Ecuador - Food Processing and Packaging EquipmentEcuador - Food Processing Equipment

Overview

Imports dominate most of the machinery and supplies needed for the food processing and packaging industry. Market growth is largely tied to investment in technology and the expansion strategies of companies.

In the last few years, the Government of Ecuador has been pursuing a policy of selective import substitution in an effort to shift from being largely dependent on oil and agricultural exports to exporting high value-added products. The government calls this policy a shift in the “production matrix.” The government is promoting the development of the local industry. For that reason, the domestic and export market for processed goods is considerable. In order to meet this demand, there is a need for machinery, supplies, and technology from abroad.

The U.S. continues to be the largest supplier of food processing and packaging equipment to Ecuador with 18 percent of imports. Other countries that sell to Ecuador include: Germany (14 percent), Italy (13 percent), and China (12 percent).

Tariffs for processing and packaging equipment range from 0 to 5 percent. With few exceptions (like labeling and filling machines), most equipment is subject to a 12 percent value added tax (VAT) and 0.5 percent Children’s Tax.  (As part of a tax package passed after the April 2016 earthquake, Ecuador has temporarily raised the VAT to 14 percent for one year. The increased VAT is scheduled to expire on May 31, 2017.)

Companies in this industry are fully aware of the need to remain competitive with up-to-date technology, as well as highly efficient production processes.
 

Sub-Sector Best Prospects

• Packaging or wrapping machinery,

• Filling, sealing, and capping machines,

• Cleaning and sorting machinery,

• Dairy production equipment,

• Bottling services (both alcoholic and non-alcoholic),

• Brewery equipment,

• Mixing, grading, and filtering apparatus,

• Equipment to process and pack processed foods,

• Horticulture packaging equipment,

• Printing and labeling equipment.
   

Opportunities

The food processing industry is not yet sufficiently developed to satisfy local demand, let alone increase exports. The sector is highly diversified. Besides importing processing and packaging machinery, Ecuador also imports the majority of the raw materials needed for packaging such as cardboard boxes, plastic wrap, plastic bags, and labels. 
 
The primary end-users for packaging machinery are:

• Food and agricultural industries, including supermarkets,

• Meat packers,

• Fruit processors,

• Raw fruit exporters,

• Banana, shrimp and flower exporters,

• Pharmaceutical companies, and

• Packaging processors.

Market opportunities for U.S. manufacturers also vary broadly, determined by equipment size and production capacity.
 

Web Resources

United States International Trade Commission (http://www.usitc.gov/)
Central Bank of Ecuador (http://www.bce.fin.ec/)
Pudeleco Legislacion Economica (www.pudeleco.com/site/quienes-somos)