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Agribusiness Investment in El Salvador

by | Nov 22, 2023

Christian Navas
Investment Attraction Specialist
Invest in El Salvador
cnavas@investinelsalvador.gob.sv

LATAM FDI: Welcome to another LATAM FDI podcast. Today, we’re pleased to have Christian Navas with us. He’s an investment attraction specialist with Invest in El Salvador. Today, we are going to discuss agribusiness investment in El Salvador. I’ll let Christian introduce himself and tell us a little bit about his organization.

Christian Navas: Thank you, Steven. First, I appreciate you inviting me to speak about the opportunities that El Salvador offers foreign investors interested in the country. I work for Invest in El Salvador, which is an investment agency of the government that promotes investments in different sectors of the economy. The country has a roadmap and has different sectors that are the main interest to promote for various reasons. I work to facilitate things for people interested in learning more about the country’s companies, private investors, and executives. I also facilitate information services, investments, and the installation of their companies in El Salvador. My area of concentration is agribusiness investment in El Salvador.

LATAM FDI: Thank you very much for that introduction. Today, we will talk about the agribusiness investment in El Salvador. And the first question I’d like to ask has to do with some recent developments. There’s been a lot of news lately about the security situation having improved in El Salvador. What has happened concerning land that was previously inaccessible because of security concerns? Is there now more land open and available for agribusiness activities and purposes?

Christian Navas: Yes, actually, in the past, we have had a civil war. This caused a lot of immigration from rural and countryside areas to the United States or other countries. We lost a lot of agricultural labor that used to work in the fields. After the war ended, we had a problem regarding gangs. These gangs were scattered around the countryside and all these lands outside the urban areas. So, this caused us another problem. The people who used to work on this land could not do so for many reasons. One of them was homicides that were happening in the rural areas. There were other criminal activities as well. Since El Salvador has dramatically improved its security situation in the last two years, we have seen people returning to the land and the countryside to work. We’ve seen a lot of people coming from the United States, Salvadorans who used to live in the United States, returning to El Salvador to invest in the lands they used to occupy. We see that all these properties are becoming activated again. We also see many properties, actually large, that have excellent characteristics and feature the cultivation of different crops. Agribusiness investment in El Salvador is on the rise.

The land is now available for cultivation and has not been appropriately worked in almost 30 years. So, there are a lot of advantages to that. A company or investors can see the opportunity to harvest different fruits and different vegetables. They will find a very fertile opportunity for agribusiness investment in El Salvador.

LATAM FDI: You may have a renaissance in the agricultural sector in El Salvador because of this.

Christian Navas: Yes.

LATAM FDI: What legal changes have been implemented by El Salvador recently to promote entrepreneurial agriculture, food processing in free trade zones, and also for the rapid exportation of agricultural products?

Christian Nava: El Salvador has identified that for many years, food security is one of the main problems the country has faced. We used to import almost 80% of the food that we needed for the citizens of El Salvador. That is a very large number. The government is promoting agribusiness investment in El Salvador, specifically through institutions. We now have an Agriculture Ministry that is working actively to facilitate processes and to facilitate permits. In that way, companies and private individuals can harvest their crops more efficiently and faster to secure the food for the Salvadoran population and export. However, the law’s main benefit is that it affects food manufacturing. In the past month, there has been a change in the Free Trade Zones Law that now allows companies to manufacture and process food in FTZs for export free of taxes. This means that there is an opportunity for foreign companies to make an agribusiness investment in El Salvador. They can export their products to other high-value markets, such as the United States.

We have many foreign trade zones around the country where these companies can come here and work like a plug-and-play or a one-stop shop. They can resolve many of their problems regarding production. Since we are promoting agriculture to attract business from these companies, we have all the inputs they need to manufacture their products. Additionally, El Salvador is increasing its efficiencies concerning borders and exportation. In that way, companies can export their products faster, and we speed up the permitting process to initiate their agribusiness investment in El Salvador. We have excellent connectivity regarding roads, ports, and airports. In that way, we can help companies be faster and achieve more financial efficiency, not only because of the law but also because of our improved logistics infrastructure.

LATAM FDI: You mentioned roads. I understand that El Salvador is taking some actions to improve its road infrastructure. Please give us more details on that and how it applies to the agribusiness investment in El Salvador.

