Living in Peru : your everyday companion

Usually we dedicate this column to present possible export opportunities to the U.S., especially now that we are facing the imminent opening of the commercial agreement with that country. Nevertheless, we haven’t really talked about the business possibilities implied when importing products from that country. And even though exports are a viable business and the potential of developing our sales to the world are endless, importing represents a huge opportunity for our businessmen.

The negotiation of the Peru – U.S.A APC agreement, allowed us amongst many things, to unveil Peruvian agriculture and emphasize that just like they’re farming with enormous competitive advantages for exports, others are less productive and capable of confronting international competition. That is why public and private efforts are so commendable, as they support traditional farming substitution for the increasing international demand and its development.

By Aldo Defilippi, Executive Director of AmCham Peru

Supermarkets shelves offer a growing number of organic products that, even though at the beginning they were considered a fashion trend and only to be found in naturist and specialized stores, today they represent an important market niche and it is not surprising that everytime more cosumers buy these types of products as a result of their new consumption habits.

According to the info given by the Organic Trade Association (OTA) the industry of organic products in the U.S. including fresh and processed food, personal care articles, nutritional supplements, fibers, flowers and pet food grew 17% during 2005, amounting to sales for about $14.6 billion.

Last weekend we received the satisfactory news of the official declaration of the origin denomination for the pallar bean of Ica that will allow our country to distinguish on an international level and will provide our exporters a special advantage to access the main markets. Nowadays, the bean of Ica is the second vegetal product from Peru to obtain the origin recognition after the white corn of Urubamba. However, a lot of products are waiting for a similar distinction in order to improve their development in the international market.

Only a few Peruvians have heard of or know directly about the Tara plant, even though it originates from our territory and a few other countries in South America. Known by science as Caesalpinia Spinosa, this plant, increasingly demanded in the international market was already used 3,000 years ago by pre-Columbian cultures as a natural colorant, but nowadays it is used as an input in many industries around the world.

The main products that originate from this plant are Tara powder, used as a natural colorant for leather and as an input for plastic and adhesive production, and Tara gum, which has a wide variety of uses in the alimentary industry, for instance, as a stabilizer for milk products. Other Tara products are also demanded by the pharmaceutical industry as an input for ulcer medicines as well as those used for inflammatory and infectious problems

By: Anthony Middlebrook, Manager of Human Resources, Alicorp and President, AmCham Human Resources Committee

Almost a year ago, the AmCham Human Resources Committee proposed that there be a group of indicators that serve the companies in Peru to be able to measure certain aspects of their management, especially those related to human capital. The last measurement it had was for 2000 and it was a precise measurement, which is why information on trends does not exist.

The complicated part of projects like these is collecting companies' data and then have continuity in the process over time. For that reason, a decision was made to look for a specialized company that could be in charge of the project with the seriousness and rigidity that the handling of this information requires. The Deloitte company accepted the project, and an agreement between the two institutions was signed, in which Deloitte would be in charge of the compilation, analysis and processing of all the information. It would share the information compiled with the participating companies for free and, for a symbolic price, it would give them a more detailed version of the information obtained. If other member companies from AmCham wanted to obtain this data, a minimum referential price was set for which it could do so. This route was decided upon as an act of justice for Deloitte as well as for the companies, which worked to process the internal data and details of the indicators and to coordinate during several meetings.

So far it has made information available for 2005 and soon, it will begin to compile data for 2006. In order to select companies, it was agreed that companies be members of AmCham and also clients of Deloitte. Although the number of companies that has participated in this opportunity is relatively low (only 12), is a first big advance.

The selection of the right mode of transportation is highly related with a proper analysis of the product, the destination market and the modes of transport available in order to avoid that a competitive product fails because of its incapacity to achieve the established deadlines for delivery or that the rate of return of the operation is affected by a wrong choice of the mode of transportation.

Air transport is fast and safe, and also more profitable for small volume merchandise of great value. However, it is the most expensive mode of transportation and that explains why only a few products can stand the air freight cost.

Ship transport, on the other hand, has the advantage of being the cheapest mode of transportation in terms of cost per volume, but it is much slower. On shipment can take between 7 and 15 days to arrive to its final destination.

Road transport might be the most used mode of transportation since it is usually fast and economic to connect two destinations located close to each other.