Current situation

Ecuador produces 240,000 tons of cocoa, of which it exports about 88% and the remaining 12% is used as raw material locally. Currently there are about 500 hectares planted, however this value may increase if the plantation productivity is increased. The potential of the industry in Ecuador is high, as it can get processed cocoa internally to supply local consumption. It is estimated can be reached USD 5.117 M.

By 2025, the production of cocoa and chocolate present revenue of around USD 3,100 M and contributing to the country’s trade balance of USD 3,000 M. An investment of USD 700 million for the consolidation of around 15 industrial plants that generate about 11,500 direct jobs would be required.

The manufacturing sector, including manufacturing are cocoa, it represented 12.7% of total GDP. Production increased 31% from 2010 to 2012.

The following Ecuadorian Cocoa products include:

  • Cocoa beans
  • Cocoa liquor
  • Cocoa butter
  • Cocoa paste
  • Cocoa powder
  • Premium chocolates and gourmet

Investment in the sector

Total investment in the manufacturing sector is USD 107.6 million between 2010 and 2014. FDI in Cocoa beans in 2014 was USD 38.9 million.

The most representative investment in growth was Emirates United Arabs, which grew 217% in 2014 compared to 2013.

Production costs in the sector

The costs of operating in Ecuador are 8% less than the average annual cost of competing countries.

Comparison operating cost per country
Country Total Cost (USD)
Ecuador 3.087.821
Colombia 3.201.975
Guatemala 3.431.962
Brazil 3.933.139

Factors influencing investment

World Entrepreneurs perceive that Ecuador has an excellent business climate and a better life style, compared to other competitors.

Country Business climate Life style
Rank Score Rank Score
Ecuador 1 11,12 1 10,08
Brazil 3 9,88 2 9,93
Guatemala 2 10,46 4 9,22
Colombia 4 9,18 3 9,22

Indicators:

  • Ease of access to loans
  • Efficient legal framework for resolving disputes
  • Number of days to enforce a contract
  • Protecting intellectual property
  • Availability of scientists and engineers
  • Infrastructure quality
  • Cost of living index
  • Quality education system
  • Best Life expectancy at birth

Incentives for sector

Cocoa and Chocolate is a prioritized sector, and it has the next incentives: Income Tax exemption during 5 years starting when income is generated:New investments in Prioritized Sectors and Imports Substitutions (both total 18 sectors) Who can apply?- New Companies (incorporated after issuance of COPCI – December 29 of 2010) – New investments developed outside urban areas of Quito and Guayaquil- Investments in Prioritized sectors, or Imports substitutions Other incentivesExemption of Currency Outflow Tax in case of loan payments (principal & interests) given to financial institutions located abroad.
The loan period shall be over 1 year, the interest rate shall be lower than the referential active interest rate given by the Central Bank of Ecuador in the date of the loan registration. Does not apply for loan given by related parties or financial institutions located in tax heavens. Total or partial reduction of tariffs on import of capital goods, classified as goods not produced locally /or whose technical standards are not generated in the country (Resolution 082, COMEX).

 

Customs facilities

Single Window for Foreign Trade (VUE) :

  • Simplifies procedures , time and costs
  • electronic documentation

Ease of tax payments

  • Paying taxes to imports of capital goods (most cost USD 10,000) to 24 months with competitive interest rates

Customs interconnected -ECUAPASS

  •  Custom less time in the region
  • Electronic procedures

World Exports of Cocoa And Chocolate industry

Exports in 2014 were $ 49.007million, giving an annual average growth of 6,77% in the period 2010 to 2014.

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Ecuadorian Exports in the Cocoa and Chocolate industry

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Ecuadorian Imports in the Cocoa and Chocolate industry

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In 2014 the sector of agriculture, forestry, hunting and fishing represents a 7.3% of GDP. The total investment in these sectors was $ 94 million 2010 to 2014.

Mango was the main non-traditional fruit produced in 2014, reaching 170 thousand tons.

The following Ecuadorian non-traditional fruits include:

  • Mangos
  • Passion fruit
  • Oranges
  • Tree tomatoes
  • Pineapples
  • Papayas
  • Pitahayas

Competitive advantages

Business environment:

  • Expanding economy, monetary stability and investor protection and incentives.
  • Variety of soil types and climate megadiverse (+81 microclimates suitable for all types of agriculture)
  • Excellent infrastructure: roads, port logistics premier. Good roads between production areas, urban and port facilities, 20 airports nationwide.
  • Strategically located in Latin America, becoming a logistics hub for the geographical conditions and higher crop yields.
  • Extensive experience as agribusiness country with qualified human talent and competitive wage levels.
  • Widespread availability of land for different types of crops and ease foreigners to buy land directly.
  • Investment incentives through the Organic Code of Production (Copci).

