Publisher: IGM INVESTMENTS. Latin American Director: Margarita Fernández. Project Manager: Silvia Rios. Business Journalist: Karina Menesess. Acknowledgements: Banco Central de Reserva, Ministerio de Turismo.
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FINANCE Solid and Dynamic
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Countless Opportunities
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The Best waves of Central America
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Heading towards a positive change The Republic of El Salvador is located in Central America, it borders to the north and east with Honduras, to the west with Guatemala and to the south with the Pacific Ocean. To the east it has a maritime border with Nicaragua in the Gulf of Fonseca, where it has 9 islands. El Salvador is situated in the pacific Ring of Fire, and its volcanic territory is very active. In fact, 90% of its soil is composed of volcanic materials. As for its climate, it has two seasons: the dry season (November-April) and the rainy season (May-October). In addition, the country is affected by hurricane season in the Caribbean (June-November). With a territorial extension of 21 041 km², the country has 6.4
FACT FILE Official name: Republic of El Salvador Capital: San Salvador President: Nayib Bbukele Population: 6,420,746 Surface: 21,041 km² Official language: Spanish Currency: US Dollar Annual Growth 2018: 2.5% Unemployment rate: 6.40%
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million inhabitants (in addition to 1.5 million Salvadorans living abroad), which makes it one of the most densely populated countries in the world. On June 1th of 2019, Nayib Bukele took office as the new president of El Salvador, prioritizing his efforts in the security and economy of the country. Bukele also has managed to avoid conflicts with the president of the USA, Donald Trump, in the field of migration. In fact, he has preferred to articulate messages that attract foreign capitals, especially Americans. it is important to mention that El Salvador has significant competitive advantages for the location of companies, highlighting the response speed, and geographical proximity, which is complemented by free trade agreements that give access to an important customer market. The free trade agreements that the country has signed with several countries allow access to a potential market of 1,200 million customers worldwide. It is also relevant the fact that the country has one of the most competitive labor costs in Central America, including labor benefits, and the high quality of the workforce that is distinguished in the region. Regarding the economic indicators, the quarterly Gross Domestic Product in chained volume indices in its seasonally adjusted series determined in the second quarter of 2019 an increase of 1.98%. The behavior of this indicator is determined by the favorable performance of the following economic activities: Construction (7.73%); Financial and insurance activities (5.46%);
Accommodation and food service activities (5.29%); Water supply, sewerage and waste management (4.69%); Exploitation of mines and quarries (4.36%); Supply of electricity, gas, steam and air conditioning (4.33%); Administrative and support services activities (3.64%); Real estate activities (3.42%). Other service activities (2.59%);
an increase of US $ 881.9 million compared to the month of July 2019. This is mainly due to the placement of funds for bonds by the Government of El Salvador . On the other hand, the Liquidity Reserve, formed as demand deposits in the Central Bank, increased US $ 13.6 million with respect to the previous months. As for the Foreign Direct
Manufacturing industries (1.94%); Trade, repair of motor vehicles and motorcycles (1.89%); Information and communications (1.59%); %); Transport and storage (1.43%); Agriculture, livestock, forestry and fishing (1.19%); Artistic, entertainment and recreational activities (0.15%), according to data from the Central Reserve Bank of El Salvador (BCR for its acronym in spanish). The Net International Reserves at the end of August 2019 reached the level of US $ 4,575.6 million,
Investment (FDI), according to the BCR, during the first quarter of 2019, the net flow reached an amount of US $ 177.3 million. These resources were mostly associated with the services sector, including the financial sector (US $ 91.5 million) for operations of companies holding shares; the electricity sector with US $ 75.5 million, thanks to the new renewable energy projects, and air transport services and logistics operators with US $ 59.1 million.
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Solid and Dynamic The Latin American countries with the lowest inflation in August 2019 (compared to the same period last year) are El Salvador (-0.5%), Ecuador (0.3%) and Panama (1.1%), These economies have in common that their official currency is the dollar. El Salvador has a solid financial system, comprising 13 private banks. The role of the bank as an intermediary is decisive in the economic dynamics because it captures money from the public, which are subsequently used as funds to give loans to both, people and businesses. The Salvadoran banking system is very solid and dynamic and it grows even twice as much as the country’s economy. As of June 2019, the amount of deposits were $ 12,704 million and in loans $ 12,744 million, more than the same period in 2018, both, loans and deposits maintain a stable trend of average growth near 5% since January of this year, indicating a favorable growth for the sector. The factors that have contributed to this stage are: the rebound in international trade and the recovery of investment in advanced economies. The results of the banking system as of August 31, 2019 are as follow: equity reached US $ 2,212.2 million, assets totaled US $ 18,647.5 million $ 1196.8 million (6.9%) more if compared to the balance of August 2018, and the gross loans totaled US $ 12,881.2 millions. In August 2019, the liquidity indicator totaled 33.92%.
