Living in Peru : your everyday companion

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DOING BUSINESS IN
(AND WITH) PERU



The taking effect of the PTPA will mean immediate tariff-free entrance of more than 95% of all tariff classifications. Because it treats not only clothing and agro-industrial goods, we have chosen some products that Peru produces that could be added to the export boom.

Within the accelerated growth of the exports of frozen shrimp to the U.S., the sale of tails with the shell-on is the most important (US$24 million in the 2005). Nevertheless, last year, peeled tails are what have had the greatest growth in exports to the U.S., increasing by 707% compared to 2004 and already surpassing US$700,000.

Although Spain is the main destination market, the U.S. receives 32% of Peru’s exports, mainly through the ports of Los Angeles, New York and Nogales (Arizona) where the eight Peruvian exporting companies compete with imports from Vietnam, Indonesia, Mexico and India. The Peruvian Shrimp Growers Association estimates that in the next five years, shrimp exports will grow to between US$60 and 70 million, which will bring greater benefits to the zones of Tumbes, where production is centered, and Paita, from where the tails are exported, respectively. Furthermore, the potential for this export is enormous if one considers that, according to the National Fisheries Institute, Americans spend around US$50 billion per year on the consumption of marine products and that, according to a study conducted by USAID, 80% of shrimp imports are tails with or without the shell.

Agro-industrial Sector: Chocolates and Chocolate Products in Blocs, Tablets or Bars, Filled

The United States purchases 26% of Peruvian chocolate exports and is the second destination market after Costa Rica. Chocolates Helena concentrates the greatest volume of its exports to the U.S. In the tariff category analyzed, emphasis is placed on chocotejas and prepared chocolate confections. These products, although still far from competing with the volumes of Canadian, German and Swiss chocolates - which are the main suppliers of the U.S. - can be directed to a special market niche of Latin consumers of nostalgia products or to gourmet markets.

In the case of Chocolates Helena, Elena Panizo says that its entry to the U.S. was facilitated by establishing a company in that country from which to distribute the tejas and chocotejas to California and New York. They have also achieved the distribution of their tejas in various American Airlines flights to cities in the U.S. and even in first-class flights on routes to European cities. Thus, Peruvian chocolates are beginning to be distinguished for their quality, and new windows of opportunity are opening for other local chocolate producers.

Chemical Sector: Beauty and Skin Care Products

This product line owes its success to the use of natural products as main ingredients. Thus, the emphasis relies in the mixture of clay and seaweed gels, whose exports to the U.S. – the main destination market - amounted US$55 million, distributed among the 11 companies that export these products. The main port of entry is the port of New York, since this city is a Mecca for the cosmetic and beauty industry. Products made with natural ingredients also are in ever-greater demand and with an ever-higher value over time. According to a study of the International Trade Center, the market for natural personal care and beauty products in the U.S. is nearly US$4 billion. In natural hair-removal products, Peru is the third supplier of the U.S., with exports that grew by 70% in 2005. While the volumes of these products are smaller than those of other beauty preparations, the possibilities of increasing and consolidating their participation in the American market are dazzling.

> continue to Part II <

tags : Peru economy business FTA PTPA USA import export shrimps chocolate beauty products

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