Foreign investment in Ecuador grew 6% in 2014 while in Latin America it fell 16%

Posted on May 27, 2015 • Filed under: Economy, Ecuador reported that Foreign Direct Investment (FDI) grew 6% in Ecuador in 2014 in comparison to 2013, amounting to 774 million dollars, a tendency contrary to what was evidenced in the region with a 16% fall, according to a report of the Economic Commission for Latin America and the Caribbean (Cepal for its acronym in Spanish) published Wednesday in Chile.

FDI in the region increased from 189,951 million dollars in 2013 to 158,803 last year. “Such decrease is due to the reduction in basic product prices (export products) and the economic slowdown in the region,” Cepal states in a document.

“This result reverts the growing tendency noted in the last decade- with falls in 2006 and 2009- since a new drop is planned for this year,” the institution indicates in the document.


When checking flows of the greater economies in the region, we can see drops in every case. Brazil registers a 2% reduction, Mexico 49% and Argentina 41%. The greater reduction is registered in Venezuela (-88) where FDI decreased from 2,680 million dollars in 2013 to 320 million in 2014. Meanwhile, the greatest growth is registered in Paraguay (230%), increasing from 72 million dollars to 236 million.

In Ecuador’s case, figures show a 6% increase, from 731 million dollars in 2013 to 774 million dollars in 2014, “a bit more than two thirds (…) in the natural resources sector,” in which it rose from 279 to 528 million, according to the report.

Investments coming from abroad were also evidenced in sectors like manufacture and services, though amounts in these sectors decreased compared to last year. In the first case, it went from 138 to 109 million dollars and represented 14% of the total and in the second case they went from 314 to 137 million with 18% participation when in 2013 it was 43%.

“Nowadays, oil exploration is successfully increasing in Ecuador. In October, many contracts were awarded to international companies in order to work with the State company Petroamazonas in new oil reserves. The government estimates that during the following five years, about 2,100 million dollars will be invested in such explorations,” Cepal’s report reads.

Moreover, it points out that the Ecuadorian food and beverage market “has managed to attract the interest of many foreign companies. The dairy product company Holding Tonicorp was wholly acquired by Mexican Arca Continental, in an agreement in which US Coca Cola Company also intervened.”

Additionally, in 2014 Coca-Cola announced it planned to invest up to 1,000 million dollars in Ecuador in the coming five years.

Meanwhile, Arca Continental announced its intention to invest 80 million dollars more in a new plant.

Cepal also registers “two great purchases of cement works” in 2014. Peruvian Cement Andean Union (Unacem) bought a plant in Ecuador for 517 million dollars and the also Peruvian Gloria group bought another one for 300 million dollars.

Regarding the financial sector, it highlights Panama’s Promerical Financial Corporation transaction, which bought 56% of the Production Bank for 130 million dollars, according to information published by the UN regional organization. Read Article

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