In another sign that Ecuador’s economy is turning around, the government’s export promotion agency ProEcuador reports that the number of companies exporting products abroad rose sharply in 2016.
Silvana Vallejo, ProEcuador director, reports that 183 new companies, most of them small- and medium-sized, entered the export market during the last year, sending selling dozens of products overseas.
“Over the last 15 year, the number of firms entering the export market has grown by only three or four a year,” says Vallejo. “The recent growth is remarkable and we expect it to continue,” she says.
ProEcuador is especially encouraged that it is smaller companies that are spurring export growth. “This is where the efforts of ProEcuador are concentrated, helping small producers enter the world market,” Vallejo says. “In total, there are about 2,500 exporting firms in Ecuador and 60% of them have 100 employees or fewer.”
Ecuador’s Federation of Exporters (Fedexpor) is also optimistic about export sector growth. “The EU trade agreement has been huge in encouraging new businesses to begin exporting,” says director Daniel Legarda. “But it’s not the only factor. We’re seeing creative new products being produced in Ecuador and we’re also seeing rapid growth in the number of young entrepreneurs becoming interested in exporting.”
Among the new exporters are Intiorganics, which exports raw cocoa and semi-processed fruit. The firm recently began manufacturing a line of pre-packaged snack food, Wipala Healthy Snacks, using Andean grains and tropical fruits as their main ingredients.
Currently, Intiorganics sells its products in Italy and the Netherlands, but plans to expand to other EU countries. “What we find is that overseas markets are very good for our products,” says Diego Paredes, operations manager for Intiorganics. “Buyers are more sophisticated and more health-conscious and they appreciate Andean products. We are, however, planning to expand into some Latino markets, especially Chile and Mexico,” he said.
Among other new entries into the export market are producers of coffee, tea and quinoa, as well as variety of woven and ceramic crafts. Most of the new exporters are located in Pichincha (Quito), Azuay (Cuenca) and Loja Provinces, according to ProEcuador
Ecuador exporters face challenges, Vallejo says. Ecuador’s use of the U.S. dollar is a double-edged sword, she says. “The fact that the dollar is strong right now makes our products more expensive,” she says. “Our exporters have to be more creative and efficient to compete. On the other hand, since the dollar is the international monetary standard, they don’t need to spend a lot of time recalculating prices due to currency fluctuations.”
She adds: “At some point, of course, the dollar will devalue against other monetary systems and we will benefit.”