Posted On 12 Sep 2016
Central America never ceased to be an attractive market for the industry. About 60% of Ecuador’s exports that go to this area correspond to manufacturing. Now that the country is negotiating agreements with El Salvador, Nicaragua and Honduras to eliminate those entrance barriers, this promises to be a market niche with new horizons for growth.
Last week, Ecuador closed a Partial Agreement of Economic Complementation with El Salvador, which will allow that more than 200 industrial products with zero tariff enter that market. The news caused greater interest in appliances industries, which for years have targeted this market.
Xavier Mora, president of the Association of Industrialists of Appliances, said that to the extent the country closes these agreements, it will favor the sector’s exports that in 2015 totaled $ 95.9 million, a 17% less due to the currency devaluation of purchasing countries and due to the loss of the Venezuelan market. He says this convinced, taking into account the results left by the agreement signed four years ago with Guatemala. That “allowed us to stop paying 15% to 17% tariffs and to triple our sales there.”
Mora speaks of the competitiveness Ecuador would gain if facing other competitors such as Korea, Mexico or Colombia in equality of conditions, countries that already enjoy tariff exemptions in these markets. This, plus the reputation of good quality, would make Ecuadorian artifacts more attractive.
The news come well for an industry that in recent years has also lost its share in the domestic market, not only because of the high international competition that exists, but also because of changes in some rules. Among these is the extinction of gas cookers, which caused that companies like Mabe reduced its production by 20%. The company is currently manufacturing about 600,000 kitchens per year.