OBG talks to Eduardo Amorrortu, President, Association of Exporters (ADEX)

Interview: Eduardo Amorrortu

Which export-oriented industries show the most growth potential in the near term?

EDUARDO AMORRORTU: Over the past 10 years, industrial exports measured in real terms have grown twice as fast as primary exports (14% versus 7%). This is largely due to strategic efforts to transform the economic structure from one based on primary materials to one based on industry and added-value.

The agro-industrial sector has developed a wide range of products and continues to do so. Apart from well-known products like asparagus, grape and mango, Peru has recently developed artichokes, peppers, onions, avocadoes and citrus fruits, among others, for export. These products offer significant added-value opportunities. Also, new high-value Andean products and crops are being developed more and are in high demand for their nutritional benefits. While these products normally cater to US and European markets, we see ample opportunity to increase exports to Asia.

Other sectors present opportunities for growth but also demand changes and adaptations to improve processes and competitiveness. For example, the textile industry is emblematic of the export industry. However, it needs to be restructured through integrated investments along the value chain as well as via the development of design and branding to be able to compete in today’s economy. Along the same lines, while the metals industry has a huge potential for growth due to the fact that Peru continues to be a mining country, we need to develop all of the elements necessary to ensure a competitive export industry in the sector.

What are the country’s infrastructural priorities?

AMORRORTU: For the export sector, the modernisation of ports as well as the construction of highways and rail are the highest priority. Peru is a country with diverse and rich productive zones, but these are separated by varied and challenging geography. The lack of connectivity in the sierra and jungle regions undermines the productive and export potential of these regions and the country as a whole. A rail network linking the Pacific Ocean with the Atlantic Ocean, coupled with a system of trunk roads, would allow the country to take advantage of the immense productive and export potential presented by the sierra and jungle regions. But of course, highways and ports go hand-in-hand, and the ports must also be improved.

How might zoning help develop industrial clusters?

AMORRORTU: There is a lack of industrial zones and parks in Lima and other primary cities. We need spaces in which we can concentrate and dedicate our efforts to improving the competitiveness of the industrial sector. Additional zones for industrial development need to be established. Currently, in Lima the industrial zones have been surrounded and limited by urbanisation and the growth of residential areas, which creates an imperfect situation for the industrial sector as well as the population around it. This needs to change. The micro- and small enterprise segment in particular would benefit from being located in predetermined zones of cooperation and collaboration. This would allow them to combine their efforts and pool their resources, improving their competitiveness in the process.

Can small and medium-sized enterprises’ (SMEs’) share of industrial growth be increased?

AMORRORTU: There do exist impressive export operations at the SME level. As well there are links between SMEs and large companies, such that the growth of one leads to the growth of the other. This is most common in the agro-industrial and clothing sectors. However, exports originate primarily from large companies, mainly due to the lack of competitiveness at the SME level. More programmes directed at training small business owners and managers, improving human resources, implementing technological innovations, boosting infrastructural connectivity and then connecting these businesses with the international market would allow this sector to achieve above-average growth.