Market Research in Ecuador
With a name derived from the equator, Ecuador is a country with a pretty diversified economy.
Having a population of 17 million, investing in this country guarantees the necessary labor and market.
Ecuador’s Strategic Industries
After witnessing shifts in global market trends, Ecuador diversified its economy by developing its manufacturing and services sectors.
Petroleum Industry in Ecuador
Although Ecuador is not among top oil producers, crude oil is its most valuable export. Producing around half a million barrels of oil per day, it has proven oil reserves of almost 8.3 billion barrels.
While extraction is relatively affordable, transporting the oil greatly increases the cost of the export. The country’s pipeline infrastructure is aging, something that could affect the country’s revenue from the oil industry.
Food Processing in Ecuador
Food processing accounts for more than half of the non-oil industry, contributing around 10% to the country’s GDP. The industry consists of both solid foods processing as well as beverage processing and packaging.
Over half of the processed products are fish and meat, which are mostly for export. Processed cereals as well as beverages are mostly for the local market.
Textile Industry in Ecuador
The textiles industry ranks second in employee numbers. It produced for the domestic market until after the country started using the US dollar as its currency.
The industry has been growing at double-digit rates with its success attributed to producing both fabric and yarn. The industry is dominated by SMEs and market entry is relatively easy. This has however made the industry highly competitive.
Mining in Ecuador
Ecuador is a mining economy whose major metals are gold and silver. The biggest mines in the country are the Zaruma and Cascabel mines. Zaruma has produced millions of ounces of gold while Cascabel is estimated to have over 2 billion tons of minerals and natural resources.
Copper mining has the potential of greatly improving Ecuador’s economic outlook. Since the metal conducts heat and electricity efficiently, its demand is increasing due to the growing interest in renewable energy.
Investment Opportunities in Ecuador
Ecuador has a skilled workforce and the right infrastructure to support its growing economy. Port infrastructure handles several thousand vessels carrying exports from the country while the Quito International Airport and local roads provide access to key growth areas.
Mining Opportunities in Ecuador
Despite being rich in base and precious metals, Ecuador is not a key mineral producer. The sector however has potential for growth and the government has opened up the industry to foreign investors.
Other than going into mineral extraction, other opportunities in this industry include mapping, geophysics, providing mining and safety equipment as well as mining software.
Agribusiness Opportunities in Ecuador
Ecuador is one of the world’s top producers of bananas, cocoa beans and palm oil. Banana cultivation and export provide a strong competitive advantage for the industry and creates a trade surplus for the country. There is however room for increased production and profitability.
Wine business can also thrive in the country due to its ideal climatic conditions for growing grapes. The country also produces pineapples, guavas and oranges. With fresh juice being common in Ecuador, an export business can be a choice, taking advantage of the low cost of production.
Manufacturing Opportunities in Ecuador
Ecuador imports a lot of machinery and computer equipment. Vehicles and electrical equipment are also part of the country’s top imports. This shows that there is an investment opportunity in the manufacturing of these products.
Challenges Facing Ecuador’s Economy
The tax and legal regulations in Ecuador are complex, something that can make business planning a challenge. Laws are often inconsistently interpreted and applied, making it difficult to enforce contracts. This translates to increased risk and cost of doing business.
Ecuador’s Economic Hubs
Quito, the country’s capital, is a cluster for investors in the manufacturing and services sectors. Hosting the headquarters and regional offices of national and international businesses, the city is the obvious business hub of the country.
The city of Guayaquil provides the right environment for investments in agriculture, transport and tourism. Cuenca city is great for tourism with its historical, architectural and archaeological artifacts driving the sector.
The Importance of Conducting Market Research
For the best chances of business success in Ecuador, investors should visit the country and build connections with local business partners. Depending on the nature of the business being set up, working with a local agent might be the best option.
SIS International Research can help investors make the right investment decisions by providing deep market insights. We are experienced in researching consumer interests and trends and providing our clients with business intelligence and market entry strategies which always work.