Uruguay is an attractive investment destination for the food and ingredients industry.

Uruguay XXI will show at the Food Ingredients Europe in Germany why the country is a production, regional distribution, trading, and innovation hub for this industry.  
Publication date: 30/11/2023

Uruguay uniquely appeals as a regional platform for the food and ingredients industry. The competitiveness of its primary and primary processing chains, in addition to access to imported raw materials without paying tariffs and other tax incentives, its strategic location that offers access to an expanded market of 400 million people, and its economic and legal stability position it as a critical player in regional and global supply chains and as a trading or service center. 

These attributes are traditionally exploited by large companies such as U.S.-based PepsiCo, Switzerland’s Nestlé, and Denmark’s Lactosan, to name a few.

In this direction, the agency Uruguay XXI participates in a mission to Food Ingredients Europe (Germany), the world’s largest exhibition of food ingredients, additives, solutions, and packaging manufacturers for the food and beverage industry.

Food ingredients made in Uruguay

As part of the food industry, ingredients are intermediate products that arise after a first transformation of the raw material into a standardized product that is easy to incorporate into the formulation of different foods. They are essential since they provide specific characteristics to the final products, such as flavor, texture, color, preservation, and nutrition.

Uruguay offers excellent advantages for producing and exporting ingredients to the world. In addition to the abundance of land suitable for agriculture and livestock, the wide availability of primary products, and the Temporary Admission (TA) regime, which allows the import of inputs without paying taxes, there is ample access to regional and international markets, which facilitates trade and the expansion of companies in the region. The proximity to customers and the short delivery times facilitate the adaptation of products. 

The North American Pepsico, for example, installed in the free trade zone of Colonia, has had a marked growth in the production and export of beverage concentrate in the last decades. Its previous bet was in 2021, with an investment of USD 64 million to expand its production capacity. 

The dairy sector has its references in companies such as Conaprole, one of the largest dairy cooperatives in South America. The Argentine company Alimentos Fray Bentos exports 20,000 tons of dairy ingredients annually to the industry. 

Lactosan, of Danish origin, established in the country in the 1990s to be close to its customers and prospects in Latin American markets, to provide solutions in ingredients for the food industry, mainly cheese powder, explained its Sales and Marketing Manager, Fernanda Méndez.

“Uruguay is our site in the Americas because of its strengths in terms of political and economic stability, as well as its strategic geographic location - in the middle of a dairy basin - in terms of access to markets and raw materials,” she added.

On the other hand, coffee and cocoa exports are rising, in line with the country’s attributes as a regional food hub. Uruguay offers competitive advantages from the investment promotion and Temporary Admission regime that allows companies to set up, import raw materials, process them in the country, and then export them without paying import taxes. 

For example, the renowned Swiss global company Nestlé transformed the coffee industry in Uruguay using the Temporary Admission regime. It capitalized on the country’s strategic location and flexibility to develop its coffee for export business successfully. The company seeks to multiply the production capacity in the country by seven in a few years, expand the export volume, and target the Brazilian, Chilean, Argentinean, and Mexican markets. Find out here why Nestle chose Uruguay as a coffee hub.

Other examples of large foreign companies are the Swedish Danish food and beverage company Aarhuskarlshamn (AAK), located in the Zona Este Industrial Park, which specializes in the production and marketing of plant-based ingredients such as vegetable oils, fats, lecithin, and emulsifiers. 

Uruguay also produces meat ingredients, such as artificial casings, additives, preservatives, and flavors, and the Spanish multinational Viscofan, a leader in producing artificial guts, is taking advantage of the benefits of operating in Uruguay.

The French company Lesaffre produces and markets yeast, premixes, and other ingredients for the food industry. 

Thus, the combination of natural resources, efficiency in agricultural production, and capacity for technological innovation, together with its openness to trade, boosts Uruguay’s activity and strengthens its reputation as a reliable and competitive food supplier in the international market.