Bolivian companies seek to grow in Paraguay

RIO DE JANEIRO, BRAZIL – Aware of its inhospitable landscapes, the writer Augusto Roa Bastos described his native Paraguay as “an island surrounded by land” due to its isolation throughout its history.

Today, this peculiar “island,” once rural and far from development, is building bridges and opening roads to foreign investment.

The equation is simple; it seeks to move forward and consolidate itself as the economic center of South America. And this is not a cliché.

Its regulations allow business people from all over the world to access facilities that they do not even find in their countries of origin.

Official data place Spanish and North American capitals as the leading investors in Guarani soil.

But the island “surrounded by land” opens up to the world and invites Bolivian companies to bet on a country of opportunities.

Sergio Gustavo Barrón Salinas, a Bolivian construction businessman, heard this call. His goal is to build a building in Paraguay. His objective is clear: to build affordable apartments. He sees good business opportunities, and he is not the only one.

Between May 24 and 28, 22 companies, including companies with operations in Bolivia, participated in a mission that sought to open business opportunities in Paraguay.

Salinas was part of the expedition organized by the Bolivian-Paraguayan Binational Chamber, which showed the delegation of entrepreneurs from various sectors such as construction, food and beverages, technology, pharmaceuticals, insurance, livestock minerals, and the paper industry, the opportunities offered by Paraguay.

The entrepreneurs met with Paraguayan authorities and business organizations. The common goal is to make Bolivian investments grow in the neighboring country, which is considered the gateway to a market of more than 200 million people, such as Mercosur, and a platform to reach any part of the world.

Added to this is the tax pressure, which does not exceed 30%. For example, the Corporate Income Tax reaches a maximum of 10%, while the Personal Income Tax and the Value Added Tax (VAT) have a similar percentage.

It should be clarified that the rates are maximum referential rates so that the tax burden may be lower. To this is added the cost of energy, which is the cheapest in the region; because it reaches US$0.049 kilowatt-hour (KwH).

In addition, there are special regimes such as the maquila, whose objective is industrial development, job creation, and increased exports.

DREAMS IN GUARANI LANDS

César Muñoz precisely cuts the peels of an orange and a mango. He places them in two glasses where he previously put ice and the precise measure of gin; then, he adds Premium tonic water and mixes those ingredients. The result is a drink that captivates the connoisseurs of a good liqueur.

Despite his ability to prepare this drink, Muñoz is not a bartender but a partner of the Cuatro Ases distillery, whose product, Dharma, seeks to conquer the Bolivian and Paraguayan premium market.

The gin brand has only been on the market for a few months but has received excellent acceptance. It is distributed in the main cities of Bolivia but aspires for more.

Muñoz arrived in Paraguay to find a distributor and export the product in the medium term. He hopes to have a distillery in that nation.

Paraguay not only attracts entrepreneurs like César Muñoz. Copelme, Bolivia’s largest paper company, which has more than 50% of the domestic paper market, is looking for opportunities in Paraguay.

Max Abecia, Copelme’s production manager, said that he had held meetings with four companies to enter its diverse product portfolio. The executive explains that the initial idea is to export and have its own production line in that territory in the future.

The strategy is based on its 25 years of success in the Bolivian market through its star product: Nacional toilet paper.

Fernando Saavedra, Copelme’s commercial manager, says that the Paraguayan market offers a good investment climate.

“It is a window to international markets; first, we have to get to Paraguay; we have established good relations,” Saavedra said.

In the technology area, there are many things to do. And this is an important niche for Daniel Maldonado Roca, integration and development manager of the company Insertec, which has been in Bolivia for 40 years.

The company develops software for the digitalization and automation of industrial processes. During the mission, Roca managed to contact companies that did not want to be left behind in the digital revolution.

“We have developed technology under open-source software. That allowed us to have technology according to our reality. We saw the opportunity to transfer this knowledge, and the Paraguayan people are open to paying for this,” he said.

The businessman emphasizes that, unlike similar events, the Paraguayan government is willing to receive and give conditions to companies that come to invest. And it will not be the last time he visits that country. He says he has found opportunities that he does not intend to miss.

The same thinks Roberto Pablo Landívar, general manager of the company Gran Alimento. Given the situation in the country, he says that going to Paraguay means looking for new opportunities for the Bolivian business sector, which requires stability and legal security.

“It is a young market, where we can take our know-how of the things we do in Bolivia and replicate them in Paraguay. There are advantages for all sectors, openness for foreign investors, and facilities to open your company. There are not very high taxes; the opportunities are there,” he said.

Landívar sees that these factors make it possible to invest very easily “because there is an openness of the State to attract foreign currency to the country and generate growth”.

Gran Alimento is a company that produces animal food with a technological process called extrusion, a European technology that makes the feed assimilable and the nutritional conversion more efficient. The food industry has been operating successfully for ten years in Bolivia.

EVERYTHING TO BE BUILT

Although Asunción stands as a modern city, there are many things to be done in terms of construction, not only in the capital of this country but throughout its geography.

One of the main problems is housing. According to data from the Paraguayan Chamber of the Construction Industry (Capaco), there is a deficit of more than 300,000 housing units and 1.5 million to be refurbished.

Raúl López Palacios, a member of Capaco’s board of directors, explained that his country has an important macroeconomic strength and a competitive labor cost, key elements to invest in this sector.

In addition to this factor, there is a strong need for infrastructure, which allows construction companies to compete for public works.

He explained that Paraguay’s infrastructure investment budget is around US$1.5 billion per year.

“We have a 90% deficit in basic sanitation throughout the country. Drinking water is a challenge because 30% still do not have access to the resource,” Palacios said.

For the Paraguayan businessman, these are pending issues, and he maintains that business people from abroad can bring the know-how and expertise to solve them.

Carlos Moreno is a real estate developer who has been operating in Paraguay for a year. He is a partner of the company Morey SA, which has two projects in the Paraguayan cities of Villa Eliza and Fernando de la Mora.

The two projects seek to alleviate the Paraguayan housing deficit with apartments that have a value of US$50,000 and US$90,000.

“We are talking about an income per person of about US$700. 53% of the population has an income of US$300 and US$1,500 individually. If we talk about the family that doubles, then the purchasing power improves and improves the type of housing,” said the businessman.

In the opinion of Jorge Eguivar, general manager of the Bolivian-Paraguayan Binational Chamber, it is evident that “all (the companies) have the vision of being able to incorporate and start operating in Paraguay,” which opens the doors to investment.

With information from El Deber