Australian Companies in Latin America – Not Just A Pipe Dream
Australia has one of the healthiest and self-sufficient economies in the world. Situated on an entirely opposite side of the world, this land from down under still manages to lay a huge impact in global trade. Meanwhile, Latin America boasts its core advantages, including sheer diversity and welcoming atmosphere. Qualities like these are too tempting to decline; not even those from faraway lands would pass up. Certainly, forming Australian companies in Latin America has huge potential, just like in any other foreign powerhouse.
Latin America´s prior nationalist attitudes are now slowly changing. While nations like Ecuador and Venezuela are still on the fence about foreign investment, Mexico, Peru, Colombia, and Chile are opening up. Evidently, these more openhearted regions reap the economic and social benefits. Even Argentina, which voiced out its anti-investment views decades ago, is realizing that globalization is the current trend.
People only view Latin America for its strong mining sector but overlook or undervalue other industries. To set the record straight, the region has been doing great in international trade, agriculture, and engineering as well. This article will cover the opportunities that allow a successful establishment of Australian companies in Latin America. If you need more information regarding future investments in Latin America, you have to consult a trusted local company.
Linking Australia to Latin America
Australia’s biggest trading partners remain to be Asia, USA, UK, and New Zealand. With Latin America’s emergence on the stage, it’s about time for Australia to extend its reach further. The partnership is already present, but it can still improve and prosper.
Aside from trading of products, the education export sector is also rising in Australia. The spreading impact of globalization has formulated a universal language that connects everyone despite linguistic barriers. In fact, more Latin Americans have been learning and using English as a second language. Australia’s has an outstanding quality of higher education, which is why there’s an influx of Latin America students studying in this country.
This growth in foreign students contributes to the economy in many ways besides tuition fees. Latin American students can adapt well with Australian culture, incorporating it into their daily lives. For instance, there are more than 1000 Mexican students enrolled in Australian higher education institutions recently. The numbers are expected to continually grow in the upcoming years.
Here are some of Latin America’s premier exports, which Australia can capitalize on:
Vegetarianism and veganism are taking the world by storm. Having said that, the demand for beef still remains very high. According to a study, Latin American nations like Argentina, Uruguay, and Chile have the highest number of beef consumers per capita in the world. It is actually unsurprising that Argentinian steakhouses are common.
Since there’s a high consumption of beef in these areas, it’s natural for beef production to be high as well. While Australia shares the same (or even higher) rates, trading with Latin American countries could speed up the process of production. Thanks to technological advancement, genetic animal engineering has improved.
Alvaro Rojas, Chile’s Minister for Agriculture, is looking for more ways to enhance the Chilean beef and livestock industry. Australia has been known for pioneering its livestock genetic technology. This opportunity is attractive for Australians, especially after the Australian-Chile Free Trade Agreement of 2009.
Colombia’s main export is coffee. It’s an important commodity which enabled the country to become more developed and business-oriented. There are various factors that led to its occurrence. These include high European demand, first-class coffee beans, and the new post-FARC era. Combining these attributes opens great opportunities for Australian investors in the Colombian coffee industry.
Colombia is the principal producer of mild washed Arabica coffee in the world. In 2016, the nation has produced and exported 14.2 million bags of coffee beans for commercial use.
Australian Companies in Latin America can do the following in starting their business:
Buying Land for Farming: Land is an indispensable asset which investors can use long-term. When purchasing a piece of land, make sure the soil is rich and the temperature is just right for planting. As much as possible, buy arable land from farmers to save time looking for workers. These farmers would be happy to keep their jobs as well. Also, find farmers with up-to-date equipment for more efficient farming processes. This way, your business can generate income while helping local communities.
Setting up a Cooperative: Form a community with local investors with similar interests and goals as you do. This enables cooperation as you share local knowledge, modern farming techniques, and equipment with each other.
Offering Services: There are quite a few Latin American farmers possessing the most current technology and infrastructure in the agricultural industry. Most of them still utilize traditional methods. This rings a bell for the formation of Australian companies in Latin America, specializing in the modernization of equipment. Companies may impart knowledge, expertise, and resources that hastens the farming, roasting, packaging, and distribution of crops.
Globally, Australian mining companies have always been on top of exploration, mining equipment, technology, and service sectors. They could use these skills and knowledge by forming extensions of Australian companies in Latin America.
While the Latin region’s mining industry continues to grow, there’s still long ways to go. Investing in this area won’t only extend Australia’s global reach, but also escalate Latin America’s economic progress. There’s nothing to lose, really, as the region offers the following:
- Abundance and diversity of natural resources
- Reforms in government policies that encourage foreign investors
- Low start-up expenses
- Large and skilled labor force
For decades, major mining companies such as Rio Tinto and BHB Billiton have been operating in Latin America. However, more entrants are joining this industry. Given the assets Australian companies possess, it’s never too late for them to expand their realm.
Latin American Countries’ Mineral Exports
Many Latin American countries are naturally endowed with mineral deposits. These resources are just seemingly waiting to be discovered. Australian companies in Latin America can get the most out of these hotspots while they are still fresh.
Colombia is a land with an abundance of emerald mines. This presents openings for companies to invest in these mines. Australian companies in Latin America may provide training, services, procedures, and equipment to increase efficiency and production. The government is still moving forward to advocating ethical mining practices, which is already a good start.
Mexico’s mining industry amounts to US$5.5 billion in investment, according to a recent study. Its government strongly promotes foreign investment and trade policy, especially for this sector. Foreign investors in Mexico have been enjoying full ownership of capital from mining assets. While this benefit has a 50-year concession period, companies may renew for another 50 years after the period has expired.
Chile has 100 million tons of fine copper deposits which is approximately 30% of the global reserves. In addition, experts consider Chile as the safest and most profitable Latin American nation to conduct business with. Actually, there are around 30 operational Australian junior mining companies in Chile already. This success is due to the following:
- Australian-Chile Free Trade Agreement of 2009
- Transparent, upfront business setting
- Authorization of 100% foreign ownership over capital
- Incentives for foreign companies operating in remote areas.
Australian investors can implement technology systems like OHS training, water management, community mapping, appointment consulting, and computerized management systems.
We have seen how the 2000 Sydney Olympic Games displayed purely magnificent and systematic flow of events. As a result, organizers have contracted Australian companies for the succeeding Summer and Winter Olympics, Commonwealth Games, and Rugby World Cup tournaments. This just proves how serious Australia is when it comes to organizing large-scale gatherings since it requires advanced skill in engineering. The construction of that dome is definitely not something to scoff at.
Meanwhile, Lima will be hosting the Pan American Games in 2019 at Lima, its capital city. This calls for Australian companies in Latin America who are ideally suitable for this large-scale event. As of now, organizers are looking for prospective engineers and builders. Of course, Australia is on top of the priority list.
These sporting events are momentous and they don’t come very often. However, these instances are just the bigger picture of how outstanding Australia is when it comes to engineering. Improving the Latin region’s infrastructure, renewable energy, automotive supply chain, highways, and railways seem plain compared to Olympics. However, Australian companies in Latin America could offer their skills and equipment to make the most out of these projects.
An Australian-Latin American Partnership Certainly Works!
Both Australia and Latin America have the power to leave an impact on the world economy. It is not surprising to see that these regions complement each other, despite geographic and language barriers.
This article provides an understanding of major profitable investment opportunities which Australian companies in Latin America can maximize. If you need more information related to these attractive prospects, get in touch with Biz Latin Hub. We wish you the best of luck with your future business endeavors in this region.