Juan Pablo Durán Escobar President Bandesal
“Of the good things that have happened in El Salvador is that the financial system is very robust, solid and quite conservative, allowing to overcome difficult times without negative impacts at the financial level. We have a very strong commercial bank, a state bank in good condition, a cooperative bank that emerges very strongly and Bandesal, the only development bank in the country, an entity totally linked to the great policies of the Presidency of the Republic”, indicates Juan Pablo Durán, President of Bandesal. Bandesal currently supports 63 institutions. It fulfills the role of a first and second-tier bank, allocating exclusive resources for priority productive areas such as, small and medium enterprises. Its objective is quite clear, however, it also support the big companies. Bandesal, among other services, specializes in the management of trusts in the country, currently it handles 11, of which five are public and six are private. In the agricultural sector, Bandesal operates as a fiduciary with money that the State channels through the bank to support
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the productive sectors of coffee, cane and some other specialized products that the Government decides to support. Currently,, this is under review because the Government aspires to be much broader in coverage, reaching other non-traditional sectors. It also would like to include other crops that are not limited to coffee. According to Durán, Bandesal wants to develop the following three strategic areas: First, ensure that those who do not have conditions to manage a loan due to the lack of guarantees can be supported through the Salvadoran Guarantee Fund. The experience of private banking shows that half of the loans are denied because they do not have enough warranty. In this sense, Bandesal would contribute significantly if it could help solve this situation. Second, Bandesal does not just
Government of President Bukele, but because it is a tangible, evident and forceful reality. In just a few months the country’s conditions are changing rapidly. To the Salvadoran brothers residing in the US I tell you, every time one of them comes to El Salvador with intentions to invest, they first go through adequate training where they have an overview of the situation. Furthermore we will make sure that they have the essential data and information, and we will provide all the necessary guidance, so that when investing, they do it safely”, affirms Durán. Bandesal’s vision is to be a relevant strategic partner for the national and international community for the development of El Salvador’s economy. In this sense, the institution has a high interest in helping successful Salvadorans residing in the US and who already have very good
“On January 1, 2001, the Monetary Integration Law entered into force, incorporating the dollar as El Salvador’s currency, relegating gradually the Colón” want to allocate resources, it also wants to make sure that they are well used and successful. To achieve this, it has created the Training and Business Development Management. Third, the bank’s funds will multiply. In the five-year period, it can grow with more than USD $ 1.3 billion. Bandesal is a bank with triple AAA rating, which can easily raise funds at good rates. “We are living in times of change in El Salvador and I do not say it because I am an official of the
resources, so upon their return they can feel that the Government attends and accompanies them to be successful. In this respect, it is also important to mention that as a result of the migration from this country, remittances have taken a leading role in the development of this sector. According to BNR data, family remittances received by El Salvador as of September 2019 amounted to US $ 4,159.3 million, with a growth rate of 4.4%,
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José Eduardo Luna Executive Director Banco Cuscatlán
equivalent to US $ 176.2 million. During September, the country captured US $ 459 million in remittances, an amount that
advice and training to residents of the United States and family members in El Salvador on how to convert remittances into something better than an expense, which would mean a plus for the country”. “Remittances in El Salvador represent practically the Nation’s budget and in terms of GDP it represents 15% or 20% and it cannot be that this becomes only consumption, it must allow generating a virtuous circle of the economy”, concludes Durán. If we refer to remittances, we cannot stop mentioning Banco Cuscatlán, an entity that manages a flow of remittances that
“The growth of this sector reaffirms the strength of the Salvadoran economy” exceeds US $ 429.3 million received in the same month of 2018. In addition, 1.7 million operations were registered in the financial system for remittances. Of the total family remittances, those received from the United States amounted to US $ 3,949.3 million, growing 4.8% over the previous year. The second country with the highest amount of family remittances was Canada with US $ 37.7 million, experiencing a 6.3% of growth. In this context, BANDESAL is a believer in the productive remittance, and Durán explains that: “It is a product that already exists in some banks but they are not giving it the volume nor are they managing or taking it to the appropriate levels, however, if we join efforts with the national financial system, Bandesal could led the work in providing
exceeds US $ 250 million and has the expectation of doubling this amount. It believes that there is
