The current global food chain situation, the agri-food sector, and supply chains were the focus of analysis during the Agri-food Cycle and Supply Chains panel discussion held on the second day of the V CEAPI Congress, which took place on June 1 and 2 in Punta Cana (Dominican Republic).
The panel discussion was led by the distinguished Spanish agribusinessmen Manuel López Donaire, president of Delaviuda Confectionery Group; Enrique Tomás, president of Enrique Tomás and Benito Jiménez, president of Congelados Navarra. The speakers addressed the challenges and opportunities that Latin America faces as a global food power within a context of sustained demographic growth and, consequently, a gradual increase in the world demand for food.
Thus, although the speakers recognized innovation, social responsibility, and environmental sustainability as the main challenges in terms of competitiveness of the Ibero-American food industry, they also agreed on the region’s potential to become the “world’s pantry” in just a few decades.
Moderated by Patricia Santoni, CEO of the Spanish company Cegid Meta4, the panel members highlighted the region’s leading food sector opportunities, including the fact that it has 12% of the world’s farmable land and is already responsible for 14% of the world’s food production.
The participants first spoke about their companies’ keys to success. Benito Jiménez, president of Congelados Navarra, emphasized that their objective has always been “not to offer the best prices but the best product.” Manuel López Donaire pointed out that “crises are really opportunities. In 2008 we internationalized, and in 2020 we decided to diversify. And we did both things while maintaining family unity and a passion for the business. The years of uncertainty must be used for inorganic growth and the years of prosperity for organic growth.” Along the same lines, Enrique Tomás did not hesitate to recognize that these are “times of uncertainty” which simultaneously “open up great options. Opportunities arise from difficulties such as COVID, and they give us a boost.”
The three then spoke about innovation and investment in new markets. Innovation is key to “making healthy, sustainable and easy-to-consume products. We must innovate by observing what society demands” (Benito Jiménez). For Manuel López, “investing more in innovation at the end of the value chain is essential. Throughout the entire chain, but above all at the end, because otherwise suppliers and customers will make a sandwich out of you. We first invest in technology focused on improving raw materials, where Latin America has a treasure chest, and then in our brands to follow consumer trends in each channel and country. In the center of the value chain, we have to make alliances, for example, with strategic alliances in Latin America that include processing industries and the primary sector”.
Enrique Tomás considers that the most significant investment he has made regarding innovation “has been going back to the basics, recovering the essence of what a ham is. And above all, adapting to consumer preferences demands specific and basic products. Innovation means listening to the customer and making life easy for them.”
Regarding offshoring, Benito Jiménez pointed out that “going international is not easy. When we do it, we have a clear idea. We invest abroad not to take all the profits but to contribute to developing the countries in which we invest.” Manuel López pointed out that “digitalization and big data help globalization because they allow you to know customer tendencies in each country.”
The three agreed that Latin America is not only an opportunity as a market but also a source of raw materials, from almonds for Manuel López to water reserves for Benito Jiménez. Enrique Tomás stressed the need for “a partnership among one another and for us to be able to create another community and for Ibero-Americans to prioritize one another.”
Businesspeople and experts highlight the new Ibero-American free trade zone model as a critical value proposition for the region.
The Minister of Industry, Trade, and Mipymes of the Dominican Republic, Ito Bisonó, was also present on the second day of the V edition of the CEAPI Congress, highlighting the fundamental role played by the country in the new Ibero-American economy. He emphasized its vital role in the industrial field: “Our country is no longer just a tourist destination, but has managed to become an industrial hub for important multinationals which have been operating for years under the free trade zone regime.”
Focusing his speech on the opportunities presented by a context of generalized uncertainty for the region as a whole, Bisonó underlined the role of industry and its latest trends in positioning the Dominican Republic and Ibero-America as a spearhead in the global supply chain. “We are facing a global situation that poses an unprecedented opportunity for our countries and the free trade zone regime in the entire Ibero-American region. Therefore, this is the best time to promote greater cooperation and integration at the regional level, to boost exports and intra-regional trade and attract new investments,” said the minister.
“The global megatrends accelerated by the Covid-19 crisis -such as the trade dispute between the US and China, Brexit, and the integration of ICT in production processes- have caused many companies to accelerate or review and rethink their business strategies to adopt reshoring or nearshoring. They seek to be more resilient, position themselves closer to the end consumer market, reduce costs, and mitigate risks associated with tariff increases and logistical delays in their supply chains,” said Bisonó, adding that this process “could become a great opportunity both for those companies that are regionalizing to shorten their production networks, as well as for the Latin American countries. By making the most of their comparative advantages in certain productive sectors, as well as their competitive advantages, including geographical proximity to the United States, labor availability, and a regime of incentives to promote free trade zones, they would be able to attract those companies that are moving production from China and other Asian countries to relocate them to closer locations.”
Along these lines, the minister went on to point out that this panorama “is synonymous with opportunity for Ibero-America, which must support nearshoring to attract investments, generate new regional chains, and increase its participation in global value chains, especially in those identified as critical for the United States.” Therefore, concluded Bisonó, “we must build a new value proposition in the region based on the free trade zone model, identifying and promoting those policies and reforms in the short, medium, and long term that will allow us to increase our attractiveness.”
Free trade zones: relocation and nearshoring
Factors such as the Covid-19 pandemic, the context of the trade war between the United States and China, and, more recently, the Russian invasion of Ukraine have led to the emergence of important relocation and nearshoring processes throughout the Ibero-American region.
This issue, which has a direct impact on the region’s industrial structure, was the topic of discussion during the Free zones: relocation and nearshoring panel discussion, which, as part of the 5th edition of the CEAPI Congress, was made up by Javier Cardenas, president of Rhino Equipment; Jaime Miller, advisor to the board of Zonamerica; Luis Manuel Pellerano, commercial director of Zona Franca Las Americas and Gema Sacristán, CEO of BID Invest.
During the panel, the speakers analyzed the comparative advantages that Ibero-America offers due to its geographical location in the context of the emerging economy. Gema Sacristán pointed out the vital process of “investments, infrastructure developments, and integration that the industrial sector is undergoing, especially in Latin America.” However,” added Gema, “we still have to work to improve access to physical infrastructure, which in Latin America has a deficit of 7%, as well as to generate a business climate and provide flexibility to the investor“.
Luis Manuel Pellerano pointed out the need to “nourish ourselves among all countries, have free trade agreements, exchange raw materials and optimize the procedures in each country. We have to define how we position ourselves as a region and understand that together, cooperatively, we have more possibilities of achieving the economic growth we seek.”
Regarding the industrial development of Ibero-America based on the free trade zone system, Javier Cárdenas pointed out legal security “as one of the main challenges faced to take advantage of the emerging nearshoring process in Ibero-America.” “We have a great opportunity in our free zones, but political instability and legal security stand as significant factors and, in this sense, governments must generate secure laws to attract and retain investment”.
Finally, Jaime Miller reiterated the importance of legal certainty for attracting investors and detailed the three key aspects that will mark the success of free zones and reduce operational and operational risks: “shared infrastructure, the consolidation of a business ecosystem that favors investments, and the promotion of operational connectivity.”
