II. Leading Trade Prospects for U.S. Business BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO GUATEMALA (US$ millions) A. Rank: 1 B. Name of Sector: Computers and Peripherals C. ITA or PS&D Code: CPT 1993 1994 1995 (Est) (Proj) (Proj) D. Total Market Size 40.3 50.4 63.0 E. Total Local Production -- -- -- F. Total Exports -- -- -- G. Total Imports 40.3 50.4 63.0 H. Total Imports from U.S. 38.2 47.8 60.0 I. Exchange Rate: U.S.D. used to report statistics Comments: Future demand for computers and peripherals is excellent. Major competitors are Korea, Taiwan and Japan. Exports from the United States increased by 43 per cent 1993. No market saturation is anticipated in the foreseeable future. Guatemala changed from the BT nomenclature to the HS nomenclature in March 1993 and has not published final statistics for 1993. A 25 % two-year growth rate is estimated for this sector List of the most promising sub-sectors within the sector, along with estimated 1995 total market size of each subsector (USD millions): 84733 Parts and accessories for ADP machines and units 19.1 84712 Digital adp machines with cpu and input/output unit, with or without color 16.8 A. Rank: 2 B. Name of Sector: Hotel & Restaurant Equipment C. ITA or PS$D Code: HTL 1993 1994 1995 (Est) (Proj) (Proj) D. Total Market Size: 22.0 26.7 33.9 E. Total Local Production: 8.0 9.6 12.0 F. Total Exports: 4.5 5.1 5.8 G. Total Imports: 8.5 22.2 27.7 H. Total Imports from U.S.: 10.8 12.9 16.1 I. Exchange Rate: 5.66 5.8 6.0 Comments: Hotel and restaurant equipment and supplies are in great demand. New franchises in the restaurant industry are constantly being opened. Also small fast food restaurants are opened all through Guatemala. Some new hotels and apart-hotels are being built. The United States is the leader in this industry with a market share of 63.6 percent. It's closest competitor is Mexico with 4.6 percent of the market, followed by Brazil with 3.9 percent. A two-year growth rate for hotel and restaurant equipment is projected to the between 20-25 percent. The most promising sub-sectors within this industry sector are: 8418.6990 Refrigerators, coolers and cold storage rooms and display windows. 8417.8000 Bakery and pizza machines and ovens 8419.8100 Cooking stoves, ranges and ovens 8509.8000 Other electric apparatus 8516.4000 Electric laundry pressing machines 8516.5000 Microwave ovens 8516.6000 Other electric grills, barbecues, warmers, heaters A. Rank: 3 B. Name of Sector: Food Processing & Packaging Equipment C. ITA or PS$D Code: FPP 1993 1994 1995 (Est) (Proj) (Proj) D. Total Market Size: 71.3 85.8 103.0 E. Total Local Production: 14.2 17.0 20.4 F. Total Exports: 5.1 5.8 6.9 G. Total Imports: 62.2 74.6 89.5 H. Total Imports from U.S.: 37.5 45.0 56.2 I. Exchange Rate: 5.6 5.8 6.0 Comments: The market for Food Processing and Packaging Equipment industries has increased in Guatemala over the last years. The market demand for this equipment totaled US$ 70.6 million in 1992 and projections for 1993 expect the market to grow to a total of US$ 84.7. A 10% two-year growth rate is projected for this sector. The United States is the major supplier of food processing and packaging machinery with a 48.5 percent of the market share in 1992 and is expected to be 54.2 percent in 1993. The United States' major competitors are Italy with a 19.5%; Brazil with an 8%; Germany with a 7.9%; U.K. with a 5% and Switzerland with a 3.4%. The most promising sub-sectors are: 8417.2000 Bakery ovens and equipment, dough mixers 8419.4000 Distilling and rectifying plants for food and beverage 8422.2000 Parts for bottle cleaning, drying, bottling, filling, sealing equipment, labeling 8422.3090 Machines for aerating beverages 8438.1000 Bakery machines & machines for the preparation of macaroni, spaghetti, etc. 8438.3000 Machines for sugar preparation 8438.4000 Brewery machinery 8438.5000 meat and poultry machines, cutters, slicers 8438.8000 Industrial preparation machinery for the manufacture of food and beverages, fryers refrigerators and freezing equipment Food manufacturers are buying both new and used machinery. A. Rank: 4 B. Name of Sector: Agricultural Machinery and Equipment C. ITA or PS$D Code: AGM 1993 1994 1995 (Est) (Proj) (Proj) D. Total Market Size: 69.1 82.9 99.3 E. Total Local Production: 23.7 28.4 34.1 F. Total Exports: 1.1 1.3 1.7 G. Total Imports: 46.5 55.8 6.9 H. Total Imports from U.S.: 25.4 30.5 36.6 I. Exchange Rate: 5.66 5.8 6.0 Comments: Imports of agricultural machinery did not increase during 1993 because of the low international prices for coffee and sugar. However projections for growth during the next few years look very promising, as sugar cane planting is increasing as well as non- traditional products such as vegetables, fruit and ornamental plants. It is expected that the growth rate over the next two years will range between 15 and 20%. The agricultural sector employs approximately two-thirds of the labor force and contributes to 24.8 percent of the gross national product, and provides 67 percent of export earnings. The number one export earner -coffee- is undergoing a reduction in its production caused by the low international prices. Although coffee prices have increased this year, not all coffee producers are making the necessary investments. However, sugar production is growing taking over some cotton, pasture and other crop lands. Other potentials growth sectors in the market are cardamon, bananas, sesame seed, cotton, tobacco and soybeans. The sector's best prospects are: 8708.90010 Parts and accessories for tractors 8701.90100 Agricultural tractors 8431.39000 Parts and accessories for