Agritec to Chile
Trends and opportunities
Chile’s agricultural sector is the country’s second most important export industry after mining. Annual exports have averaged $US19 billion over the past three years (Source: Rabobank, Latin America: agricultural perspectives, 28 September 2015).
Similarly to Australia, Chile’s diverse climatic zones allow for a variety of crops including fruit (grapes, apples, pears, blueberries, and cherries), fish and shellfish, nuts, meat (beef, lamb and poultry), wine, wool and timber. Sales of edible fruits and nuts are the most important group of exports at $US5.8 billion, with salmon and other fish in second place at $US4.9 billion. Other relevant sectors include pulp and paper ($US2.9 billion), wines ($US1.9 billion) and meat ($US900 million).
Although Chile’s agribusiness sector continues to grow faster than the country’s overall economy, it must overcome some serious hurdles if it wishes to keep up with demand. Some of these challenges are similar to those Australia has faced and which Australian technology and services are well positioned to help solve.
- adapting to climate change
- dealing with water scarcity
- Increasing labour costs and automating processes
- pasture improvement
- genetic improvement.
Opportunities exist in the following areas:
- irrigation and related systems
- agricultural technology to replace manual processing (i.e.food processing equipment and technology)
- packing solutions for food transport and export
- sheep and beef genetics
- weather monitoring and information systems
- frost prevention / mitigation
- drought / salinity resilient seeds
- pasture improvement consultancies / research
- natural fertilisers and soil enhancers
- biological pest control
- weather monitoring, modelling and information systems.
Australian companies and entities already operating in this environment include:
- climate change: CSIRO
- water: Rubicon, Mak Water, CSIRO, GHD and Groundprobe
- technology: GP Graders
- genetics: Companies that have exported from Australia include Maquarie Dohne Merino, Kardinia and Chirniminup Dohne studs, amongst others.
- pasture improvement: Nufarm (fertilisers), South Pacific Seeds (seeds).
Chile is an attractive destination for Agritec companies from across the globe. Spanish, Israeli and American companies are very active in the water sector as are New Zealand companies in dairy.
Tariffs, regulations and customs
The Chilean economy relies heavily on trade and foreign investment and unsurprisingly, Chile’s economy is open and the country has many international trade agreements.
The Australia-Chile free trade agreement (ACI-FTA) came into force in 2009 and covers goods, services and investment. In 2015 all tariffs were eliminated with the exception of sugar. Please see the Department of Foreign Affairs and Trade website for comprehensive information on the ACI-FTA.
In 2013, the Double Taxation Agreement (DTA) came into effect. The agreement provides certainty for Australian and Chilean businesses through a framework for the taxation of cross-border transactions. It reduces barriers to the cross-border movement of people, capital and technology, primarily through reducing withholding taxes on dividend, interest and royalty payments. Further information is available at the Australian Treasury website or the Australian Taxation Office website's list of countries that have a tax treaty with Australia.
As at August 2014, Chile has 22 preferential trade agreements in place with 59 countries, including 10 APEC member nations such as Australia, Japan, Singapore, India, New Zealand and Korea.
Chile is also a member of Mercosur (Customs Union involving Argentina, Brazil, Paraguay and Uruguay), the Andean Community (Colombia, Ecuador, Peru and Bolivia) and the Pacific Alliance Agreement (Colombia, Mexico and Peru).
Chile’s FTA and DTA with Australia combined with its extensive network of agreements with other Latin American countries reinforces its position as the hub for Australian companies to expand into Latin America.
Chile is not a signatory to the Madrid convention on trademarks, so it is advisable to protect your trademark in Chile with the relevant office.
Chile is a civil law country as opposed to a common law country which has implications in the way that business is done in the country and how contracts are enforced. It is highly advisable to consult with a lawyer before entering the market. Austrade can help you with referrals to law firms.
Marketing your products and services
With more than 120 Australian companies doing business in Chile, there is a well-worn path for establishing a sustainable presence in this market. Many Australian companies seek to develop a presence through organically growing a subsidiary office, others have acquired a local company, or developed a joint venture.
Some suppliers may prefer to sell into the market through distributors or agents. This approach is less capital intensive but requires patience and a good local partner.
The best approach depends on factors such as the type of business, the appetite for risk, funds available to the company and issues around protection of intellectual property. Relationships are very important in Chile and a local partner can provide valuable connections and networks to decision makers.
Some tips to keep in mind:
- Setting-up in Chile sends a strong message to customers and signals your commitment to the market and will often convert interest into a solid commercial relationship.
- Finding a local partner or representative that can help you navigate Chile public and private bidding processes is an advantage.
- Understand Chilean Government and company structures and their process for procurement. To be successful you need to be patient, persistent and polite. It is not uncommon to have your emails unanswered.
- Prepare a concrete value proposition which clearly demonstrates how your solution has saved customers money in previous projects.
- Consider participating in energy related industry conferences in Chile. They are an excellent vehicle for gathering intelligence and networking. Austrade often hosts business networking events alongside these conferences.
Links and industry contacts
Government, business and trade
INIA – Instituto Nacional de Inovacion Agraria
FIA – Fondo Nacional de Inovacion Agraria
SAG – Servicio Agricola y Ganadero
Foreign Investment Committee (CIE)
SNA – Sociedad Nacional de Agricultura
Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.
The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:
- develop international markets
- win productive foreign direct investment
- promote international education
- strengthen Australia's tourism industry
- seek consular and passport services.
Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.
For more information on how Austrade can assist you
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