South Florida: King for High-Tech Exports

::cck::2187::/cck::

Talk about Miami trade, and much of the activity involves high-tech products – specifically, cellphones, computers and printers sold to Latin America and the Caribbean. 

High-tech goods represent five of the top 10 exports from the Miami Customs district and 45 percent of total exports from the area. Indeed, demand for cellphones is so strong in Latin American region nowadays that Miami area has been the top U.S. exporter of cellphones for seven straight years.

Those were just a few insights from WorldCity’s Trade Connections event, “Miami: The Technology Trade King,” held Oct. 18 in Doral and attended by more than 50 people. The session discussed the reasons for Miami’s prowess and ways to keep its key role as the shopping cart to Latin America.

Miami’s strength in high-tech trade

First, the prowess: Miami has strengthened its role exporting high-tech goods because of the rapid expansion of Latin America’s middle class and rising demand there. South Florida has excellent logistics into the region, said panelist Yali Luna, vice president of inventory and purchasing for Intcomex, a Miami-based electronics distributor with more than 48,000 resellers in Latin America and the Caribbean. Yali Luna, vice president of inventory and purchasing for Intcomex, a Miami-based electronics distributor with more than 48,000 resellers in Latin America and the Caribbean.

But as Latin America modernizes and closes its infrastructure gap with Miami, the challenge arises: Will the region start importing more directly from Asia and other high-tech production areas?, asked panelist Jay Gumbiner, who oversees Latin America research for high-tech researcher IDC.

And how can South Florida exporters sustain their profits, as the price of phones, computers and other electronics keep dropping, squeezing profit margins?, Luna asked an audience of trade specialists.

Intcomext illustrates the opportunities and challenges. Started in 1988 as a seller of floppy disks to the Latin American and Caribbean region, it now sells more than $1.3 billion in diverse products and employs more than 2,000 people, operating offices in 12 countries. The company has been growing at an average rate of 16 percent per year for the past decade, tapping soaring consumer demand and offering its customers credit among other services, said Luna.

Now, competition for its markets is rising from distributors in Houston, Panama and other places. But Miami still wins out for its deep business networks in the Latin American and Caribbean region – ties that took decades to develop, he said.

“Logistics is always going to be here in Miami, whatever the product,” he said. South Florida offers a sophisticated hub to consolidate goods from around the world and to re-sell them in combined lots to many different and smaller markets across the Latin American and Caribbean region, said Luna.

Shifts in product mix and exporters

The mix of products shipped from Miami keeps changing, however, panelists said. 

Today, sales of cell-phones and tablets are surging, but exports of desk-top computers and printers are dipping, as consumers shift to mobile devices, said moderator Ken Roberts, WorldCity’s presdient.

Jay Gumbiner, who oversees Latin America research for high-tech researcher IDC.

The mix of Miami companies exporting to Latin America also is shifting. Some small distributors, who starting out selling mainly printer cartridges and toners, are losing ground. Others that supplied parts for neighborhood shops to assemble computers also are fading, as prices for laptops and other devices drop and as mass retailers now offer credit to Latin American consumers, Gumbiner said.

To what extent might Latin American buyers turn to direct imports from China, eroding Miami’s edge as a supplier?, asked audience member Guillermo Mata, editor of CompuChannel magazine.

Importing from China is not as easy as it might seem, said Luna. Companies need large volumes to make direct imports work. They must find ways to monitor the quality of goods shipped from China. Some Latin American firms that have tried direct imports reverted to buying from Miami, choosing to remain with experienced consolidators, said Luna.

“What I see more is that Asia needs to continue to sell through the Miami area, because Miami can carry the inventory and distribute the goods more frequently in lesser quantities,” Luna said.

Would Miami benefit from hosting a larger Asian community?, asked Charles Kropke, managing partner of Dragonfly Expeditions , who is exploring development of a “Chinatown” in South Florida.

The answer may depend on how many giant Asian freighters actually end up coming through the expanded Panama Canal to Miami. Greater trade might attract more Asians to Miami, Roberts said.

Peru, Colombia and Chile shine; Argentina, Venezuela tough sells

Not all Latin American markets are the same for high-tech sales, of course.

Fastest-growing ones in percentage terms include Peru, Colombia, Chile and Panama, Gumbiner said. Overall, Brazil ranks as the biggest by far, though its growth rate is slower, Gumbiner said.

Argentina and Venezuela stand out among the most difficult for sales. Argentina now requires import licenses for most products, and Venezuela limits access to foreign currency, making it tough for importers to buy, panelists and audience members agreed.

Intocomex has shifted sales from Argentina to other markets since import licenses have been required, Luna said. And many high-tech companies have ended sales support in Venezuela, Gumbiner said.

Consumers in Argentina, Venezuela and elsewhere sometimes turn to high-tech goods smuggled in from Paraguay or other black-market sources. Those products could come indirectly from Miami too.

“Creative exporting has been a part of Miami business forever,” joked Luna.

Trade Connections is one of six event series organized by media company WorldCity to bring together international executives on international business topics. The series is sponsored by PortMiami, Banesco, Miami-Dade Aviation, American Airlines Cargo and Seaboard Marine.

The next Trade Connections on the 2014 import-export forecast is set for Dec. 11.

::/introtext::
::fulltext::::/fulltext:: ::cck::2187::/cck::