Export Potential in Colombia
“The attractions are clear...Atlantic and Pacific ports, a population of 47 million people, a middle class that’s predicted to double in the next 15 years, a 4-5% year on year growth every year for the past 10 years, giving the country the third highest GDP in the region. Furthermore, from July, Colombia and the UK will be connected by direct flights from Heathrow, the first time in over 13 years, bringing the two countries even closer economically and culturally.”
Andrew Wright
A joint initiative from UK Trade & Investment, the Foreign and Commonwealth Office and the British Chambers of Commerce is opening up the world of export for UK businesses.
The Overseas Business Network initiative (OBNi) – designed to increase the range of business-to-business support on offer – is developing a host of useful contacts and practical resources in 41 high-growth and emerging markets. Designed to help UK SMEs do business in high-growth, hard-to-access markets, the Overseas Business Networks initiative has found an ideal challenge in Colombia. One of only 20 new organisations set up by UKTI to promote British exports, UK Colombia Trade has already developed a full range of exporter support services. Its CEO, Andrew Wright, describes progress so far and talks about the need to change Colombia’s international image.
Changing perceptions
“There’s an outdated image of Colombia that we are aiming to change,” says Wright. “It’s not the corrupt and drug-dominated Wild West jungle that many people still imagine”. Far from it, according to The World Bank’s independent Ease of Doing Business Index; conditions in Colombia are ranked third most favourable in Latin America, with only Chile and Peru nudging ahead. The Index is based on practical indicators such as ease of starting up, importing, exporting, protecting your business and obtaining credit, property or construction permits and Colombia is actually ranked 1st in the region and 6th in the World for Investor Protection. The UK is already the second largest overseas investor in Colombia and many companies see Colombia as a hub for their operations across Latin America.
“The attractions are clear,” enthuses Wright. “Atlantic and Pacific ports, a population of 47 million people, a middle class that’s predicted to double in the next 15 years, a 4-5% year on year growth every year for the past 10 years, giving the country the third highest GDP in the region. Furthermore, from July, Colombia and the UK will be connected by direct flights from Heathrow, the first time in over 13 years, bringing the two countries even closer economically and culturally.”
Wright and his team are determined to obliterate any lingering perceptions over the next few years and show UK SMEs that a fresh wind is blowing into cross-border trade with Colombia. Exports from the UK to Colombia grew 126% between 2009 and 2012, more than to any other global emerging market. Indeed the organisation itself is new; UK Colombia Trade was established in 2013 and Wright himself joining only in September, co-located in the British Embassy in Bogota. “Yes, we’re a purpose-built entity, focused entirely on helping customers of UKTI and British Chambers of Commerce evaluate the Colombian market and do business here. I understand why Latin America in general is an unknown quantity. Western Europe or English-speaking markets are often where UK exporters look first; Latin America has traditionally been lower down the list. Particularly when you have limited resources, like most SMEs, you can’t be everywhere at once. But we’re making it easier and more rewarding.”
Full service agency
UK Colombia Trade might be the new kid on the block compared to the more established overseas British Chambers but that hasn’t stopped Andrew Wright and his team steaming ahead with all the standardised service delivery areas stipulated by the Overseas Business Network initiative. These include: advisory services, training on the local business environment, sector specialist working groups, market research, event management and familiarisation assistance. Wright says: “We’re proactively trying to find businesses in the UK and show them that Colombia is a fresh new opportunity. We led a round-table meeting with companies from The British Chambers of Commerce in the north east of England. Now we’re helping three of those companies with market research to find a route to market and identify distribution partners in Colombia.”
In addition to core standard services, UK Colombia Trade operates on a personalised basis: businesses joining UK Colombia Trade are given a dedicated Relationship Manager to accompany them on visits and co-develop a business plan to move them towards their export objectives. CEO, Wright is considering some innovative, target-driven offerings: “We’re thinking of offering a success-based arrangement, like a ‘no win no fee’. We would charge for our services only when a client starts successful operations in Colombia. That means we’re fully invested in helping businesses get deals signed and sealed. UK businesses need to know we’re here for more than just market intelligence.”
Luxury goods and deep sea
Along with UKTI, UK Colombia Trade has identified three key sectors to focus on: retail, professional services and oil and gas. “We won’t turn away any UK business asking for export support in Colombia but in terms of where to proactively channel our resources, we are most excited about the industries where we see the greatest potential. We’ve structured our commercial team around those sectors too with an expert trade manager devoted to each.” Colombian retail hotspots are food and drink, supermarket and household products, cars, high-end fashion and luxury goods. Two UK companies are already on UK Colombia Trade’s client list: helping Prima Cheese negotiate supply contracts and identifying distributors for retailer Waitrose. Few people know that Bogota is the 2nd largest luxury goods retail market in Latin America showing 16% year-on-year growth. There’s a huge demand for quality British brands.
Similarly, Colombia is set to follow Brazil’s lead in developing offshore oil and gas. Big players like BG Group and Petrofac already see Colombia as their next key market and UK Colombia Trade’s sector specialist met with smaller oil and gas supply chain companies in Aberdeen last month and is working with Subsea7, a UK firm of seabed engineers, to help them begin operations in Colombia. Andrew Wright concludes: “We’ve already forged several opportunities for British businesses in such a short space of time. We’re sure that our role in the Overseas Business Network Initiative will succeed in getting Colombia on the agenda for many more UK exporters.”
Market snapshots
Colombia
Colombia's consistently sound economic policies and aggressive promotion of free trade agreements in…
