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The Magazine about Living Internationally
A rocky past In 1999, Ecuador underwent its worst economic crisis in history. Oil prices dropped. El Niño caused massive flooding and crop loss. Asian and Brazilian economies bottomed out, hurting trade. Banks failed, and assets were frozen. Political deadlock made effective government reforms impossible. These crisis conditions made Ecuador the land of opportunity for people looking for extremely cheap real estate: Cash-hungry Ecuadorians were parting with their property at unheard-of prices. In the year 2000, back against the wall, Ecuador implemented an economic program aimed at regaining stability. The U.S. dollar replaced the sucre, the national currency, and significant reforms were approved by congress on March 1, 2000. The road to recovery In the two years since, Ecuador has
begun to get back on its feet in a big way. The 2001 balance of trade was
+US$1.2 billion, up from + $.9 billion in 1999. The new oil pipeline from
Ecuador’s eastern oil fields to the coast will be completed in 2003, doubling
oil exports to about 800,000 barrels a day. Inflation has plummeted and
is expected to be in the single digits next year or the year after.
Choices, choices, choices The question is, what and where are the specific business opportunities? We uncovered more than we could imagine on our last Discover Ecuador tour. We started out with roses as we drove
through the majestic Cayambe Valley north of Quito. Ecuador is one of the
world’s largest exporters of roses thanks to a perfect equatorial climate
that allows a year-round growing season, and Cayambe is home to companies
that produce hundreds of millions of roses annually. A walk through a greenhouse
the size of a city block bursting at the seams with perfectly formed roses
of every color and variety can make you think you’re strolling through
heaven.
As we learned by talking to the managers of these operations, there is practically no room in the market for start-up companies. Where then is the opportunity? Competition and the sheer number of companies mean that almost everyone is seeking an advantage by expanding production. At the same time, many lack sufficient capital. The front door to the management office is open to investors who can provide the wherewithal to add more greenhouses and support infrastructure. Money for buttons When we flew to Ecuador’s warm, lush
Pacific coast, we found another “growth” opportunity—tagua. This amazing
product is often called “vegetable ivory,” since it can be finished to
resemble real ivory in hardness, beauty, and durability. Cottage industries
have grown up around sculpting these dried, cured nuts of the tagua palm
into an amazing assortment of figurines, but the money currently is in
a most unlikely place…buttons!
Shrimp tales As it happened, one of the local guides we introduced to the readers on our Discovery Tour, used to work in the Ecuadorian shrimp industry, and told us that the margins were incredible. To prove it, Diego called an acquaintance near Manta that wanted to leave the shrimp operation he was working for and start his own. That very afternoon he showed up at our hotel, and we spent a very interesting afternoon discussing the potential for investment in shrimp farms. The problem is land: Even at the relatively cheap prices of Ecuador, startups are often undercapitalized. Shrimp pools are large, and the more you have, the more you can produce, making it difficult for local entrepreneurs to round up the necessary seed money to compete with the large, established operations. But once in production, these shrimps provide a giant margin. Our visitor estimated that initial capital could be recouped in three “harvests” from a large operation…and there can be up to four harvests a year! Thinking outside the box These are only a few of the opportunities we have come across as we have traveled around this diverse little country. It seems that the longer we’re here, the more interesting ideas pop up, and some of them make us scratch our heads and wonder, “Why didn’t we think of that?” Coffins, for example. We’re not being facetious or macabre. Ecuador is full of master woodworkers, and we know of a local entrepreneur exploring the possibility of having high-quality wooden coffins constructed here for export to the United States, where they would be bought and distributed by a national funeral home supply company. His research indicates that the margins would be significant. Now that’s thinking outside the box. Along the same lines, we’ve heard
of a dealer of fine Russian art that is having reproductions of elaborate
period frames made here in Ecuador for his paintings. These frames add
significantly to the appeal of the paintings—as well as to the sale price.