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an opportunity for banking, both for Salvadorans living in other countries and for people who seek to invest with remittance money in El Salvador. Banco Cuscatlán was one of the pioneers in starting an electronic transfer system. At the end of the 90s it had alliances with the Western Union and Money Gramm remittance institutions, also with Real which is a very strong company, especially in California. “In the financial sector, the attention of sending remittances in a traditional way is critical, it must be agile, safe, reliable, transparent, legal, controlled and monitored, even to avoid money laundering. You must have robust systems, which means a lot of technology because it is important to do it right and we have been facing this challenge since 2016 when we relaunched the bank”, says José Eduardo Luna, Executive Director of Banco Cuscatlán. Currently Banco Cuscatlán works with remittances in a traditional way through Real. However, it is
encouraging that the money that arrives in the country is being controlled, and that the method of sending is credited in electronic accounts to avoid the handling of cash and the banking segment of remittances. So recipients can have an account and withdraw with a debit card at any of their branches. The limitation for this service is that Salvadoran law requires NIT and DUI to open a bank account and many of those who receive remittances do not have a NIT. “The legal framework was changed 2 years ago to facilitate the simplified account opening which is the only one that can be opened electronically and does not require the holder to have a NIT,” says Luna. Luna adds: “We are about to launch our simplified account to benefit those who receive family remittances but currently do not have a bank account. This is very important for financial inclusion, and it is something we are working on, both in the financial industry
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Eduardo Montenegro
Agueda Hilton
William Carballo
President Sisa
General Manager Be Safe Asesores
President Bancovi
and in the bank”. In other aspects, Banco Cuscatlán has been part of the great financial advance of the country. Regarding deposits, it had a contribution of more than 10% and in credits about 10%. It is important to mention that its growth is due to the productive sector. Four or six years ago, most of the portfolios that grew were for consumer and productive loans, however, these have decreased. The trend now has changed and this financial entity is more focused on boosting the productive sector without neglecting consumption, because the growth of this sector is limited by the indebtedness capacity of the people. The bank currently has 4% market share. “During the last 3 years we have doubled our market share. We do it in the traditional way but we also facilitate new transfers methods, such as, the mobile wallet or the simplified account, where we see a great opportunity because with this Government there is a great opening for Salvadorans from abroad to have savings in the country”, says Luna. Luna indicates that many clients approach or write from the US, mainly from California, indicating that they would like to have an account or maybe they are customers of US banks but they need to have a local bank that serves their families, either because El Salvador has better interests or because they want to buy a home in this country. “Banks must facilitate the paperwork for compatriots, the regulatory framework should be modified so that they can open accounts online. There is good receptivity on the part of the Government and there is a lot of work to do because the Bank Law and regulations must be reformed. We are at the right time to change the world of investments and the
opportunity to make international transfers with efficiency, speed and especially at low cost. “We have a solid bank, a very stable financial industry that is growing and a dollarized economy that eliminates foreign exchange risk”, Luna concludes. As of May 2019, banks and insurers were the main liquidity providers, contributing 77.46% and 11.45% respectively, and in terms of the Gross Domestic Product, they contributed 4.8%. Specifically, the Salvadoran insurance sector in the first half of 2019 experienced a growth in its net premiums that experts say had not been registered in many years. As of July 2019, there was an accumulated of $ 395.4 million in net premiums, which is equivalent to a growth of 9.4% ($ 34 million) compared to the same period of 2018, according to data from the Superintendence of the Financial System. The Salvadoran Association of Insurance Companies (ASES) considers that the industry’s behavior is framed “slightly above the projections that the risk rating agencies estimated for this year”, in which they indicated that the industry would be growing for 2019 between 3.5% and 5% at the end of the year. At the end of 2018, the industry’s share of GDP was 2.52% and an ASES study showed that only 26% of the population has some type of insurance policy. In this sector, it is necessary to mention SISA, the leading insurance company in El Salvador, owning the largest market share in terms of premiums, the highest equity and the best results in the industry. “Within the insurance market of El Salvador there are different approaches to see companies, there are the so-called big ones,
of almost 30% so far in 2019, from June to June. The outlook for the end of the year is favorable because they are in the final process of acquiring operations of Scotiabank and Scotiaseguros in El Salvador. By adding this, Sisa ratify the first position in image and size. It is also important to mention the increase in the risk rating of the company, which went from AA, to
