The Minister of Industry, Trade and Tourism of the Government of Spain, Reyes Maroto, and the Chilean Minister of Agriculture, Antonio Walker, closed the II Meeting of the Chile-Spain Business Council, in which the opportunities, challenges and challenges in the agri-food sector, in the logistics chain and in distribution in both markets. In the opening session, the co-chairs of said Board took part, that is, the vice president of CEOE and president of CEPYME, Gerardo Cuerva, on the Spanish side; and the elective councilor of SOFOFA and director of the National Society of Agriculture, Andrés Montero, on the Chilean side.
The meeting, aimed at Chilean and Spanish businessmen with interests fundamentally in the agri-food sector, logistics and distribution in both countries (and in collaboration with third parties), aimed to present the policies and support tools implemented from the respective governments to face the pandemic, as well as analyze the main challenges and opportunities in terms of sustainability, digitization, internationalization and global value chains. To address these issues in depth, the president of the Agrarian Association of Young Farmers (ASAJA), Pedro Barato; the economist and counselor of the National Society of Agriculture, Jorge Quiroz; the general director of the Spanish Federation of Food and Beverage Industries (FIAB), Mauricio García de Quevedo; and the General Manager of Happag Lloyd Chile, Christian Seydewitz. On the other hand, the general manager of Bodegas Torres (Spanish company), Miguel Torres, and the general manager of Hortifruit, S.A. (Chilean company), Juan Ignacio Allende, spoke about the experience of their companies in both markets.
The Spanish president of the Chile-Spain Business Council, vice president of CEOE and president of CEPYME, Gerardo Cuerva, recalled that since its reactivation act last June, the Council has not stopped working to represent business interests, expanding and deepening the economic and commercial relations between the two countries. Cuerva stressed that the pandemic has highlighted the importance of the agri-food sector, logistics and distribution and vindicated the need for the Administrations to defend agro-industrial companies. In fact, he continued, at the Business Summit “Spanish Companies Leading the Future”, held in June, the experts bet on promoting public-private collaboration in this sector, addressing issues such as the creation in the field of a public-private consortium that promote and export Spanish products. The CEOE vice president also assured that it is essential that digitization reaches the agricultural world effectively and insisted on the need to promote tax breaks in the agri-food sector, as well as help lines to return to activity. In short, he stressed, special attention should be paid to the rural world and the food and beverage sector, since they are priority sectors, not only for their work as an essential service during these months, but for their weight in GDP, in the creation of of employment, in exports and in SMEs. In his speech, Cuerva took the opportunity to convey a message from the Spanish ambassador to Chile, Enrique Ojeda, to show all his support for the Business Council, the development of relations between the two countries and his willingness to increase opportunities in key sectors, especially in the agri-food, logistics and distribution sectors.
The president on the Chilean side, elective counselor of SOFOFA and director of the National Society of Agriculture, Andrés Montero, assured during the opening that Spain and Chile have privileged climates for agribusiness and the production of quality food, as well as an infrastructure adequate to develop efficient logistics. "Different hemispheres allow us to complement a wide offer to satisfy demanding markets," he said. Montero explained that Chilean wine and fruit have gained a relevant space in developed markets and stressed that "we have a lot to share, we have many projects to carry out and together we would do better." Montero opted to increase investment in agribusiness, in complementary logistics and in irrigation works, so necessary to increase production; and work together in the search for innovative solutions to common problems, to ensure the production of products of the highest quality in a world that increasingly demands healthy and safe food. "The future is ours, it depends on us," he said.
The Chilean ambassador to Spain, Roberto Ampuero, for his part, highlighted the excellent commercial relations between the two countries, driven by a common culture and language, by international cooperation and market freedom. He also stressed that the private sector will play an irreplaceable role in the post-pandemic phase and when it comes to regaining confidence in global value chains. "Spanish entrepreneurs will always find the doors open to explore new opportunities in the Andean country," he said.
Organization and complementarity of the agri-food sector and the logistics and distribution system in Chile and Spain
The president of the Agrarian Association of Young Farmers (ASAJA), Pedro Barato, reported that in Spain there are approximately 3,000 agricultural cooperatives and more than 30,000 agri-food companies and the value of this sector amounts to more than 52.00 billion euros. Because of the pandemic, Barato reported, there is a complicated situation regarding the profitability of exports and sectors such as wine or oil have been particularly affected. In his opinion, the value chain in the agri-food sector should be more equitable, distributing the benefits equally between the producer, the one who transforms the product and the one who markets it, so, in his opinion, in a global world the rules of the game must be clearer and fairer. With regard to bilateral relations, Chile and Spain complement each other perfectly, he said, and "we should take advantage of the existing network of agreements to access third markets, such as the Pacific, to reach the Asian continent", he considered.
The economist and advisor of the National Society of Agriculture, Jorge Quiroz, highlighted some of the competitive advantages of the Chilean economy, such as the Mediterranean climate, phytosanitary heritage, prestige as an exporting country and trade agreements; the proper functioning of land and water products and markets; 100% coverage of drinking water, low country risk or the growing adoption of clean energy. "Chilean and Spanish products and services can be complemented, thanks to innovation and improvement in production techniques."
