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Spanish Trade With Puerto Rico On The Rise Despite Economic Woes
Thirty percent of all imports are food & beverages; chemicals dominate exports
By MARIALBA MARTINEZ
October 23, 2003
Spanish imports accounted for 0.5% while exports reached 0.2% of all Puerto Rican products traded during fiscal year (FY) 2002, trends which Spains Official Chamber of Commerce (SOCC) in Puerto Rico intends to increase by encouraging local Spanish businesses interaction with local industry and their expansion to the U.S. mainland.
According to statistics provided by the SOCC, sales to Puerto Rico are concentrated on five sectors that together make up more than half of all imports from Spain. They are food & beverages, which make up about 30% of all imports; ceramic products used in construction; fuels; editorial; and footwear.
Most people are familiar with the reputation of Spanish food & wine products, including vegetable cooking & dressing oils, wine, and vegetable preserves. Other well-known products include ornamental & ceramic tiles, books & magazines, and furniture.
Exports from Puerto Rico to Spain are concentrated on pharmaceutical products; organic chemicals; electrical/electronic machines, equipment, and materials; and optical & medical devices. Almost a third of all exports are related to the islands chemical/pharmaceutical industry.
Improving the trade imbalance
"Spanish imports surpass exports, and we believe the trade balance can be improved," said Jose Luis Rivera, president of the SOCC in Puerto Rico during a roundtable with Spanish industry representatives that import products to the island. "We believe our government would be more than willing to encourage trade, since this would lead to better relations between our countries."
According to Spains former Trade Office director, Enrique Fontana Llopis, "The main products that were exported to Spain during 2002 were organic chemicals. Sales reached $16 million, an almost 450% increase compared with fiscal year 2001. This also includes chemical products, pharmaceuticals, and medical devices."
One notable change has been the islands purchase of nonbranded products from foreign countries instead of from the U.S. mainland. While most Spanish exports are shipped to Puerto Rico directly, without having to stop at U.S. mainland ports, Puerto Rico exports to Spain still go through stateside ports. This means that statistics for trade between Spain and Puerto Rico could be five to 10 times higher than the numbers listed.
Spain is doorway to Europe
During a recent presentation to the SOCC in Puerto Rico, Economic Development & Commerce Secretary Milton Segarra emphasized the role of Spanish companies doing business on the island, such as Mapfre, Banco Bilbao Vizcaya Argentaria (BBVA), Banco Santander, Iberia, clothing store Zara, and tobacco producer Altadis; Necso; and Inditex.
"I have to emphasize that these are only some of Spains commercial and manufacturing operations in Puerto Rico," said Segarra. "In total, direct investment by Spanish companies on the island is more than $1.5 billion, and trade between Puerto Rico and Spain ranges between $180 million and $200 million. As you can see, the alliance between Puerto Rico and the Spanish business sector is clearly productive, and we want to continue strengthening it. For the island, Spain is definitely the doorway to Europe."
Opportunities in Puerto Rico: Tourism, telecom & more
Representing the hotel & tourism industry in Puerto Rico, Caribe Hilton General Manager Jose Campo and Jaime Arbelaez, senior corporate sales manager at the Wyndham El San Juan Hotel & Casino, agreed that Puerto Rico is a high-quality market that is particularly attractive to business groups. According to Arbelaez, the industry is focusing on touting to Spanish tourists the attractiveness of Puerto Ricos golf courses as well as the islands ecotourism offerings, restaurants, and security & stability.
Banco Popular Assistant Vice President Lydia Casablanca sees a great opportunity for the islands banking community, since 52% dont have bank accounts. Victoria Medina and Sonia Rosario from telecommunications company TLD de Puerto Rico said the island is an attractive market for the company, which has invested $160 million to provide a full range of services.
"Telecommunication to Spain from Puerto Rico makes up 4.5% of TLDs total traffic between Puerto Rico and the rest of the world, which represents 6% of the companys revenue," said TLD General Manager Medina. "The domestic traffic [U.S. calls] represents about 83%." F. Pont Flores Corp. President Victor Alvarez, whose company imports Maja, without a doubt one of the islands most recognized cosmetics brands, recently relaunched the brand with a new packaging design. "Majas face powder is the best-selling cosmetics product in Puerto Rico," said Alvarez. "In 2002, approximately 400,000 face powders were sold, and we expect to increase our market share by 10% with the brands repositioning."
Representing the insurance sector, Mapfre President Antonio Huertas said the local market is difficult to penetrate because of competition. Mapfres insurance premiums run to about $11 billion, making the agency the second in miscellaneous groups and first in life insurance.
Another sector that is gaining more participation from Spain is construction and engineering. In May, a group of engineers and contractors that belong to the Spanish Association of Engineering, Consulting & Technology Services Companies (Tecniberia / Asince by its Spanish acronym) visited Puerto Rico to learn more about the island and develop contacts for public works projects.
Tecniberia / Asince President Arcadio Gutierrez Zapico and Export Commission Director Jose Luis Garcia Galilea headed the group. A meeting was organized with Spains Commercial Office in Puerto Rico where current public works projects were discussed, including the Port of the Americas and the Puerto Rico Convention Center. Enrique Fontana, Puerto Rico Trade Office Representative in Spain, mentioned that several companies are interested in developing tourism and manufacturing projects on the island.
"Companies such as Fluor Daniel that have several important contracting projects in Puerto Rico could look for other projects in Spain and Europe through Puerto Ricos Trade Office in Spain," said Rivera. "This kind of fusion of services could give Puerto Rico a large participation in the development of trade between the U.S. and Spain."
This Caribbean Business article appears courtesy of Casiano Communications.