Added value in production is the key factor for exporting

Metalúrgica JHartwich, located in the western region of Uruguay in the city of Young, was founded in the mid-1960s with a focus on manufacturing agricultural and forestry machinery. Today, we have achieved market diversification, covering the entire country through dealerships and maintaining a strong presence in 17 countries across the Americas, Oceania, and Africa.

Our company’s export journey began somewhat by chance in 2006. For several years, we had been manufacturing forestry machinery, and when a contact from Argentina came to Uruguay to learn about UPM’s operations, they discovered our equipment. Eventually, they purchased three machines from us, marking our first export.

What took off immediately was word-of-mouth. In 2009, we closed new sales with a distributor in Entre Ríos, Argentina, and in 2010, through a contact who had relocated to work in Mozambique, we completed our first exports of forestry machinery to Africa. This marked the beginning of an active trade relationship with the continent, which enabled further growth and development opportunities. A similar case happened with Colombia: a South African technician who had lived in Uruguay for several years moved to Colombia in 2012 and requested machinery to bring there.

At the time, we were fortunate to be working in the forestry sector, which has been a leader in Uruguay for several years—especially in silviculture. Manufacturing equipment for this industry made it easier for us to venture abroad.

Building on this competitive advantage and leveraging our contacts, we expanded our exports through 2016. From then on, we made a decision to become more organized and work with a specific focus on international sales. We began participating more actively in trade fairs, such as the Argentina Forestry Fair, where our early appearances were modest, but by 2017 we had a more prominent stand. In 2018, we also had a presence at Expoforest Brazil, one of the world’s leading forestry events.

Throughout this process, we’ve learned which markets are most important for our industry. Today, in the product segment we manufacture, Brazil is the most significant market, as it is the world’s top pulp producer and has a production model very similar to Uruguay’s—one that is expected to grow in the future.

With higher labor costs than in Asia and more labor-intensive processes than in developed countries, Latin America has been pushed to develop mechanization and technology. We’ve been part of that transformation.

In Uruguay, manufacturers are few and small, but we are strong in specific niches within a competitive market and in the products we make. This is because Uruguay competes with machinery from all over the world that enters the country duty-free. Therefore, we must be competitive—whether in cost, performance, or the technology we provide.

The joint participation of companies in international business matchmaking events, organized by institutions like Uruguay XXI, offers great advantages over missions carried out individually. Undoubtedly, the reception and attention are of a different caliber, and it provides significant support to exporters—even in cases where no immediate deals are closed.

Key factors for entering a new market and sustaining it over time:

The first step is to study the potential of the target market, not just in terms of the business volume one aims to achieve, but also to understand the competitive landscape and assess how one’s products compare to those already in the local market.

For example, if the goal is to enter Argentina as a seeder manufacturer, I’d say it’s a large but challenging market, with many local manufacturers, strong development, government subsidies, and non-tariff barriers for foreign companies. However, when entering Argentina with products that are not locally produced, the advantage becomes clear. In Uruguay’s case, proximity, shared language, and the ease of building trust-based relationships are major advantages.

Business volume is often not the most relevant factor. For instance, the top-selling products in Argentina are tractors, harvesters, seeders, and sprayers. While I could try to sell these there, it would be very difficult because they are already manufactured locally. The same goes for Brazil: entering such an aggressive market with strong local manufacturers makes it very difficult for foreign-made products to gain a foothold.

What’s important is to enter with niche products that stand out—whether due to technological advantages or specific performance features. For Uruguay, competing on price alone is extremely difficult.

Carlos Hartwich
Director of Metalúrgica JHartwich