Guatemala's Traditional Investment Areas Go Back Home

GUATEMALA'S
INVESTMENT OPPORTUNITIES


TRADITIONAL AREAS | NON-TRADITIONAL AREAS


TRADITIONAL AREAS


AGRICULTURAL PRODUCTS

An agricultural country, Guatemala's coffee, sugar and banana exports are an important source of foreign exchange. the country's climate is especially suited to the cultivation of vegetables, fruits and ornamental plants, the production of which has grown at a spectacular rate in the past few years.

Areas of potential interest for co-investment are found in ancillary services for this industry, such as: refrigeration and freezing, vacuum packing, and processing (marmalades, juices, cereals, canning, etc.)

Guatemalan export of these products to the United States receives preferential tariffs and other benefits under the General System of Preferences (GSP) and the Caribbean Basin Initiative (CBI).

HYDROBIOLOGIC PRODUCTS

Guatemala's territorial waters are an abundant source of fish, including sardines and red snapper. The private sector in Guatemala is very interested in attracting foreign investment for the development of this industry and ancillary areas.

The natural and artificial lagoons, existing throughout the South Coast area, have led to rapid development of shrimp farming, which has become a principal export to the U.S. and Europe and is carried out under strict sanitary controls.

With the construction of a new port at Champerico, the seafood industry is expected to grow, along with investment in related industries.

ORNAMENTAL PLANTS

Thanks to the diversity of micro climates and extensive arable land, Guatemala is able to produce all types of ornamental plants throughout the year. The mountainous, volcanic area is suited to: Tillandsias, Aphelandra, Hedera, Cissus, Maranta, Peperomia. The area of the South Coast, near the Pacific Ocean, provides ideal conditions for: Aglaonema, Brassia, Codiaeum, Dracaena, Ficus, Polyscias, Scindapsus, Syngonium and Philodendron.

The tropical forests of the northeast and southeast produce palm varieties such as Phoenix and Arecas, as well as Beaucarnea, Yucca, Cordyline and Sansevieria. The coldest area of the country, northeast of the capital and in the western highlands, is ideal for the cultivation of flowers such as roses and carnations, as well as decorative greens.

RUBBER AND ITS DERIVATIVES

In the 1960's, Guatemala encouraged the cultivation of rubber in areas favorable to the cultivation of Hevea brasilensis: over 1500 mm of annual rainfall and temperatures over 25deg. C.

Production has continued to grow since 1971, today reaching 20,000 tons a year, thanks to 383 plantations which plant 30,800 hectares (barely half of their available area). The majority of these plantations are located in the Department of Suchitepequez, 140 kilometers from the capital.

Over the past few years, Mexico has become a primary buyer of Guatemala rubber exports, the majority of which is in the form of latex and the varieties SGR 10 and 20.








FURNITURE INDUSTRY

Guatemala has 4.4 million hectares of forest, large areas of which contain precious woods, supplying the wood working and furniture industry.

Furniture manufacturers in Guatemala are well-known in the export market for the high quality, fine woods, and competitive price of their products.

This industry has a wide variety of production styles. Investment potential can he found in drawback manufacture of components and finishes, as well as in the marketing and distribution of wood products.

Reforestation is also seen as a possible area of investment. Economic data on the annual growth of pines are available for various regions of Guatemala.

MINING

Throughout the country, Guatemala's mineral resources remain almost completely unexploited. Many types of mineral deposits, both metal and non-metal, are distributed in four areas.

The first is in the Peten, in the northernmost part of the country. Here the sedimentary rock contains deposits of clay, sand and limestone.

The second region, in central Guatemala, is made up of igneous and metamorphic rock forming the mountain range called the Central Range, which runs from the Mexican border to the Caribbean Sea. Several metal and non-metal deposits may exist in this area, including: gold, silver, chromium, molybdenum, nickel, marble, and jade.

The third region is in the mountain range made up of tertiary volcanic rock. Many mineral deposits such as bentonite come from post-volcanic activity. This area also contains large deposits of pumice stone and diatomite.

The fourth region is the Pacific coastal plain, which is about sixty kilometers wide. Clay is the principal

resource produced by the large gravel deposits here. Mineral deposits such as magnetite can be found along the Pacific beaches.

PETROLEUM

Guatemala has four sedimentary basins located in the north, south and eastern sections of the country, all with potential hydrocarbon reserves: southern Peten, northern Peten, Amatique and the Pacific. Exploration to date indicates the existence of both large and small fields, with recoverable reserves of between 20 and 30 million barrels of petroleum of varying API gravity, from heavy crude to medium and light grade.

Approximately 65% of Guatemala is covered by sedimentary rock, indicating the probability of finding oil in almost anywhere in the country.

Geological events have produced conditions favorable to the exploitation of hydrocarbons in the Peten, Amatique (Izabal), and Pacific basins. Complete geological data, as well as data on exploration and extraction, have been compiled for each.

Studies are available from the General Office of Hydrocarbons, under the Ministry of Energy and Mining, containing all information necessary to determine investment potential. Final reports exist for over seventy wells. These studies include analyses on geochemical and paleontological features, as well as on sediment and geological structure. Logistical considerations involved in extraction are addressed with maps indicating roads, geographic and topographic accidents, and exact location of wells.

METALLURGY

The Guatemala Chamber of Industry, with the help of ONUDI (United Nations Organization for the Industrial Development), set up and coordinates an industrial subcontracting exchange. The exchange provides a mechanism for matching demand (contractors) with supply (subcontract) for the manufacture of parts, pieces and components, as well as the awarding of services.

The parts and pieces can range from screws to pulleys to more complicated machinery.

It is important to note that, in the area of metallurgy, as in other potential investment areas, Guatemala has a large, low-cost work force.

DRAWBACK

The drawback business, begun in Guatemala at the beginning of the 1980's, has become increasingly important to the country's economy, registering Sustained growth for the past six years. Under the drawback system, businesses working within an international framework are able to take advantage of lower labor costs without being subject to tariff and other trade harriers.

Drawback is not limited to the assembly of clothing. In the past two years, more complex processes, requiring high technology and specialized labor, have turned to drawback.

Examples of drawback businesses operating in Guatemala are chemical synthesis, airplane assembly and the production of electrical goods.

The field is open to other types of operations such as data processing and services related to information systems that tie in with international courier services.

Among the many advantages Guatemala offers to the drawback industry is a qualified labor force, with the ability to operate and teach advanced technology.


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