{"id":22015,"date":"2024-02-10T13:59:39","date_gmt":"2024-02-10T13:59:39","guid":{"rendered":"https:\/\/viviruruguay.com\/why-invest-in-agribusiness-in-uruguay\/"},"modified":"2024-02-10T13:59:39","modified_gmt":"2024-02-10T13:59:39","slug":"why-invest-in-agribusiness-in-uruguay","status":"publish","type":"post","link":"https:\/\/viviruruguay.com\/en\/why-invest-in-agribusiness-in-uruguay\/","title":{"rendered":"Why invest in agribusiness in Uruguay?"},"content":{"rendered":"

Uruguay stands out for its strong democratic system, characterized by the alternation in power of its three main political parties. This approach ensures respect for the business environment and establishes clear rules, contributing to one of the most egalitarian countries with the highest per capita income in Latin America and the Caribbean.<\/p>\n

In 2019, its economy experienced 0.2% growth, marking more than 17 years of continuous expansion, representing the longest period of sustained growth in its history. Despite moderate growth, the country has proven to be resilient to regional instability, thanks to its macroeconomic stability, prudent policies, export diversification, lower banking vulnerability and considerable reserves, which have allowed it to maintain stability in a challenging global and regional context.<\/p>\n

The Investment Promotion and Protection Law No. 16,906 guarantees equitable treatment for foreign investment, with no restrictions on the repatriation of capital or on the transfer of profits, dividends and interest.<\/strong> This openness has positioned Uruguay among the most attractive economies to invest in worldwide, according to the ESG index, which values governance, as well as social and environmental aspects, and is also reflected in the EMBI country risk indicator, highlighting Uruguay as the safest destination for emerging investments.<\/p>\n

Uruguay promotes the free trade of foreign exchange, without the need for prior authorization for the movement of money or restrictions on the entry and exit of capital. The country does not impose export restrictions on agroindustrial products.<\/strong>The sector accounted for 82% of exports in 2019. With 16.4 million hectares suitable for agriculture, more than 90% of its territory, and a four-fold increase in land value in the last 15 years, Uruguay has enormous potential to increase its agro-industrial production. With a population of 3.5 million, the country produces food for 28 million people, and global demand for agricultural products is projected to continue to grow, driven by consumption in developing countries.<\/p>\n

Uruguay is part of the world’s leading food exporting region, together with Argentina, Brazil and Paraguay, and has significant comparative advantages in international food production. It stands out for the quality and safety of its agricultural products, backed by rigorous sanitary controls and a traceability system in cattle breeding that ensures transparency from the birth of the animal until it reaches the consumer.<\/strong> This traceability approach extends to other products such as poultry, honey, citrus and wines.<\/p>\n

Cont\u00e1ctanos para m\u00e1s informaci\u00f3n<\/span><\/a><\/p>\n

Finally, Uruguay is committed to sustainable agricultural development, implementing plans for responsible soil management and sustainable dairy production, among others, thus ensuring a promising future for its agroindustrial sector.<\/p>\n

Economic importance of the Agroindustrial Sector in Uruguay<\/h2>\n

Participation in GDP<\/strong><\/h3>\n

Agriculture and agroindustrial value chains play a fundamental role in the economy, contributing significantly to the economic dynamism described above. In 2019, the agribusiness sector accounted for 11% of Uruguay’s Gross Domestic Product (GDP). This contribution was evenly distributed between the primary sector (which includes agriculture, livestock and forestry) and the agricultural industries, with 6% and 5% of GDP, respectively. Other sectors such as “Transportation, Storage and Communications” are also closely linked to the development and growth of the agricultural and agroindustrial sectors in the country.<\/p>\n

Foreign Investment <\/strong><\/h3>\n

The escalation in international commodity prices over the last decade, combined with a favorable business environment and Uruguay’s outstanding comparative advantage in the production of land-intensive products, has had a significant effect on attracting Foreign Direct Investment (FDI) to Uruguay’s agricultural and agro-industrial sector.<\/p>\n

The agricultural sector has been the main beneficiary of these investments, especially in the integration of technology in cereal production. Argentina’s companies have played a crucial role in this area. Additionally, some of the world’s largest grain traders, such as ADM, Bunge, Cargill, Louis Dreyfus and COFCO, have established operations in Uruguay.<\/p>\n

Value Added<\/strong><\/h3>\n

The relevance of the agricultural sector in Uruguay is so significant that, beyond the impressive data reported by the BCU and the Mercosur-FAO Network, it contributes considerably to the value added of the economy and acts as an intermediate good, which justifies its analysis in a broader context, valuing its entire production chain.<\/p>\n

Representing approximately 82% of the country’s exports of goods -a figure that has grown year after year-, the agricultural sector and agroindustrial chains have been key to the fourfold increase in the per capita income of the Uruguayan population. This growth has generated an expansive impact that has greatly benefited the food industry and primary activities, creating the most significant multiplier effect in Uruguay’s economy.<\/p>\n

The sector also demonstrates strong forward production linkages, especially in the agro-industrial sphere, which is predominantly export-oriented. In fact, indirectly, this sector exports a higher domestic value added compared to other manufactures. Any development policy applied to this sector has a broader scope and a greater multiplier effect in terms of production, income and employment than similar policies in other sectors.<\/p>\n

Cont\u00e1ctanos para m\u00e1s informaci\u00f3n<\/span><\/a><\/p>\n

5 reasons to invest in agribusiness in Uruguay<\/h2>\n

The importance of the agricultural sector in Uruguay is also reflected in data such as the annual production of approximately 550,000 tons of beef, of which 180,000 tons are for domestic consumption and 370,000 tons for export.<\/p>\n

In addition, these more than three and a half tons of meat are distributed to more than 100 countries, constituting a quarter of the country’s total exports of goods.<\/p>\n

To achieve these results, Uruguay has implemented advanced information systems for the livestock sector, standing out worldwide. This includes full traceability of cattle, allowing the registration and identification of 100% of the country’s cattle inventory, and the Meat Industry Electronic Information System in slaughterhouses. The latter, through the use of digital scales and other devices, facilitates the recording and sending of relevant information to the National Meat Institute (INAC) directly from the processing plants.<\/p>\n

The commitment to new technologies is facilitating a deeper understanding of the natural cycles of the country’s ecosystems, in addition to identifying more effective and appropriate ways to use these resources.<\/p>\n