“Remittances are an important part of the Salvadoran economy, considering the number of migrants living mostly in the USA” AA + 1. Most market indicators place Sisa as the most profitable insurance company in El Salvador, and its size places it at the Central American level within the 10 most important companies. “We are the insurer that pays more insurance claims, for our size and for the philosophy of being with our clients when they need us the most, reaffirming the commitment and compliance of obligations”, says Montenegro. To conclude Montenegro states: “Today is the best time of the last 10 years to approach El Salvador,
Impulsando
Ahorro
“Banks, insurers and cooperatives are driving the development of industries in the country” direction of the economy, there are going to be many changes and we must think about people who are in different US states, to facilitate them to do business and transactions through accounts in El Salvador”, says Luna. The idea is to facilitate Salvadorans to open electronically an account, using products to facilitate transfers. Apart from the traditional methods the bank is working in different alliances because it believes that there is an
which are those that have almost 20% of market share, and our company is one of them. Then there is the group of mediumsized companies, some with links to financial groups and others with surnames of relevant international companies such as Mapfre; these have support from their headquarters, and others may have links with financial companies such as Davivienda or Scotiaseguros. And we have the smallest group of companies, some very specialized and focused on bonds or health. Companies that have developed and become highly competitive which speaks well of the industry and the possibilities for our consumers to find a large number of suppliers. This make our work hard because the competition is very large, and this is generally good for consumers”, says José Eduardo Montenegro, President of SISA. In the particular case of SISA, it has shown a very strong growth
the prospects are very good because the new administration guarantees legal certainty and the possibility of doing business in the country. It has directly attacked the problems that cause more pain to Salvadorans, which is crime”. Agueda Hilton, General Manager of Be Safe, indicates that the sector has grown thanks to different aspects, and one of the most relevant is the culture of prevention. Be Safe is an insurance brokerage company, which provides advice to companies, institutions and people who wish to purchase insurance. The company focuses on knowing the products and the market to provide personalized support to each client. “Almost all insurance brokerage companies offer the same, but our obligation as a company is to advice costumers on the best product that fits their needs, budget and circumstances ”, concludes Hilton.
Soluciones Financieras de AHORRO Y CRÉDITO
Within the financial sector, it is important to mention cooperatives. The Federation of Cooperative Savings and Credit Associations of El Salvador (FEDECADES) registered a 471.4% growth in its assets in 10 years by betting on the diversification of services and the public. This 2019 it is expect to close with a 15% growth and add $ 860 million in assets. The credits are destined to sectors such as, agriculture, commerce, consumption, housing, among others. Demonstrating the strength of
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Manuel Coto General Manager Cosavi
the cooperative sector, which has grown in the financial system and now represents 5% of the USD 20 billion of the total assets of the sector. There are 6 cooperative banks within the regulated and credit system and Bancovi represents the 25% of it. Willian Carballo, President of Bancovi, explains that his strategic product is the Current Account, a financial product that until now had been exclusive to the Commercial Banking. “We are also working to directly manage remittances, we have talked to a US company and we are already in the stage of signing contracts, having a Master Card and achieving an alliance, especially in the remittance line to provide direct access for clients who are outside and can invest”, says Carballo. Bancovi, within its strategic line, points to Salvadorans abroad, because when they become partners they become investors, generating a return of around 8%, 9% or 12%, which no other financial instrument offers. Additionally, this is supported by
As a financial institution, Bancovi, opens the doors to investors, they want to be known and show to the world that Bancovi is a 100% Salvadoran heritage. Another cooperative that is worth mentioning is Cosavi. It was recognized by the World Business Confederation, wining the highest award for business excellence, the “The Bizz” award, standing out among several companies across the country. At the end of 2018 Cosavi had
assets for more than 30 million dollars. At the end of July 2019 it had an increase of 8 million dollars
“The sector has growth expectations for 2020, and foreseen to continue contributing to the country’s development” the 54 years of experience of the cooperative. “It is difficult for any other bank to offer to be part or owner of an institution, we open the door so that everyone can be associated. Some have their account and see it as their pension fund, and year after year they withdraw dividends and return to the country where they have emigrated, but with the certainty that they money is working here”, says Carballo.
