From ostrich to false teeth: Chile's new exports

Ten years after privatization began, exotic products are gaining ground.

The new image of exports in Chile is the ostrich. Breeding farms dot the landscape around the capital city Santiago, and although the industry is still in its initial stages, the long-necked birds are a symbol for the alternative products being cultivated for today's ever-changing global market.

Just as ostrich is marketed as the healthier choice in meat, ostrich breeding may be the wiser investment for small-business exporters in the Chilean agro-industrial sector. While traditional exports such as copper, fruit, and paper still dominate in volume and profits, new alternative exports are gaining ground because of their resistance to recession.

"Ten years ago exporting ostrich meat was unheard of - now it is a premium product people are willing to pay for," says Francisco Storch, co-owner of Chiletruz, a large-scale farm that is breeding ostriches for eventual export to Belgium, England, and the United States. The Chilean Association of Ostrich Breeders, of which Mr. Storch is a member, has grown to 15 members since its inception in 1995.

Five years ago, even Chilean wine was classified as a nontraditional export because of its low profile next to bigger competitors. Today it has shifted into the traditional-exports column, earning Chile $388 million in 1999. Total exports from Chile are expected to reach $17 billion in the year 2000.

From 1995 to 1999, the principal growth in nontraditional exports was concentrated in the industrial and manufacturing sectors, with products such as toilets and dog leashes topping the list. The more exotic exports - such as bovine plasma and dehydrated eggs - are nascent efforts in the agro-industrial sector.

These exports are a mix of both native and non-native products like the ostrich, thanks to the initiative of a few entrepreneurs. "The growth in non-traditional exports comes from the individual who is studying the market, and who is willing to make the contacts on his own, because the government does not participate in small-scale operations," says Marcelo Abrigo, manager of the National Association of Exporters, Asexma. Felix Martin, sole manufacturer in Chile of artificial teeth, has been promoting his product on his own in Argentina, Uruguay, and Paraguay for more than 50 years. "I am my own best salesperson. Unfortunately, working with the government is like having a patrn, and that doesn't work when you are trying to sell false teeth," says Mr. Martin.

This "anything goes" entrepreneurship has been a boon to countries like Chile, which must continually reinvent themselves to stay competitive with larger neighbors such as Argentina and Brazil. According to a report by the foreign affairs ministry, the general strategy in this haphazard landscape is still based on the old rules of supply and demand. Each new product is linked to a specific demand abroad and usually there are no more than two companies operating in the same area, which provides some competition but generally leaves entrepreneurs to stay focused on their product for continued improvement. The report also acknowledged the efforts of a new generation of entrepreneurs, who before 1990 were hindered by Chile's isolation under dictatorship.

Chile benefited from record growth rates between 1990 and 1997 through privatization and large-scale investment in the New Economy. The challenge is to maintain the same growth rates with continual investment by diversifying resources and markets, economists say.

(c) Copyright 2000. The Christian Science Publishing Society

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