Foreign sales in the first four months of the year totaled $467 million, below the $543 million generated from sales abroad in the same period in 2013.
The cost of electricity, changes in the exchange rate, the price of raw materials and competition from informal firms are part of the factors that explain part of the drop in foreign sales in this industry.
Companies should be encouraged to be politically incorrect in order to take control of their prices, expressing and practicing concepts which are difficult to express.
By Ariel Baños
President and founder of FIJACIONDEPRECIOS.COM
"Out of the closet": what no one dares to confess about prices
Companies should be encouraged to be politically incorrect in order to take control of their prices.
In Central America the cost of ground transportation is twice that compared to Africa and four times that of most competitive economies.
From a statement issued by the World Bank:
Central America/WB: High costs of land freight transport, an obstacle to competitiveness
Costs are twice those in Africa and four times more than in OECD
SAN JOSE, March 6, 2014 - A new regional World Bank study shows that the lack of competition in the sector of road freight transport in Central America raises the cost of moving goods to being double that of those in Africa and up to four times higher than in more developed economies.
Increased production costs and increased international competition have forced 71% of producers to turn to other crops.
The reasons for this, explained Monica Segnini, president of the Chamber of Exporters of Costa Rica (Cadexco ) are first "the exchange rate and the appreciation of the colon over the last three years, added to which is the increase in production costs".
The price paid by Costa Rican industry for electricity consumption is 41% higher than in the European Union and 259% higher than in the U.S.
Industry has expressed its anger against the rising cost of electricity as it is making production more expensive and exports are becoming less competitive against rival markets where energy is cheaper.
The industrial sector in Costa Rica, a key factor in the creation of wealth outside the metropolitan area in the country, is asking for presidential candidates to focus on the issues that define the competitiveness of the national economy.
The main issues affecting the competitiveness of the real productive sectors of Costa Rica are:
- Very high electricity rates, because of "abuses and inefficiencies of utility operators."
Industrialists are starting to look at transferring their plants to countries where energy costs are lower.
The high cost of electricity bills has caused some industries to look at moving their operations out of the country in the search for savings and competitiveness.
Corporación Yanber, a manufacturer of packaging for trade, industry and agriculture, decided to go to Nicaragua eight months ago, and other companies are evaluating the possibility of moving their operations to countries where the energy sector impinges less on the cost of their products.
Overwhelmed by the growing impact of energy costs, large electricity consumers in Costa Rica are asking for a reduction in their electricity rates of between 10.7% and 38.6%.
From a press release by the Regulatory Authority for Public Services (Aresep):
The Costa Rican Association of Large Energy Consumers (ACOGRACE) has requested a rebate for electricity rates in the business sector.
Political uncertainty, bureaucracy, corruption, poor access to credit and high energy costs are the factors which are adversely affecting investment decisions.
From a press release issued by the Costa Rican Union of Chambers and Associations of Private Enterprises (Uccaep):
Political uncertainty, excessive red tape, corruption, access to credit and the cost of electricity are the factors that influence 51% of those surveyed who feel that the current business climate is not favorable for investment in the country. These factors are reflected in the latest results of the Business Pulse survey by UCCAEP performed every three months.
The industrial sector is willing to import the LNG needed without state intermediaries in order to reduce production costs.
"On 11 June, the Administrative Court accepted a law which is forcing the Ministry of Environment and Energy (Minae) to decide, within fifteen working days, on the possibility of the private sector importing liquefied natural gas (LNG)," reported Elfinancierocr.com.
Seven strategies that, applying Darwinian maxims, Guatemalan businesses are implementing in order to overcome these times of crisis.
An article by Louisa Reynolds in Elperiodico.com.gt details different strategies that Guatemalan entrepreneurs are carrying out in trying to be more creative in order to take advantage of any new opportunities that may arise.
Beverage Industry Digital Magazine established in 1942, the oldest Spanish trade journal and the only beverage trade magazine serving the Latin American beverage market. It serves soft drink bottlers, brewers, bottled water...