“Our flagship product is our Investment Certificate for associates, which generates added value, is tangible and they can see the profitability of their savings”, says Manuel Coto, General Manager of Cosavi. Cosavi’s work is based on 4 pillars: The first is that the Board of Directors and the Supervisory Board work together towards the same vision. Second, their collaborators work with
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dedication and have experience because they are constantly trained to strengthen their knowledge at a national and international level. The third pillar is its associates, who are given advice, profiting their savings and solving their financial matters with the different lines of credit. The fourth pillar is technology, Cosavi is innovating, working on expanding services to handle family remittances through prepaid cards, with an alliance
with Master Card. This service is scheduled to be launched in late 2020, and will initially only be provided for remittances from the US. “Regarding remittances, we receive between US $ 200 and 300 thousand a month in all agencies”, adds Coto. Cosavi is also working on its infrastructure, one of its mediumterm projects will be the Cosavi Business Center, an investment that will reach US $ 15 million.
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Countless Opportunities Currently, the Salvadoran industry represents 16.1% of the Gross Domestic Product, under the new system of National Accounts of the Central Reserve Bank, making it one of the most important productive activities in the country. This means that, as the industry advances, so does the economy. It is the economic sector that produces 97% of the country’s exports and generates 16.2% of. the GDP. It contributes 18% of the tax collection and generates 23% of the formal jobs in El Salvador. The workers and businessmen of the industrial and agroindustrial sectors are the greatest
Luis Antonio Tona General Manager Toto
The manufacturing industry, including maquila, exported US $ 3,916.5 million with an interannual growth of 0.3%, equivalent to an additional US $ 10.8 million. The increases in exports originated in the following sectors: food
“According to the World Bank in its ease of doing business ranking 2020, El Salvador is ranked number seven in Latin America” generators of employment, stimulating at the same time other sectors of the economy that provide goods and services to the industry. Exports as of September 2019 showed an increase of 0.5% equivalent to US $ 22.9 million more for the same period in 2018. The main export destination is the United States, with a 42.1% share, equivalent to US $ 1,909.4 million, followed by Honduras, Guatemala, Nicaragua, Costa Rica, Mexico, Panama, Dominican Republic, Canada and Spain.
products processing with a contribution of US $ 32.3 million; manufacture of paper and paper products (US $ 26.1 million); manufacture of textile products (US $ 22.3 million); beverage manufacturing (US $ 22.3 million); manufacture of pharmaceutical products, medicinal chemicals, and botanical products for pharmaceutical use (US $ 18.8 million); manufacture of rubber and plastic products (US $ 11.8 million) and manufacture of chemical substances and products (US $ 11.4 million),
according to BCR data. The plastics industry is the third most relevant sector in terms of exports in El Salvador. During 2018, these accounted for 6.5% of all overseas sales equivalent to about $ 450 million. “In El Salvador this industry is the third most important, we are not the largest employers, but we represent a large part of exports; The plastic sector exports more than USD 400 million a year, which represents a significant part to the country’s economy. The largest exporter is the textile area, however, our sector is the first in investments in both machinery and technology. There are no challenge in the background of this industry because it is committed to growth and economic sustainability”, says Luis Tona, General Manager of Toto. Within this industry is the company Toto, which has 50 years of experience and is a leader in technological innovation. In 2018, it pioneered in El Salvador introducing 100% biodegradable packaging. By 2019 they will be the only ones in the country to provide a watersoluble solution, manufacturing flexible and water-soluble bags that dissolve in water.
