Think Chile: a Santander interview with Mauricio Munguia

Chile is a robust, business-friendly and increasingly-diversified market. And it should be a core target for UK exporters.

Not hampered by its relatively small population (of only 17.6 million people), Chile is a robust, business-friendly and increasingly-diversified market. Its growth has averaged 5% over 30 years, it has the highest level of GDP per capita in Latin America, and has signed trade agreements with 62 countries – giving it access to 85% of global GDP. In 2010, it joined the Organisation for Economic Co-operation and Development (OECD) – the association of fully-industrialised economies. And it should be a core target for UK exporters.  

Certainly, “think Chile” was a key message of the 2016 UK Trade and Investment (UKTI) roadshow. With stops in Cambridge, London, Reading, Bristol, and Hinckley, the roadshow’s focus was to highlight Latin American opportunities for UK exporters, old and new. Fresh off the tour, Santander’s Latin Desk Head, Mauricio Munguia – having delivered a session at the event – discusses the exporting opportunities offered specifically by Chile. 

Given that Chile should be an obvious target market for UK exporters looking towards Latin America, what is the Chilean government doing to encourage trade? 

Mauricio Munguia: It is well-publicised that Chile has signed 62 trade agreements – through which it can access 85% of global GDP and 63% of the world’s population. But that’s not all. In addition to decreasing poverty levels from 38% to 8% over the last 20 years – thus expanding its consumer base – Chile has also invested heavily in technology and physical infrastructure, earning its place at number 35 in the World Economic Forum’s competitiveness ranking. Meanwhile, it is also ranked highly within the World Bank’s “Ease of Doing Business” index due to its low levels of corruption, high degree of bureaucratic and legal transparency, and commitment to economic freedom.  

What trade relationship does Chile already enjoy with the UK, and is there a particular sector that UK corporates should take advantage of? 

Munguia: Many UK exporters already have a presence in Chile. Indeed, it is the sixth largest foreign investor in Chile, with the country – in turn – representing the UK’s second largest export destination in Latin America. 

In part, this is due to Chile’s mining industry, which sees it produce over a third of the world’s copper. The UK has a mining supply chain of over 4,000 companies, with many finding opportunities in Chile. That said, openings remain in the mining sector, especially in mining-related research and services.   

The end of the commodities boom, however, along with and efforts by the Chilean government to diversify its economy, means there are now industries beyond mining that can and should appeal to UK companies. 

Where is it diversifying, and how can UK exporters benefit?   

Munguia: Chile has placed increased focus on renewable energy. Certainly, the country’s 2050 Energy Plan should provide a chance for the UK to demonstrate its strength in the renewable energy sector. 

Furthermore, Chile’s determination to accede to fully-industrialised status has resulted in a focus on upgrading its infrastructure. The government of President Michelle Bachelet is offering concessions for infrastructure projects via a Public-Private Partnerships (PPPs) structure that is very familiar to UK companies. 

Meanwhile, education and science is an area where the UK already has strong ties to Chile. UK and Chilean universities are already collaborating: one example being the collaboration between the University of Edinburgh and the University of Chile to improve the genetic resistance of salmon. Indeed, the Newton-Picarte Fund has even been launched to support further, similar, partnerships.

Finally, Chile’s expanding consumer base provides strong opportunities for UK retail companies, particularly across the food and drink industry where Tesco, Waitrose and Twinings Tea are already making their mark. 

How can Santander help companies to realise their Chilean export ambitions? 

Munguia: Despite its strong economy and expanding middle class, Chile is not often the first choice for UK exporters. A key role for Santander, therefore, is in explaining the Chilean opportunity – helping them to “think Chile”. For many UK exporters Chile is both a fresh and sophisticated market. What’s more, it is one with a high regard for British goods. Indeed, Chileans are considered Latin America’s greatest Anglophiles – meaning that “brand Britain” is very welcome. 

Of course, once exporters know why to export to Chile, they then must learn how. This is where our Trade Portal is so valuable – helping companies to identify the most suitable markets for their products. What’s more, it contains a directory of potential customers, suppliers, and even possible competitors. Through its expertise and resources, Santander can help companies identify the opportunities available in Chile, and create the networks necessary for growth. 

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John Carroll - Helping businesses achieve International success. Head of Product Management & International Business, Santander UK