Production costs in the sector

The costs of operating in Ecuador are 1% less than the average annual cost of competing countries.

Incentives for sector

Fresh food is a prioritized sector, and it has the next incentives: Income Tax exemption during 5 years starting when income is generated:New investments in Prioritized Sectors and Imports Substitutions (both total 18 sectors) Who can apply?- New Companies (incorporated after issuance of COPCI – December 29 of 2010) – New investments developed outside urban areas of Quito and Guayaquil- Investments in Prioritized sectors, or Imports substitutions Other incentivesExemption of Currency Outflow Tax in case of loan payments (principal & interests) given to financial institutions located abroad.
The loan period shall be over 1 year, the interest rate shall be lower than the referential active interest rate given by the Central Bank of Ecuador in the date of the loan registration. Does not apply for loan given by related parties or financial institutions located in tax heavens. Total or partial reduction of tariffs on import of capital goods, classified as goods not produced locally /or whose technical standards are not generated in the country (Resolution 082, COMEX).

Customs facilities

Single Window for Foreign Trade (VUE):

  • Simplifies procedures, time and costs
  • Electronic documentation

Ease of tax payments

  • Paying taxes to imports of capital goods (most cost USD 10,000) to 24 months with competitive interest rates

Customs interconnected -ECUAPASS

  • Custom less time in the region
  • Electronic procedures

Exports of non-traditional fruit sector in the world 

Exports in 2014 were $ 13.651 million, giving an annual average growth of 12% in the period 2010 to 2014.

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fruits_2

Ecuadorian Exports of non traditional fruits industry

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fruits_4

Exports destinations

fruits_5

Ecuadorian Imports of non traditional fruits industry

fruits_6

fruits_7

Palm derivatives generate around USD 900 M in revenues contributing USD 600 M to the trade balance. With an investment of USD 200 M could generate around 2,500 direct jobs distributed in about 13 industrial plants.

Current situation

Ecuador currently produces 2,500 tons of palm, being one of the seven major exporters globally, but during 2010 to 2013 the country introduced a market downturn of 4% due to the fall in the sector’s productivity. The industry has about 40 oil mills, which are divided into smaller 25 %, medium 65 % and larger 8% while the intermediate and large elaborate processing is concentrated in 4 companies. Most local production is exported because the local market is saturated. Importantly, the industry is expected to grow at an annual rate of 7 % thus reaching USD 650 M increase in 2025.

With an investment of USD 400 million would be achieved by consolidating about 4 industrial plants in the field of balanced food, thus providing 1,500 direct work spaces. Revenues in this sector would be about USD 200 M, contributing USD 50 M to the Ecuadorian trade balance.

Current situation

Domestic production of balanced food use by 70-90 % for the production of animal protein. The country currently has 386 processing companies balanced 87 % of corn available. By 2025, it is estimated that agribusiness corn and balanced food reach USD 736 M and reach a growth rate of 7.1 % annually. Although local industry has managed to replace a large part of imports, reaches not produce the total consumption due to low competitiveness on the productivity of plantations. We need to increase this to get to supply the total consumption and even export potential.

Processed coffee would generate around USD 1,800 M in revenues in 2025. The investment required in this area is around USD 700 M and bring about 7,500 direct work spaces.

Current situation

The country currently produces 300,000 bags annually. Ecuador with higher productivity can clearly compete in the market for Robusta coffee even replacing around USD 100 million imports by local industry. By 2025, the Ecuador could double its production of coffee produced reaching around USD 251 M.

By 2025 , the wooden boards generate around USD 2,300 M in revenues and contributing around USD 650 M to the trade balance of Ecuador . Importantly, the investment required is USD 700 M thus causing 8,500 direct work spaces .

The derivatives of the fisheries and aquaculture generate around USD 400 million in revenue thus providing USD 400 million increase in the trade balance. Investment in this sector is the lowest requiring about USD 50 M and contribute with about 100 direct work places.

By 2025 , industry revenues would present flowers around USD 700 M USD 40 M thus contributing USD 40 M to the country’s trade balance . An investment of USD 300 million for the consolidation of around 12 industrial plants that generate about 2,000 direct jobs would be required.

The dairy industry would increase its number of plants to about 40 in 2025, generating 6,000 jobs. The revenues would reach around USD 1,200 million and represent an increase of USD 150 M to the trade balance.

Current situation

The dairy market in the country is not due to having the same distribution in other countries, so being that 20% is used for consumption, 15% for the informal industry and 65% for formal industry. It currently produces 2.5 M of dairy and derivatives a day, divided into 68.2 % in milk and cheese and the remaining in yogurt, milk powder and other products. This market is self-sufficient as local production caters to the total consumption but the sector’s competitiveness remains low compared to the region. By 2025, it is estimated that agribusiness production reaches USD 240 M increasing it by 92% and reaching 5.6 % growth a year.