industry is trying to minimize in El Salvador and other parts of the world”, concludes Tona. The company’s vision is to pack with sustainability, innovation and cutting-edge technology, in harmony with the environment. In this sense, it will be the first company in the plastic industry in El Salvador to manufacture bags with 100% biodegradable technology, 100% recyclable material and renewable energy. Tona indicates the following: “The factory was installed thinking that in the future it will work with renewable energy such as photovoltaics. We are the only plastic industry in El Salvador that has this capacity installed, there are others, but with very small capacity, we are constantly growing”. Toto believes in the Salvadoran market, but still considers the option of reaching other markets to continue enhancing their capacity and human quality skills. The company is currently looking for a market in Guatemala, Honduras, Mexico and is in a raid to try to reach the US, a market it continues evaluating. It is also important to mention that El Salvador offers an ideal location for food production and processing, as well as, to specific market niches that go
“El Salvador is an attractive investment destination for the following reasons: Productive labor, Competitive costs, Monetary stability, Competitive infrastructure, Attractive fiscal incentives and Strategic location” These soluble bags are from the BIOBAGS brand, they are made with Japanese technology based on coconut palm that accelerates biodegradation from 1 to 5 years, then be reintegrated into nature and thus avoid contamination. Biodegradable technology is certified worldwide under ASTM D6954 of the American Society for Testing and Materials; and approved by the FDA of the United States, allowing to be in contact with food. “Our difference and inside secret is our mystical relationship with the customer. We manage a very close relationship, because without that relationship the business would not exist”, says Tona. “The plastics sector is at a time of difficult acceptance, has been demonized incorrectly and that is one of the challenges that this
beyond traditional agricultural industries. El Salvador is a regional leader in the production and export of juices and snacks. It also has a proven record in attracting investment in this area and offers opportunities for the establishment of production, processing and distribution centers for export-oriented food products. In addition, it has complementary industries in areas such as packaging and process technology, among others. The Investment Export Promotion Agency of El Salvador (Proesa) has identified the following market niches that offer excellent investment opportunities in the agribusiness sector: cultivation of ornamental plants, El Salvador offers opportunities for the establishment of indoor or
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specializing in coffee production, but it was in 1979 that Coex acquired the San Miguel benefit, located in Ahuachapán. The company then started working in merchandising and no longer in production due to the agrarian reform, producing 4 million quintals at that time, and 600 millions today.
Raúl Álvarez President Coex
shade cover crops, especially for the propagation and production of cuttings or stakes for the export market. For these crops, the elevations of 700 to 900 meters high offered by the western part of the country are ideal, since the average annual temperature is 22 to 24 ° C (72 to 75 ° F). In addition, it has water availability for irrigation and a topography that goes from flat to semi-flat. Aquaculture sector: The privileged warm tropical climate that the country has and its strategic location are ideal for aquaculture production throughout the year, and for the marketing of fresh fish fillets to markets in developed countries. Fruit sector: In El Salvador, five types of fresh fruit have access to the US market: hybrid coconut, Persian lemon, cashew, papaya and pineapple, MD-2 variety and fine cocoa aroma . In addition, the country has a large number of areas available and suitable for the cultivation of these five fruits and fine cocoa aroma , ranging from sea level
In 1989, COEX decided to give equal importance to the financial area, financing customers and
supporting them, looking to how accommodate their product in price and quality, allowing them to grow over time. “This financing could also be granted by the Government or private financial entities but unfortunately in El Salvador the financing for the sector is extremely limited, very few people support, but financing could be obtained from the same consumers, something important to give sustainability
to the business long term”, says Raúl Álvarez, President of Coex. Currently, the company has five agencies distributed in the most important coffee production areas in the country. The company provides its products to a wide range of globally recognized buyers, from specialized merchandisers to prestigious roasters. Coex El Salvador was founded in 1975, in 1976 in Guatemala and in 1979 in Honduras and Miami. The Vision of the company is to offer the consumer and the buyer the coffee they need for their markets. It is necessary to have the variety to serve customers with differentiated, controlled and well managed coffee so that producers have profitability. Álvarez comments: “We want to be an environmentally friendly company, that is very important in the coffee sector, we must
Exports and Total Imports January - August 2017 - 2019 / Millions of US $
FOB Exports
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raise the coffee sector so that there is more production and farms are not abandoned”. Coex will begin to create the name of its specialty coffees, and will seek financial support so that its people continue to producing and exporting. Of its production, approximately 45% goes to the US, 35% to Europe and the rest to Asia. The buyer of his special coffee is in the USA. “Every year 10 or 12 coffee
In El Salvador it is possible to make a special, differentiated coffee. The farms are in the best area, are well maintained and with a friendly environment that creates a positive environment for the community. “At COEX and in the roasting plant, we focus on promoting the production of differentiated coffee through our brand, Coffee Nest. We also support the children of the producers through the COEX Foundation
companies visit us, especially from the US, there is a specific one that goes to the farms and supports us in the social area to work with the Coex Foundation, for the education of children and to cover their basic needs. There is a very good communication that helps to improve the quality and social aspect of the area”, says Álvarez. There are opportunities to work and invest in the coffee sector.