conveyors and loaders 8201.40000 Hand tools 8716.390010 Trailers and loaders 8436.80000 Poultry machine and equipment ? Land preparing machinery 8437.100000 Machinery to sort, grade and clean seed, grain and vegetables ? New and used machinery. A. Rank: 5 B. Name of Sector: Air Conditioning and Refrigeration Equipment C. ITA or PS&D Code: ACR 1993 1994 1995 (Est) (Proj) (Proj) D. Total Market Size 5.4 6.5 7.8 E. Total Local Production -- -- -- F. Total Exports -- -- -- G. Total Imports 5.4 6.5 7.8 H. Total Imports from U.S. 3.6 4.3 5.2 I. Exchange Rate: U.S.D. used to report statistics Comments: It is expected that with the building boom now taking place and with the production and exportation of non traditional perishable products, this market will increase by 20 percent during the next three years. Main competitors are Mexico and Brazil. Importers show great satisfaction with both the quality and pricing of U.S. products. 1993, 1994 and 1995 import figures are estimates. Guatemala changed from the BT nomenclature to the HS nomenclature in March 1993 and has not published final statistics for 1993. An estimated 20% two-year growth is projected for this sector. List of the most promising sub-sectors within the sector, along with estimated 1994 total market size of each subsector (USD millions): 84143 Air compressors and condensers 1.9 84186 Refrigeration equipment and parts 2.9 85151 Air conditioning machinery and parts 3.0 A. Rank: 6 B. Name of Sector: Tools, Hand and Power C. ITA or PS&D Code: TLS 1993 1994 1995 (Est) (Proj) (Proj) D. Total Market Size 15.9 17.4 19.0 E. Total Local Production 1.5 1.6 1.7 F. Total Exports .5 .6 .7 G. Total Imports 14.9 6.4 18.0 H. Total Imports from U.S. 6.1 6.7 7.4 I. Exchange Rate: U.S.D. used to report statistics Comments: The outlook for market demand for hand and power tools is good. The increase in construction now taking place includes the building of high rise buildings, including new hotels, office buildings, hospitals and luxury apartments. Major competitors are China (Taiwan), Germany and Peoples' Republic of China. 1993, 1994 and 1995 import figures are estimates. Guatemala changed from the BT nomenclature to the HS nomenclature in March 1993 and has not published final statistics for 1993. A 10% two-year growth rate is projected for this sector. List of the most promising sub-sectors within the sector, along with estimated 1995 total market size of each subsector (USD millions): 82031 files, rasps, pliers (including cutting pliers) 4.5 82032 pincers, tweezers, metal cutting shears 82033 pipe cutters, bolt cutters, perforating punches and 82034 similar handtools 85081 Electro-mechanical tools for working in the hand 85082 with self-contained electric motor 2.8 82014 Axes, bill hooks, and similar hewing tools and parts 1.7 A. Rank: 7 B. Name of Sector: Security & Safety Equipment C. ITA or PS$D Code: SEC 1993 1994 1995 (Est) (Proj) (Proj) D. Total Market Size 3.3 3.6 3.9 E. Total Local Production: .1 .1 .2 F. Total Exports: .1 .1 .2 G. Total Imports: 3.3 3.6 3.9 H. Total Imports from U.S.: 1.5 1.6 1.8 I. Exchange Rate: 6 5.8 6.0 Comments: The import of security and safety equipment is slowly increasing. Most of commercial and industrial end-users prefer to have, in some cases, relatively inexpensive armored guards instead of installing expensive and sophisticated equipment. A 10 percent growth increase is expected for the following two years. The main users of safety and security equipment are industrial and commercial concerns and banks. Banks have increased the number of their branches, not only within the capital city but also in the main principal cities within the country. Also car alarm systems will show increases during the next years. This increase is foreseen in view of car theft reports and robberies in industries, banks and homes. The most important supplier of security and safety equipment is the U.S. with a 44.5 percent of the market, followed by Italy with a 12 percent; Taiwan with a 9.2 percent and Germany with an 8.9 percent. Best sales prospects in this industry are: 8301.1000 Padlocks of base metal 8301.2000 Base metal locks 8301.6000 Parts for locks 8303.0000 Burglar alarms, safe boxes and vault doors 8526.9200 Radio Remote control apparatus 8531.1000 Smoke detectors 8531.8000 Automobile alarm devices A. Rank: 8 B. Name of Sector: Automotive Parts & Service Equipment C. ITA or PS&D Code: TLS 1993 1994 1995 (Est) (Proj) (Proj) D. Total Market Size 48.8 53.0 57.5 E. Total Local Production 13.0 15.5 18.1 F. Total Exports .4 .5 .6 G. Total Imports 36.2 38.0 40.0 H. Total Imports from U.S. 14.0 14.7 15.4 I. Exchange Rate: U.S.D. used to report statistics Comments: Imports of automotive parts, accessories and repair equipment have been growing steadily for the past four years. Main competitors are Japan, Germany, and Korea which offer good quality and service plus competitive prices. Figures for 1993, 1994 and 1995 imports are estimates. Guatemala changed from the BT nomenclature to the HS nomenclature in March 1993 and has not published final statistics for 1993. A 8 percent two-year growth rate is estimated for this sector. The most promising sub-sectors within the sector, along with estimated 1995 total market size of each subsector (USD millions) are: 84831 Transmission shafts, (including camshafts 6.2 84832 and cranks 84833/84834 87081 Parts and accessories of motor vehicles 35.1 87082 (including radiators, mufflers, exhaust 87083 pipes, steering wheels, steering boxes, 87084 shock absorbers, axles, road wheels, gear wheels, gear boxes, etc.) 87085/87086/86087/08088/87089/87091/87092/7093/87094/87099