The general director of the Spanish Federation of Food and Beverage Industries (FIAB), Mauricio García de Quevedo, stressed that this area is the first industrial sector in the country, since it reaches 120 billion in turnover, represents between 18 and 20% from the manufacturing industry and 15% from the industrial sector. In addition, he stressed, it generates half a million direct jobs and 2.5 million induced jobs with sustained growth in the last 8 years. "Our relationship with Chile is very good, we are partners and friends, and we should deepen the complementarity of products and markets," he considered. The Covid, he added, has accelerated the processes of digitization and ecommerce, eliminating purely online consumers and increasing mixed shoppers. In addition, it reported that agreements are being signed with last-mile platforms, delivery and with new logistics platforms. "We are a safe, healthy sustainable talented and reliable industry," he emphasized.
The general manager of Happag Lloyd Chile, Christian Seydewitz, spoke of the logistics and distribution system, and highlighted that the transport from Chile to Spain is mainly carried out in containers. "Chilean container exports from southern Europe represent 3.6% of the total, and 1.4% of this 3.6% corresponds to Spain," he reported. On the other hand, he stressed that transit times play an important role in distribution, since the shorter the transit, the better the fruit will arrive. In this sense, Seydewitz explained that transit times to Spain are around 30 days, with the fastest port being Algeciras, with a 23-day transit option. In his opinion, Chile's logistics capacity is also improving more and more.
The general director of Bodegas Torres (a Spanish company), Miguel Torres, assured that Chile is a paradise for viticulture, with extraordinary quality for agricultural products. In addition, he said, from the first day they settled in the Andean country, the company received a lot of help and facilities. "Governments have understood that growth is the key to progress, and this has given companies great security," he stated. From Spain, he explained, new technologies for winemaking were brought, and Chile demonstrated its great ability to adapt to all innovative techniques. Torres also reported that the greatest challenge of all is climate change, even in times of Covid, since the increase in temperatures draws a very different world. "It is key to drastically reduce the carbon footprint in all sectors and carry out the decarbonization of the economy," he stressed. In this sense, he assured that Bodegas Torres have reduced their carbon footprint by 30% and in 2050 they aspire to be carbon neutral.
The general manager of the Chilean company Hortifruit S.A., Juan Ignacio Allende, reported that the company produces in 8 countries and its sales in the 2019-2020 season amounted to 568 million dollars, largely thanks to agricultural sales. Innovation and genetics allowed to produce in areas closer to the equator, and according to Allende, currently it can be produced every day of the year in different areas. The company, he explained, has 4 subsidiaries in Spain, which represents a hub for operational management and management in Europe, with an investment of more than 18 million. In addition, he assured that Madrid has become a strategic city for doing business, to which is added the high technical level of the country and the validity of its human resources.
Support policies from governments
The Minister of Industry, Commerce and Tourism of Spain, Reyes Maroto, focused on the existing support plans and measures for the agri-food, logistics and distribution sectors, since they are all strategic, not only for our economy, but also for the Spain brand. This area has been, according to the Minister, an example of solidarity, guaranteeing the tranquility of consumers, supplying the population and satisfying the most urgent needs of the country. The agri-food industry, he stressed, has not only been able to maintain the volume of its exports during the pandemic, but they have even increased, as in the case of the fruit and vegetable sector.
Maroto assured that one of the biggest challenges the sector had to face was internationalization, even though it has very solid foundations. In fact, the sector's exports exceeded 50,000 million euros in 2019, thus maintaining sustained growth for 20 consecutive years. In this sense, he added that 6 out of 10 companies export regularly and mentioned some of the main support instruments so that companies can continue to expand. In the Action Plan for the Internationalization of the Spanish Economy 2021-22, the Minister explained, three priority axes are contemplated: preserving the productive fabric, with special attention to SMEs, mitigating the impact of the crisis on the foreign sector and promoting an image of Spain associated with competitiveness and excellence; ensure that the foreign sector is configured as a pillar of growth and employment, favoring the diversification of exports and the establishment of our companies in strategic sectors and destinations; and to enhance the resilience capacity of the foreign sector when export activity returns to normal, with sufficient instruments appropriate to its needs that allow it to resist possible outbreaks or new pandemics.
On the other hand, Maroto also emphasized digitization, sustainability and market diversification, as the main challenges for our companies to increase their competitiveness abroad. In this sense, "Spain Digital 2025" is one of the measures implemented to promote the digital transformation of the country as one of the fundamental levers to relaunch economic growth, and "Spain Food Nation" is a campaign carried out by ICEX to promote the international commercialization of Spanish foods. Finally, Reyes Maroto, highlighted the great work that the Chile-Spain Business Council is doing since its reactivation.
The Chilean Minister of Agriculture, Antonio Walker, pointed out that the Andean country is a great supplier of sustainable products and healthy foods, since they focus on factors such as quality, conditions, taste, safety and traceability to satisfy the niche markets. Likewise, he insisted on the importance of having sustainable forestry production, being carbon neutral and trying to seek a social impact through the sector to improve living conditions. In addition, he stressed, "agriculture wants to be part of climate change and not the cause of it."
Walker reported that exports of the agri-food industry to Spain amount to 177 million dollars, while imports reach 126 million. The sector employs a million people directly and another million indirectly, and represents about 11% of the national GDP. In addition, he highlighted, Chile maintains 29 free trade agreements with 65 countries, which means access to 86.3% of world GDP and 64.1% of consumers. According to the Minister, the Andean country is very open to international markets, not only towards America, but also towards Asian countries, where exports reach 7.1 billion dollars, mainly to destinations such as China or Vietnam. Finally, Walker explained that the Ministry focuses on various lines of action to promote the agri-food sector, such as associativity, rural development, food security or sustainability, among other factors.