Doing Business In Chile

Free-market policies welcome Georgia companies.

by Lucy Soto

July 1, 2008

I t might be easy to let the South American map sway you. A company looking to expand and put the proverbial toe in international waters might be lured by the size of Brazil and Argentina. But a little research and some help shows that a long skinny country that forms the spine of the continent – Chile – deserves more than a second look.

The nearly 2,700-mile-long country of 16.5 million people is a growing market of sophisticated and middle class buyers for Georgia products. 

"While it is a much smaller market [than the likes of Brazil, where export tariffs average 60 percent, or Argentina], it is much easier to do business," says Renee Rosenheck, a senior international trade specialist at the Georgia Department of Economic Development. "If you're entering South America, it's a great entry point."

Rosenheck works with Georgia companies to identify markets and begin or increase their international sales. She says companies that trade internationally are stronger, less likely to go out of business and invest more in work force development. 

Chile is 28th among Georgia's export partners, but its status is growing. From 2006 to 2007, for example, exports from the Peach State to Chile jumped 33.5 percent, to $172 million. The exports were products like nonelectrical machinery, chemicals, computer and electronic products, transportation equipment, and paper. Last year, imports from Chile through the port at Savannah totaled more than $400 million, a 9 percent increase from 2006. Top imports include precious stones and metals, wood, fish and seafood, cereals and grains, and sugars. For Solange Warner, a native of central Chile, international trade is about getting information and getting comfortable. 

The company she founded in 2003, Atlanta-based Ashton International, consults with businesses on just about every aspect of overseas trade. Warner, who first moved to the States to go to college in Miami and earn her international business degree, thinks companies just need to have someone who can show them the ropes to help them get over their initial intimidation. 

"You have to develop a relationship with those key decision makers to be successful," says Warner, who has traveled to 52 countries and speaks Spanish, Portuguese and English. "It just takes time to educate American companies that this is going to be slow and to be persistent."

Ashton International recently won an export achievement award from the U.S. Department of Commerce and is one of the consultants to which the agency refers clients who need export help. Warner says it's important for companies to research the potential success of their products by researching the market and the commercial, political and economic risks. A consultant "that doesn't cost an arm and a leg," she says, someone that can be a single point of contact for a country, is an important first step.

"In Chile, the key factor is they've really learned to develop their economy in a way that is very similar to the United States," Warner says. "The economy is growing in Chile. There's a purchasing power that the United States should take advantage of.  The middle class in Chile have a respect for American products and services." Rosenheck agrees. Chile is "very pro business," she says. "It's a very transparent climate. ... They are accustomed to doing international trade and are very professional."    

In fact, the department opened a Georgia office in Santiago in 2005 to take advantage of the free trade agreement the United States signed with Chile the year before. It's one of 11 trade offices operated around the world, responsible for finding business opportunities, providing export assistance, conducting market research, attracting investment to the state and promoting Georgia tourism.     

Chile's trade office director, Brian Wilson, believes the country has the most modern, stable and open economy in Latin America. And with the region's highest per capita income, the market there is ideal. The main industries in Chile are mining, forestry, fruit and salmon. Chile is the largest exporter of salmon in the world, recently surpassing Norway, Wilson says. It's also the largest exporter of copper in the world.    

He organizes trade missions, at least one a year, for Georgia companies to visit the country, make connections and possibly ink deals with distributors or other partners. Wilson's Georgia contacts might be miners, cleaning product distributors or purveyors of high-tech gear.     

When a company's managers consider overseas business, Wilson suggests they first call the Georgia Department of Economic Development to discuss in detail their product or service, needs and vision of an ideal distributor.  Then, his trade office begins its work. "We research the market for them," he says. "Normally, we establish or can look for four or five potential distributors interested in that product and signing a distributorship with a Georgia company. We write a report and give an overview of that particular market. We provide all the contact data with these four or five companies. ... Then, we give them an overview of the companies' responses. And our history of what the companies look like." 

The next step is for the Georgia company to make contact and choose the best candidates.     

"If we find that the product, because of price, is off the mark, we let them know there's no chance," says Wilson, a native of Chile who has worked in business management, finance and trade for 35 years. "Or if it's a commodity product and the market is full of that, we provide that perspective."    

Chile imports products from all over the world and has signed free trade agreements with 56 countries, so it can be a competitive atmosphere. "When we send out a report on the markets, we can access all types of information regarding imports," Wilson says. "It's an excellent real world view of what's happening in Chile with competitors"    

For Warner, whether it's doing business in Latin America or anywhere overseas, international trade is a bright future for American business.    

 "I have great passion for this," she says. "This is what it takes for the world to have a global economy. ... If we're able to develop this, there is great potential out there."