Environmental Technologies Industries
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Market Plans

Chile Environmental Export Market Plan
Executive Summary

With its strong economy and increased focus on environmental issues, Chile is a promising market for U.S. environmental technology exports. Severe environmental problems together with international pressure from trading partners have driven Chile’s recent efforts to strengthen its environmental regulations and programs. A comprehensive Environmental Framework Law was passed in 1994, and the accompanying regulations will stimulate the market for environmental technologies over the coming years.

Despite the country’s relatively small size, the overall market for environmental technologies and services is estimated at $740 million for 1998 and is expected to grow. The greatest opportunities are in the water sector. Over $1 billion in investments in water supply and sewer collection and treatment are planned for the 13 regional water companies through the year 2000. Much of this investment is focused on wastewater treatment in the greater Santiago metropolitan region. In 1997, after two years of debate, the Chilean Congress passed legislation requiring that all of the nation’s water utilities be privatized over the next five years. This move is likely to open up the market and generate significant investment in the water sector. Companies with experience in water concessions are already positioning themselves to enter this market.

Severe air quality problems in urban areas are creating a significant demand for air pollution prevention and control technology. A recently approved decontamination plan for the Santiago metropolitan area will require public and private sector investments on the order of $180 million to meet the air quality goals established for 2005. Other regions, declared “saturated zones” for key air pollutants, are required to develop plans to meet ambient air quality standards. Although
solid and hazardous waste management is not a high priority in Chile, regulations for hazardous waste management are currently under review and, if passed, will foster the market for waste minimization, storage, transport, and disposal technologies.

Other key drivers for environmental improvements are the requirement for environmental impact assessments (EIAs) for all new projects and other voluntary measures such as ISO 14000. CONAMA (the National Environmental Commission) estimates that as many as 300 EIAs will be slated for 1998, creating demand for environmental consulting services. Mid- and large-sized companies are embracing environmental management systems, particularly ISO 14000, and will require technical assistance to design and implement these systems. Key industrial sectors include mining, fishmeal processing, petrochemicals, and forestry.

Chile’s strong and open economy is attractive for foreign investors and exporters of environmental technology. There are few barriers to doing business in Chile. Having a local presence, preferably through a local office or partner, will be advantageous for participating in infrastructure development projects and providing environmental services to both the government and the private sector. For technology vendors, finding a well-established local partner or representative will be important. U.S. products are highly regarded, and many of Chile’s regulations and standards are modeled on those of the United States, giving U.S. companies a competitive advantage in technology exports. In contrast to other emerging market countries, international donor funding does not play a large role in the development of environmental projects; however, financing is much more readily available than in other countries.

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