Alvaro Noboa Businessman: Opening new markets in the USA and Europe
Alvaro Noboa Travels the World Opening new Businesses
Official Press Release
Ecuadorians, I have resolved to travel throughout the world in order to open markets for Ecuador, thereby ensuring our products sell in greater numbers – whether it be bananas, coffee, shrimp, plantains, among others – in order to generate employment in Ecuador, in view of the crisis we are going through and which we should overcome through productive work. Which would in turn, augment our presence and increase the sales or our products of incomparable quality and national pride.
I have wanted to knock on the doors of the most important businessmen in the world; today I am in England where there are people who require Ecuadorian food, and for that reason I have recognized the commitment of my country, and my businesses, of exporting those products to these nations.
Eastern Europe will become a big client for Ecuador. That will generate work for the people of Eastern Ecuador, for the people who produce and export vegetables, flowers and crafts in the Ecuadorian sierra, and also for the coastal people from Esmeraldas, Manabí, Los Ríos, El Oro, Guayas and Santa Elena, who produce fruit, rice, tuna, shrimp, and all kinds of foods.
This is what I am doing today, conquering the world of business, so that Ecuadorians can produce for the whole world and have more jobs and better compensation every day.
Alvaro Noboa: Opening new markets in the USA and Europe
As a businessman, what is your reading of the crisis the country is going through?
There are a number of reasons. The government’s economic policy has resulted in Ecuador experiencing the worst crisis in recent times and has caused the number of unemployed to rise. The policy implemented by the government goes against commercial development, causing both nationals, as well as foreigners, to go on the defensive and instead of investing in Ecuador, they are leaving the country. Many businesses are leaving for other countries, like Peru, Colombia, etc., and others are simply keeping their money in savings. There are laws that allow taxes to be increased causing more problems every day of all kinds: in labor, in taxes, in export regulations. All of these sums result in Ecuador being in a retrocessive state. This negative growth would be even worse if we weren’t receiving the good price for oil that we are getting. The price of oil is softening the fall that we are going through, but there is undoubtedly a fall, and I believe all of us Ecuadorians are feeling it, whether it is as consumers because of the prices we are seeing, or as businessmen who are becoming tired, or just as normal people, like the workers who, everyday, have fewer jobs.
The external crisis, which has also affected Ecuador, is of a financial-lending kind, which, as throughout the world there was a surplus of money, and including oil money, there was enough financial support for people to buy properties, many of whom didn’t even have a down payment, even unemployed people who didn’t have monthly incomes bought properties. What did this bring about? It caused the unemployed, and the newly unemployed to leave off making monthly mortgage payments, thus those loans were declared overdue, and thus with overdue loans, the banks suffered great losses which began to sweep through international banking, because this occurred worldwide. As the international bank went under, an international rescue was required to cushion the collapse of international finance. But that is not to say that international banking is out of danger. The bank is in intensive therapy, as they say in medical terms. International banking has been hit terribly hard and, I’ve never been wrong in the last thirty or forty years that I have been working, many productive years – ten or fifteen – will have to go by before the losses generated in the last three years can be recuperated. It would be silly to think that a loss this big will be recuperated in one or two years. It has caused the banks hit by the lending crisis to stop lending and in not lending money, it’s no longer a home-buying crisis, but rather a general one.
Please remember that I was President of the Monetary Institute; that I brought Ecuador’s reserves to almost 2 billion, and for that reason I lowered interest rates. Therefore, I have proof that I know very well what I am talking about in regard to these issues. Because of the global crisis, private enterprise and the banks have reduced their production costs, and that has caused unemployment. It has meant that throughout the world there is unemployment and because of unemployment, there is no consumption. And because of lower consumption, there is a fall in global demand for products.
How should, or how can, private enterprise regenerate jobs?
Businesses should carry out a series of corrections, like my businesses have done and is aimed at not causing still greater unemployment than there already is, because if we cause more unemployment, there will be even fewer consumers. For that reason, it is better to not lay off people, unless the business really doesn’t have any other alternative and is declared bankrupt. Until then, the business should try to keep people on. Second, reduce any unnecessary cost. Today excessive costs are going to cause Ecuadorian products to lack competitiveness, therefore we should stop any excess costs, whether in human resources or in business costs.
Third, and most important, look for new markets that can increase demand for our products. Our current markets are Western Europe and the United States, and besides maintaining those markets, especially the United States which is Ecuador’s biggest buyer, we should open markets in Eastern Europe. Today, Eastern Europe is one nation, like the former Soviet Union, like the Ukraine, Poland, Macedonia, Hungary, Rumania, the former Yugoslavia, Slovenia, and Croatia, all of those newly independent republics – there is Turkey, and the Black Sea zone. The populations of those countries reach 500 million people, and besides them we need to add China, which is on the opposite pole from the current economy, but nevertheless, is growing at a rate of 7.5% while in Ecuador and the rest of the world are seeing a downturn. Therefore, we are approaching all of these markets so that those people, who wish to eat better, but can’t because of the crisis, will consume when the crisis is over. I estimate that that population will begin to consume several times more than they are consuming at the moment, and perhaps much more, and that will create another opportunity for Ecuador to export our bananas, our coffee, pineapples, mangos, plantains, flowers, etc., for all of our products. It is important for us as producers to be there in those countries which are entering into those markets and taking advantage of food consumption. For that reason, I am travelling throughout the world to open new markets and that will benefit Ecuador as it will generate jobs and our products will be in those markets, thanks to the exporting businesses that we are.
