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Fans of the technique of picking markets to enter by GDP growth will want to include Peru on their bucket list. In 2014 the economy should grow about 6 percent, a percentage lower than average growth over the past 5 years. While there is still much poverty among the country’s population of 30 million, President Ollanta Humala has delivered sustained economic growth and rising living standards. The poverty rate was a bit over 40 percent in 2007, dropping to 25 percent in 2012 and probably even lower now.
With more even distribution of income and fatigued from internal strife that claimed more than 25,000 lives, Shining Path, a Maoist guerrilla insurgency, is a shadow of its former self. With the arrest or death of most of its leaders, the cocaine trade has diminished as a means to support the insurgency. Today, Peru like its neighbor Colombia is safe, stable, and growing.
And so is trade between the U.S. and Peru. 24.8 percent of Peru’s imports come from the U.S. versus 13.9 from China. Brazil, a close neighbor, is a distant 3rd with 6.7 percent. China takes15.5 percent of Peru’s exports, while the U.S. consumes 12.8 percent. Peru’s main exports are copper, gold, zinc, and fish meal.
The U.S. has a free trade agreement with Peru wherein approximately 80 percent of U.S. industrial and consumer goods enter Peru duty-free. However, a value added tax of 18 percent is applied to virtually all goods sold in the country resulting in relatively higher prices for many goods in comparison to those prevailing in the U.S. But the 5-15 percent saved on duties helps make affordable many products from the U.S.
The best prospects for U.S. exports of non-agricultural products to Peru include the these sectors:
• Mining Industry Equipment
• Construction Equipment
• Telecommunications
In the Hydroelectric/Energy Industry there is a huge potential for the development of hydroelectric projects in Peru. In the central and southern parts of the country, the electrical system is operating at its limit, potentially affecting mining projects that require the use of electrical power. In some instances, mining companies began to build their own sources of electrical power. Minera Volcan, for example, has built a small hydroelectric plant of 13 megawatts and has plans to build four more to reach 250 megawatts. Southern Copper also produces its own energy supply in its mines in southern Peru. According to some experts, Peru has the capacity to produce over 60,000 megawatts of exclusively hydro-electrical power.
The fish and fish meal exports declined slightly due decreased demand in the U.S. and Europe.
However, stocks are abundant, diverse and underutilized, making this sector ripe for future growth. Ceviche, assorted raw fish marinated in lime juice, is a local delicacy that’s now enjoyed throughout the world.
The strong growth in the retail industry has contributed to increased consumption of consumer goods. The expansion of supermarkets, strip malls, and recreation centers in Lima and in the provinces is an indication of the growing purchasing power of the population and the increasing popularity of buying at chain retail centers.
Lima and rest
The population of Peru is highly centralized, with 30 percent of all inhabitants living in the capital city of Lima and 50 percent of GDP generated in and around the capital. As a result, a large portion of the sales activities of U.S. firms occurs in Lima. Sales opportunities do exist in other major population centers such as Arequipa, Chiclayo, and Trujillo. This could be a consideration for a U.S. company’s overall marketing strategy. Representatives in Lima typically have sales agents in these cities, covering sales opportunities in the provinces.
The most common method of distribution is the appointment of a qualified representative. Appointing an agent or distributor is advisable for companies seeking to develop a market on a sustained basis.
The Government of Peru has embarked upon an initiative to decentralize some elements of government authority and decision-making, including implementation of spending programs utilizing the “canon,” a tax imposed on extractive industries. This increase in regional authority is an important consideration when contemplating a local representative outside of Lima. Decentralization of government budgeting and spending authority can also make completing sales more challenging, especially in municipalities.
Similar to other countries in the region, great stock is placed on personal relationships. Peru is not a country where you can be successful “mailing it in.” If you are a U.S. businessperson, a good resource is the U.S. Commercial Service at the Embassy in Lima. They will locate and check the bona fides of prospective distributors, agents and direct buyers. If a good match is found, it may require you to go down there to meet, greet and negotiate. While there, Machu Pichu, the aforementioned ceviche, and pisco sours (made of pisco liquor, key lime and egg white) beckon. Tough job, but somebody’s got to do it.
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| PCMF202321.5B bearing | 20 | 23 | 21.5 |
| PCMF202316.5B bearing | 20 | 23 | 16.5 |