Industry accounts for a fifth of Ecuador’s gross domestic product and employs 15 percent of the laborforce.
The main industries are oil-refining, petrochemicals, textiles, food-processing, fish canning and wood products such as paper. However, it is often difficult to exploit the country’s resources, given the remote location and poor infrastructure.
The minister of energy and mines, Pablo Teran Ribadeneira, says: “Oil is the most important res-ource in this country, but the problem we have had is lack of access.”

A new pipeline, called the OCP, will double throughput capacity to 400,000 barrels a day (bpd) later this year. The minister estimates that the pipeline and other projects will involve an investment of about $2.5 billion.
“We have plans to access other substantial oil resources that have not been exploited so far,” says Mr Teran Ribadeneira. “These plans are going to revolutionize the economy.”
While Ecuador remains heavily dependent on oil exports, the country has had some success in diversifying its manufacturing base with the shift to a dollarized economy and the introduction of economic reforms to encourage growth in the private sector.

But, according to Juan Jose Anton, president of plastics manufacturer and distributor Pica, the potential for expansion for home-grown firms is limited by Ecuador’s small domestic market of 12 million people. “This country depends on exports,” he says.
Pica is opening a new plant. “We are going to continue improving our performance,” Mr Anton says. “Success depends on innovation – and that depends on investment.”
The rich fishing grounds of Ecuador’s Pacific waters are only now beginning to be exploited. Asiservy, for example, was set up only in 1997 to produce canned and frozen tuna for export.
Company president Gustavo Nuñez says: “Asiservy developed an in-depth study to determine the overall demand for tuna in the European and, especially, Spanish markets.

“This showed that the market was in deficit and that labor costs were high, which made it obligatory to import products in the short and medium term to satisfy demand.”
Mr Nuñez says Ecuador is the largest producer and exporter of canned tuna in Latin America. “There are many factors behind Ecuador’s success, including good fishing catches, excellent quality in canning and very competitive prices,” he adds.
La Fabril, a family-owned company has a wide range of interests based on packaging and processing. Products range from palm oil to fruit and a substitute for cocoa butter in the production of chocolate. The firm is Ecuador’s biggest exporter of white fish.

Executive president Carlos Gonzalez Artigas Diaz stresses the need to adopt technology to compete in the growing export markets, particularly in the palm oil business. “We are investing to increase productivity,” he says. “La Fabril will be very advanced technologically.”
The company has managed to double palm oil output over the last 10 years and has entered the Asian market. Mr Gonzalez sees strong growth prospects elsewhere, including Europe and the U.S.
“The U.S. is a virgin market that is opening its legislation little by little,” he says. “There have been restrictions because of health concerns, but I believe that by 2003 there will be completely free trade.”

The inspiration for Rodrigo Ribadeneira, who founded manufacturer Marathon Sports in 1981, stems from his early interests. “The first part of my life was dominated by my passion for sports and I’ve always been involved in the sporting world, especially basketball,” he explains. “I felt that I could start up a business in this country that was related to sport.”
The company had just six staff when it went into business – today it has 1,200, producing goods for a chain of 22 outlets and a total of 40 shops across the country. About 60 percent of the firm’s output is sold in the domestic market, with the rest for export, including sports clothes for major international brands.
The textiles industry offers scope for expansion, particularly as trade with the U.S. is opened up. New U.S.-Andean pact legislation is due to be passed soon.