Christian Navas: Yes, El Salvador is interested in becoming a logistic hub for the region. We have a great geographical position in the Americas since we are almost practically in the middle of the hemisphere. Because of this, El Salvador is investing a lot in roads and, in the following years, in a railroad. In that way, goods can move faster inside the country and throughout the region. We’re also investing in ports and airports in different areas, from storage to logistics, in trucks, boats, and airplanes. We are attracting companies that can operate these diverse modes of transportation. But yes, in that way, El Salvador is investing in the infrastructure needed to develop the country’s agribusiness sector.

I invite people to come to El Salvador to see firsthand how our roads are excellent. It’s hard to believe what these roads were like in the past. Now it’s really good to see the excellent condition that they are in. But yes, in infrastructure, we are growing fast and improving measurably.

LATAM FDI: I also heard that the government is incentivizing research and development of the agribusiness sector. What opportunities does this present for technology-based agribusiness investment in El Salvador?

Christian Navas: El Salvador has recently approved the Innovation and Technology Law, which promotes companies interested in having research centers or labs here in El Salvador. They can take advantage of significant tax incentives. The new law also includes the agribusiness sector. Because of the generous provisions of this legislation, investors might see El Salvador as an opportunity to invest in a research center. Since we have the conditions, we have great weather. We have water resources. We have people with technology degrees and engineers who will be an opportunity for companies to start businesses or establish their research centers here in El Salvador.

LATAM FDI: Given all the positive changes that are happening in agribusiness investment in El Salvador, what is the outlook for the sector in the coming years? And what things make El Salvador a strategic, long-term investment opportunity for people from outside your country?

Christian Navas: From my point of view, I see the agriculture and the agribusiness sector as a whole, as a blue and open ocean. The agribusiness sector has been a challenge for many years because of all the insecurity and uncoordinated institutions. Companies were still determining the perks and benefits of making an agribusiness investment in El Salvador. But now things are changing, and we see that we lack a lot of businesses here to develop this industry or to develop this sector specifically. Because of this, potential investors will see this as a blue ocean opportunity since many lands are not properly cultivated. Much of our best land has not been exploited in almost 50 years.

Additionally, we have excellent conditions for shrimp. We have great conditions for different species of fish. We have great lands with different microclimates that have yet to be appropriately produced. We are good at cultivating coffee,  especially specialty coffee. We are good at producing cacao for chocolate and many other fruits in the region.

We have free trade zones and industrial complexes that manufacture food with excellent human resources. Already, companies can see the advantages of exporting to the region. We’re close to the United States. We’re close to Mexico and to South America, as well. There are opportunities to make an agribusiness in El Salvador for companies in South America that want to have their plants in El Salvador to export their products more efficiently to Miami, New York City, New York, and Los Angeles. A company that knows the roadmap for development in the agribusiness sector will find a lot of benefits and profits in investing in El Salvador.

LATAM FDI: Well, as is the case with most of our podcasts, our listeners have questions after listening to the information that our speakers have presented. And I’m sure that’ll be the case with this podcast. So Christian, how would they do that if somebody wants to contact you with questions?

Christian Navas: Great. First, I recommend going to the website of Invest in El Salvador, which www.investinelsalvador.gob.sv. There, you will find information on how to invest in El Salvador. There is a section for companies interested in making an agribusiness investment in El Salvador. There, you will find my personal and professional information to be contacted. Also, if someone wants to email me with questions or inquiries, they can send them to me at cnavas@investinelsalvador.gob.sv. They can find me by accessing my LinkedIn profile.

LATAM FDI: Yes, that’s good. We’ll make it easy for people to access what you just mentioned, and we’ll put links in the transcript section on the podcast’s page. We’ll make sure that anybody with any questions can communicate with you in a very efficient way.

Christian Navas: I will be more than pleased to resolve any doubt or question. We invite any investors and companies in the agribusiness sector interested in investing in El Salvador to contact me and learn more about the opportunities for agribusiness investment in El Salvador.

LATAM FDI: Well, thank you very much for being here today. What you had to say was very interesting, and I’m sure we’ll have you back to talk about more things in the future and hear about the successes that you’ve had.

Christian Navas: Thank you. I appreciate it.

 

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