Market entry in Latin American countries requires perseverance. A reliable partner and good references help you find customers. The corona pandemic has hit countries this spring, but Finnish companies should still keep in mind the many business opportunities that Latin America offers.

The majority of Finnish companies that have invested in Latin America are large companies. SMEs often operate through distributors in the region. The corona pandemic has accelerated digitalisation, especially in the health sector. Paper is needed in the packaging industry. Latin American countries export a lot of agricultural products, for which demand has remained high. Schedules for mining and energy projects have been postponed.

The success of trading in Latin America requires that the company is well aware of the needs of the end customer and is aware of the competitive situation in the industry. A reliable local partner and getting a reference in one of the countries in the region will facilitate market access. Often, a company has to do a pilot project at its own expense, and the buyer only decides after seeing the end result whether the product is right for him. Decisions are often made at a high level, and schedules may well be stretched.

Brazil has a good chance of coping with the effects of the pandemic

Brazil began radical action against the coronavirus in March 2020. The number of cases has increased during the spring. However, the large number of corona cases must be proportionate to the population of Brazil (230 million). Differences in disease cases within Brazil have been large, as in Europe.

Brazil, like the rest of the world, has suffered from the consequences of the corona pandemic and the economic slowdown. GDP is projected to fall by 5 to 8 percent in 2020. Due to the structure of exports and the gigantic size of Brazil, Brazil has more resilience than other countries in the region. Exports have pulled. Demand and prices for agricultural products are not expected to fall. Macro figures in June 2020 still look good. There are different tensions in domestic politics. One third of the people still support the president.

Finnish companies should study the Brazilian market

Brazil is currently expected to rise relatively quickly from the crisis caused by the corona pandemic. Extensive ambitious structural reforms are under way in the country. Taxation and administration will be developed after the pension reform. The aim is to reduce bureaucracy. The privatization program aims to improve the business environment. In the long run, Finnish companies are expected to benefit from a free trade agreement between the EU and Mercosur, which will increase European countries’ exports to Mercosur.

There is a demand in Brazil for advanced solutions

Brazil is a developed country with a leading position in several sectors in the world. The institutions are strong. The industry base is good.

Despite the short-term uncertainty caused by the corona pandemic, Brazil offers several business opportunities for Finnish companies in areas such as pulp and paper, mining, metals and sewerage, healthcare and telecommunications, cyber security, space technology and renewable energy, agriculture and agriculture. The world’s largest G5 auction will be held early next year. A Finnish company can acquire a Brazilian company quite cheaply at the moment and thus gain access to the huge Brazilian market. However, it must always be remembered that special attention must be paid to legislation and taxation if a company is starting a business in Brazil.

The corona pandemic boosted demand in the healthcare and telecommunications sectors in Mexico

Mexico’s GDP is estimated to fall by as much as 8.8 percent due to the crisis caused by the corona pandemic. However, recovering from the crisis and preparing for the future will also create new business opportunities in areas such as health and telecommunications.
In addition to the service sector and the oil industry, the pillars of the Mexican economy are manufacturing, agriculture and tourism. In terms of industrial production, the automotive industry in Mexico in particular has grown strongly.

Mexico’s free trade agreements facilitate trade

The USMCA update, the USMCA, is due to enter into force on July 1, 2020. Negotiations on the reform of the EU-Mexico global agreement have been completed and the agreement is expected to be signed in the first half of 2021.
Both agreements facilitate trade. The EU-Mexico agreement eliminates customs duties and simplifies customs procedures, and improves investment protection between the parties. Ensuring the smooth flow of supply chains is important to maximize the benefits of the USMCA. In addition to these agreements, Mexico has numerous free trade agreements with various countries and regions.

Looking to the mining, health, bioeconomy and education sectors and smart solutions

Mexico is the world’s largest producer of silver. It has large reserves of copper, and one of the largest lithium deposits in the world has been found in Mexico. Mexico is working to move to sustainable mining, which offers business opportunities for Finnish companies. The evolving regulatory environment and the extensive packaging industry are also looking for sustainable packaging solutions and substitutes for plastics.

Mexico is working to reform health care along the lines of the Nordic model. The country is also known for health tourism. The services are of high quality and the prices are reasonable. Private and public educational institutions educate students and offer a wide range of bachelor’s degrees and graduate programs, but few go through post-secondary education. This opens up opportunities for Finnish education exports.

Reducing air pollution is also a priority in a city of millions, which is why both public and private actors in Mexico City are developing solutions related to urban transport and electric cars. This opens up opportunities for Finnish companies.

Mexico also wants to increase connections to different parts of the country and improve cybersecurity. In these areas, Finns have to compete with Americans and Israelis.

Waste separation and recycling technologies, landfill rehabilitation, biodegradation projects, incineration plants and hazardous waste treatment can also bring business opportunities for Finnish companies.

The annual meeting of the Finnish-Latin American Trade Association was held on June 16, 2020. After the meeting, Finland’s Ambassador to Brazil Jouko Leinonen, Finland’s Ambassador to Mexico Päivi Pohjanheimo and Business Finland’s Heidi Virta gave their current affairs reviews.

Anne Hatanpää, Secretary General of the Finnish-American Trade Association.

Hatanpää Anne
Chamber of Finland