and the Supérate program, where they can develop their technical skills, learn English and attend courses of values. Under the Edubecas program, we provide school scholarships from kindergarten levels to university careers to children and youth in the coffee sector because we recognize that for the coffee business to grow and be sustainable we must ensure the well-being of the people
Source: ASI Ranking 2019
“El Salvador is a regional leader in the production and export of juices and snacks” to 600 meters high. These crops offer opportunities for export to the United States, to meet local and regional demand, or to meet the demand for pulp and fruit concentrate. At the end of 2018, coffee exports represented US $ 113.40 million, equivalent to a 6.6% reduction compared to the US $ 120.94 million reported in 2017. Meanwhile, exports by volume in 2018 showed an annual growth of 7.7% by sending additional 35.18 million kilograms to the foreign market, equivalent to 2.53 million additional compared to 32.64 million kilograms in 2017. Between 2018 and April 30, 2019, El Salvador has exported 396,577 quintals of coffee, summing up sales for $ 49,910,563. And talking about coffee, it is necessary to mention this great company called Comercial Exportadora (Coex). The company was stablished in El Salvador’s western area in 1975
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Jorge Jiménez General Manager Sello de oro
who constitute it”, concludes Álvarez. Data from the Poultry Farmers Association of El Salvador (AVES), indicate that in 2018, per capita consumption of chicken and eggs grew 4.4% and fell 0.5% respectively, compared to the 2017 data. In addition, they reveal that in the last five years, Salvadorans went from consuming an average of 40.6 pounds of chicken and 207 eggs in 2014 to 47 pounds
secondly the search for more nutritious foods such as eggs and chicken meat, since they are the lowest-cost animal protein compared to beef or fish. There are opportunities in this area because it is competitive in price and quality”, says Jorge Jiménez, General Manager of Sello de Oro. The company is over 50 years old, and it was founded by a group of pioneer farmers in the chicken industry. At the beginning the production was quite artisanal, but over the years it started using technology and consequently it reached volumes at an industrial level, until the moment they needed to provide genetics, which was given through their sister company Criaves. Criaves is the largest chicken incubator in Central America and one of the leading genetics companies worldwide with more than 40 exclusive distributors. Sello de Oro is a pioneer in the broiler industry and its strength lies in the development of valueadded products such as breaded
INDUSTRY
Alejandro Villalta General Manager Agua Alpina
followed by El Salvador, with one million dollars, Costa Rica, with 800,000 dollars, Honduras and Guatemala, with 600,000 dollars each , and Nicaragua with $ 400,000, as indicated by the website CentralAmericaData. The North American country is the origin market of the imports that has grown the most in the last eight years, since in 2012 it represented 28% of the total Central American purchases, and in 2019 that proportion
market in 1994, at that time there was only one company that distributed water in glass carafes to homes. Alpina changed the market by entering with plastic bottles, which quickly entered the market with good public acceptance, mainly because the packaging was more practical. Another innovation that the company had was to sell water with a low percentage of sodium. These two important characteristics led Agua Alpina to be introduced in the market, starting then with 30 routes and reaching 180 today. Alpina is associated with the IBWA (International Bottled Water Association). To be members of that association they must have the NSF certification, which makes an annual inspection to evaluate the processes and quality. Alpina has different product lines such as: flavored water, Alpina 5 gallons, Alpina sport,
“According to AVES, the investment in the poultry sector is around $ 15 million annually” foods and a variety of cold meats. Other products include fresh chicken, wings, fillets, marinades, shredded meat, chicken taco, etc. The products are diversifying in respond to the market demands. “Lately we have focused on certifications to be able to be at the level of the different countries of the region, and thus have the capacity to leave the borders of El Salvador to export. That is a great challenge and opportunity, especially in valueadded products such as cooked or fried products that do not have sanitary restrictions for export”, says Jiménez. In the medium term, the company intends to reach the US, a nostalgic market where their products are known and Sello de Oro is recognized as an emblematic company. Jiménez adds: “We want to transcend in the Central American region to go to other markets where we can be very competitive in terms of quality and product innovation”. From January to March 2019, the main importer of bottled water in Central America was Panama, with three million dollars,
increased to 58%. However, it is import to highlight the presence of excellent and recognized companies nationwide in the area of bottled water, such as Agua Alpina, a company that entered the
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and 186 eggs in 2018. Compared to its Latin American peers, El Salvador is below the average consumption of poultry and eggs. According to the June 2019 report of the Poultry Industry magazine, the country consumes an equivalent of 21.3 kilograms, representing only two thirds of the region’s average (30.7 kilograms or about 67.6 pounds); and almost reached the average in the number of eggs consumed per person (209). An estimated of 9,000 people are directly employed in poultry production in El Salvador (80,000 indirect); 60% belong to the rural area and a large part are women. “The poultry sector is growing for two reasons: Firstly, the population increase and,
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ice tea, Alpina Bebé, to mention few.. The company’s main objective is to have national coverage with quality service. Besides, they try to ensure that their equipment and processes go with a degree of automation, investing in it to achieve greater productivity. “We are established in this market although we also plan to reach abroad, we have very good quality products, which would allow us to reach other countries, however, for the moment we have not made any strategic partnerships but it is in our future plans”, concludes Alejandro Villalta, General Manager of Agua Alpina.