We’ve written before about our friend, Matt Guillory, who started his business on the web exporting the beautiful religious statuary made in San Antonio de Ibarra. This business led to someone asking him to reproduce altar candlesticks and incense burners. Matt has now moved into the reproduction of old church fixtures in general, as well as the reproduction of silver and gold antiques of all kinds. Using digital, e-mailed photos of the originals and his contacts with local artisans, Matt is selling expert reproductions of antique candlesticks, flatware, serving sets, and other utensils at less than half the cost of production in the United States, London, and elsewhere. Another brilliant idea Another brilliant idea we’ve heard is the wedding gown business. The cost of labor and the skill level in Ecuador makes constructing beautiful bridal gowns here and exporting them to high-dollar shops in the United States a real opportunity. Remember how much you paid for your daughter’s gown at that fancy shop downtown? Imagine the profit for the manufacturer if it had been made with the same detail and craftsmanship, but with 85-cents-an-hour labor! Or imagine a one-stop wedding shop featuring everything from gowns to tuxedos to flowers to silver cake service sets to hand-carved wooden wedding party gifts. All produced in Ecuador, all beautifully crafted, and all supplied for a fraction of U.S. costs. Bigger businesses for bigger profits As intriguing as these ideas may
be, you may already have a thriving business in the United States and want
to expand your market. The U.S. Commercial Service tracks trade with U.S.
trading partners and keeps tabs on the growth areas where money is to be
made importing U.S. goods. Here are some of the top areas of greatest opportunity
in Ecuador right now:
The bottom line—opportunity These are just a few of the intruiging business possibilities in Ecuador. Many more can be found in our recently updated Ecuador: The Owner’s Manual. (See: The video about living in Ecuador.) We’ll also be exploring more Ecuadorian business opportunities up close and personal on our next Discover Ecuador Tour scheduled for January 2003. We’re especially excited about this one, because it will be held in conjunction with Gary Scott’s popular and extremely valuable International Business Made EZ seminar. We’ll be visiting, in person, many of the Ecuador locations and business that Gary talks about in his seminar. This will be a double business whammy that would be hard to match. For more information on our upcoming Discovery Tour, contact barb Perrriello, tel. (800)926-6575 or (561)243-6276; e-mail: tours@InternationalLiving.com; website: www.ildiscoverytours.com. Folks are doing it WILL PEOPLE MEET UP WITH THESE ENTREPRENEURS
ON THE DISCOVER ECUADOR TRIP? IF SO, WE SHOULD SAY THAT.
· Walter Briones is a supplier of codorniz eggs to the local Ecuadorian market. Codorniz is the local term for quail, and their tiny, half-dollar-sized eggs are touted from Japan to North Africa as a delicacy, a health tonic, the world’s most complete brain food, and an aphrodisiac. Walter has a fully functioning production facility complete with printed cartons, delivery vendors, and an extensive list of local buyers. He wants to go global, and he’s looking for investors to help him increase production to meet demand. For more information, e-mail: brescor@hotmail.com. · Matt Guillory came to Ecuador looking for the right combination of Old World Latin social and artistic values and 21st-century conveniences. A long-time aficionado of Catholic religious art, Matt established relationships with local antique dealers and master artisans at the heart of Ecuador’s centuries-old religious sculpture tradition. The result was a website offering original and reproduction religious statuary. Matt has now expanded into the reproduction of fine silver and gold pieces. For more information, e-mail: guillory@latinmail.com; website: www.thecatholicequator.com. · Gary and Merri Scott are involved with the production and marketing of a natural substance called BIRM, or bio immune response modulator. The exact effects and activity of BIRM are explained on Gary’s website, but if the reality even approaches the testimonies of some of those who have tried it, Ecuador’s jungles have produced yet another remarkable modern miracle. For the whole story, visit website: www.garyascott.com. · Andrés Cordova is
one of our very valuable legal contacts in Ecuador, but he also has an
interest in tagua as one of his country’s most unique and promising products.
Anyone interested in the possibilities of Ecuadorian tagua would find Andrés
a wealth of ideas and contacts. For more informationa, e-mail: afcordova@accessinter.net.
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