Last Friday, 27th October 2017 the Chamber of Commerce of Castellón held an event that had as objective to explain how to do businesses in the Latin American country of Chile, giving an economic and commercial outlook of one of the most productive and open economies of Latin America.
The conference was hold in collaboration with the Spanish Embassy in Chile, specifically with Carlos Robles Fraga who is the Spanish Ambassador since May 2014 in this Latin American country, and with the sponsorship of Banco de Santander, that was represented by Adrián Argilés Martínez.
Firstly, Leopoldo Monfort, vicepresident of the Chamber of Commerce of Castellón, explained some data about how Chile is related to Spain in business terms. As he explicated, Chilean imports from European Union have increased in last years, but the ones that has done it the most are from Spain with an increase of a twenty four percent since 2014. However, the forecasts explain that the rise of our exports to the Latin American country will continue as this country has great opportunities for Spanish companies.
After Leopoldo Monfort, Carlos Robles Fraga gave an impressive outlook of how the Chilean businesses work, and how some of these facts also appear in other countries of the continent.
The Spanish Ambassador in Chile explained that our country exports more to Portugal than to all Latin America, so there are lots of opportunities for our enterprises, but we need to take into account that our cultures are different. As we speak the same language, most business people consider that our way of doing businesses are similar, but there are not.
Carlos Robles explained that our communication methods are quite different, especially on nonverbal communication aspects because they are less direct than Europeans. For example, if we make an offer and their answer is a silence, we will need to consider it as a no. In addition to this and as most people will probably know, it is important to avoid comparisons with Spain as it makes them remember about the colonialism period that it’s a taboo for most citizens. Another subject that we should avoid talking about is politics, as it will be explained with more details after.
Chilean managers are usually more cautious than Europeans, so if you want to do business with them you will need recommendations from other Chilean companies. In addition to this, while selling to final consumers, citizens also tend to ask about recommendations to family and friends. From my point of view, this could be considered a common trend on emerging markets as it also happens in other countries as China.
According to the Spanish Ambassador in this Latin American country, it is also of crucial importance to consider that Chile is a centralized country, and so are their companies, so decisions are usually made by top managers, usually located in Santiago, the capital.
Another important aspect that has been commented before, is the political stability. Chile had always had a high level of stability that was disrupted in 1973 with the coup d’état of Pinochet, giving instability to the country and citizens. After this difficult period, Chilean citizens prefer to avoid talking about politics and the political parties have similar ideas about how should be the country, giving stability to the country.
Despite the idea of corruption in Latin America, Carlos Robles Fraga explained that Chile is a country in which legality has a lot of importance and contracts are usually much longer than in Spain because all important issues need to be explained there; so, it is crucial to have a good lawyer in order to help you with this area. A clear example of this is that the Constitution and other law books are sold newsstand.
Then, the Spanish Ambassador gave an outlook to the most important sectors of the Chilean economy and the opportunities for the Spanish companies. As he illustrated, nowadays, the most important areas are mining, agriculture, services for aged people and tourism.
Firstly, the mining industry, especially on cooper as 50% of its exports are this material, has high salaries but there is a need of reducing costs, so an opportunity for Spanish enterprises would be to increase productivity allowing them to achieve this objective. However, it is important to consider that managers from this sector are usually more cautious than others, so it will be difficult to make businesses with them and the relationship will probably be long term.
Secondly, another opportunity for our companies would be in the agriculture, especially on fruits and wine, as there is a need of reducing costs and water.
Another opportunity for Spain would be in the tourism sector and services for aged people as its demand is increasing, but Chilean companies do not have experience on it.
In addition to this, it is important to keep in mind the construction industry, which growth has reduced, but is willing to increase again in 2019.
Finally, Carlos Robles Fraga explained that the only sector in which Spain can compete is the fishing one as it is prohibited to enter fish to Chile as they have too much stock, especially of hake. However, this may change in the near future as the government has realized that it could be an opportunity to open their ports to these products. However, Spain would still not be allowed to commercialize fish in Chile.
Finally, after the intervention of the Spanish Ambassador, Adrián Argilés Martínez, from Banco Santander, explained some tools that the company has for their clients who want to internationalize as Santadder Trade that allows companies to look for markets, partners, imports growth, etc.
From my point of view and to conclude, this conference was of high importance as the Ambassador helped us to get a general outlook of how to do businesses in Chile, not with data, but with his large experience with the country.