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The best waves of Central America
El Salvador offers a wide variety of hotels; excellent gastronomic and shopping options, as well as, an outstanding road connectivity and proximity between multiple tourist attractions. The natural wealth of the country together with the Tourism Law with its attractive fiscal incentives, and the strong support of the Government of El Salvador, have made this sector one of the most dynamic in the Salvadoran economy, according to official data, and for this year is expected to continue this trend. From January to August 2019, El Salvador received 1.7 million visitors, representing an increase of approximately 3% over the
previous year. El Salvador has a solid and growing tourist demand, it has an air hub with traffic of more than 470 weekly arrivals and departures. Additionally, it offers attractions and tax incentives guaranteed by the Tourism Law and the International Services Law. Among the main tourist attractions of the country are El Imposible National Park (a tropical mountain forest that houses the largest biodiversity of plants and animal species in the country); San Andrés (an old capital of a Mayan manor that prevailed over the other settlements of the valley between 600 and 900 AD); Suchitoto (a colonial city with entrenched cultural traditions, stone streets, and adobe houses with forged balconies); just to mention a few. When referring to its cuisine, it
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TOURISM
October, where it is possible to see waves of more than 3 meters. It is there when the waves take large dimensions and consistencies, achieving the maximum splendor of Salvadoran surfing. Surf City is the emblematic project that the Government of Nayib Bukele intends to promote in the next five-year period in the main
Salvador is the ideal destination for the establishment of hospitals and specialized clinics aimed at attending patients residing in the United States and Canada. The arrival of tourists to El Salvador for medical reasons, under the program of the Government and private entities of the United States, quadrupled
“The strategic location of the country makes it an important hub for international events” beaches of El Salvador with the purpose to stimulate tourism in the country. Morena Vigil, Minister of Tourism, explained that the project will be implemented in “the premium beaches for
to more than 24 thousand people in less than seven years, according to figures shared in Washington DC by officials from that country. El Salvador promotes medical tourism under the program
“San Salvador is the oldest capital city in Central America. It was founded on June 18, 1524 by the conqueror Pedro de Alvarado” same period of the previous year. It is expected that more than 2.6 million people visit El Salvador during 2019, presenting a growth of 6.2% compared to last year. As of August 2019, the income of foreign currency derived from visits for vacation to the country increased by 16.4%, reaching $ 42.4 million. In terms of the arrival of international visitors, 62,552 tickets were registered, of which 48, 209 entered by land and 14,343 by airway. Regarding the income from January to August 2019, foreign exchange earnings in El Salvador have been $ 1,142 million, 12% more than the same period of the
can be said that the typical food for excellence is the pupusa, which is a corn tortilla filled with cheese, beans or pork, among other ingredients. The traditional Salvadoran cuisine uses corn as the main element, reflecting the customs of the ancient villages. However, if El Salvador must be recognized for something, is because it is one of the ten countries in the world that has the best waves to surf. The best waves for surfing in El Salvador are those of Sunzal beach, La Paz, La Perla beach and El Zonte The season to find the best waves is between the months of April to
Source: Ministry of Tourism
surfing”. “El Salvador is more than what is said, we want you to come because we have the 10 best beaches to surf and also is a place to share with family or friends; disconnect and enjoy the best weather conditions and our people who are very friendly”, says Vigil. In the medical tourism niche, El
“El Salvador: Destination for Health” , a partnership between the tourism industry, the health sector and private companies in the United States. Medical tourism in El Salvador and other countries is growing due to as the high health cost in the United States, compared to those in Latin American countries.