemala, we are able to supply fresh, healthy, quality and safe products 365 days a year.

We will continue investing in agricultural export crops in Guatemala, because in addition to the advisability of growing the manufacturing industry and the different services (banking, logistics, technology, etc.), human beings can never subsist without agriculture. If it were to disappear, how would they survive and develop without food?

Leave a Reply