I am a firm believer in free enterprise and we must follow the example of those countries which have buried the communism of the past and have assumed the challenge of developing their economies, their agriculture with all the support of their governments, given that many of them do not impose taxes.
Currently we have a socialist state that is not thinking about openings, or in free enterprise. What should businesses do in order to make it understand that this is the way to generate employment and economic growth?
Regrettably, that is the tendency that has been maintained in the last 10 years.
I think that the only way that the government will understand is through secondhand experience. For example, China, despite the global crisis, continues to grow, while, on the other hand, Ecuador’s economy, despite getting a high price for oil, continues to decline. Therefore, there is something wrong in Ecuador’s economic policy and that is the responsibility of its leaders, or those who are responsible for those areas. They should realize that the state-centered, anti-enterprise, communist scheme has failed throughout the world, and is going to lead to greater unemployment, to a worsening recession, while the free enterprise scheme of development, of supporting investors, has resulted like it has resulted in China.
The government is applying laws that are limiting the private sector, so that it does not continue to grow. What should be done?
We are living in a democracy and, via the Assembly and the media, we should make our opinion known. I believe that it is an opportunity for me to call from Europe to Ecuador, to tell of my experience as a businessman, and to inform the country of what is happening in the world, and what is happening in Ecuador. What is the cause of the crisis? The cause of the crisis is internal and external. It is important that the people of Ecuador become aware of what is causes the damage.
The President, via his tax reform, in one way or another, is pursuing exporters with more taxes and more barriers. How can we stimulate businesses who want to diversify our markets?
I think there is something even more serious happening in Ecuador and which the banana-producing sector is suffering. In the banana sector of formally-recognized businesses like Noboa, Dole, Del Monte are paying official prices, but the other, non-formal businesses, which represent more than half of the country’s exports, are paying far less than the official price for a crate of bananas. While we are paying the official price for a crate of bananas, and we are controlled, the unofficial businesses are paying far less, and nothing is said, and that allows the international market to be damaged. Because in those countries where our products are bought, they sell at prices far lower than ours, the official exporters, and they cause damage to the international price for a crate of bananas, because in the supermarkets where we are selling our products, they ask me, “Mr Noboa, why are you selling us a crate of bananas at a price far greater than other Ecuadorian exporters?” And I say because they pay far less to the producer. “But that’s not my problem. If you want to sell your product here, lower the price.” Thus, in that way the unofficial exporters cause damage to the market – a loss to both the exporter and the producer.
How do you feel, being Ecuadorian, about not being able to invest in your own country, while in other countries you are made welcome, offered juridical protection and no taxes? I feel terribly demotivated because in Ecuador, where we have been number one in most of our products, we are the most persecuted, the most harassed, from different angles, and were, furthermore, I am given a bad press in the public eye. They are always saying that I am a tax evader, although I am the biggest taxpayer in Ecuador, and the numbers are there to prove it, no one has to do anything more than see and add up all what my businesses pay, what I pay as a individual taxpayer, and they will see that I am the biggest taxpayer in the country.
In regards to labor, we have asked for changes given that there were sailors, who were protected in claims, when they hadn’t even worked for us.
My businesses and I constantly receive international recognition for our excellent commercial relationships, and for the very highest quality of our Ecuadorian products. The Canadian government recognized the Molinera Industry for having bought wheat for over 45 years. The Alamos Hacienda received recognition for being the farm with the best treatment, both in terms of product in terms of quality, as with regards to employees who benefit today from a school, medical attention, company store and, of course, payment as stipulated by law.
Finally, despite all the problems that you and your companies face, are you going to continue in politics, and attempt to solve these problems? Or are you completely disillusioned by politics?
I have said, and I will always continue to say: while there is poverty in Ecuador, I will continue, from all angles, including the political one, to try to bring poverty to an end. I take politics as a civic duty to try to achieve my final goal, which is to get Ecuador out of poverty. How many times have the convinced the Ecuadorian people to vote wrongly, promising them pie in the sky?!
The association of Hospital Volunteers of Guayas ASVOLH, Institution that on the month of October celebrates its 29 years of uninterrupted services to patients of the hospital community of the Honorable Junta de Beneficencia of Guayaquil on the General Assembly Special Anniversary, on the 14 of October it made presented a commemorative plaque to Industrial Molinera C.A. due to its valuable support given to such institution.
During a ceremony performed at the Hilton Colon Hotel in the City of Guayaquil, the World Confederation of Businesses, with headquarters in Houston, United States, presented the Bizz Awards, to 56 Ecuadorian Companies, Industrial Molinera C.A. earned its recognition.