Social Footprint

How has Siemens contributed to economic development in Ecuador over the past four decades?

During that period, Siemens had pursued the fundamental goal of contributing to the development of Ecuador’s telecommunications sector. Indeed, up until 2007, we had squarely focused our business activity on that particular industry. Since that year however, we have restructured our portfolio into the four main components of energy, industry, healthcare, and infrastructure and cities. We pride ourselves on our dynamism and flexibility in adapting to changing markets, which is what we have long done in Ecuador. In the energy sector, products and services offered by Siemens focus on the generation of both renewable and non-renewable energy. For example, we are a leading global company in terms of onshore wind farms, and among the largest in terms of offshore wind parks. We are also a leading producer of steam turbines, as well as diesel and gas variants. In terms of our activity in the industrial sector, we focus on providing solutions for our clients’ industrial processes, especially in terms of their automation. In the healthcare segment, we specialize in the manufacturing of high-tech medical equipment for the detection and treatment of illnesses and diseases. Additionally, we recently expanded our activity in healthcare within the sphere of diagnostics, including the manufacture and commercialization of equipment and chemical products for blood test analyses. Finally, the infrastructure and cities sector is rather new, having been established some two years ago upon the restructuring of certain parts of the energy and industry segments. We have also factored transport into this area, as we are a global leader in electric transport technology. Siemens’ pedigree in Ecuador in these four areas means that we are in a position to tackle projects anywhere in the country. For example, the Quito Underground project is of particular interest to us, and we consider it a high priority. Additionally, we have already taken part in various projects to build hydroelectric plants in Ecuador, and are keen to expand our activity in this particular segment by leveraging our extensive know-how to the benefit of the country. Large-scale wind parks are also some of the targeted projects for Siemens in Ecuador. These are just selected examples, and I could also mention the Pacific Refinery, a very important project for Ecuador, and potentially for Siemens, too. In the health industry, Siemens has already sold a significant amount of high-tech equipment to Ecuadorean hospitals, and due to the government’s significant investment in this sector, I am sure we can only increase our activity in it. One of Siemens’ main competitive advantages is its high-quality technology, which is recognized worldwide. Furthermore, we are known as a reliable partner that ensures security and reliability in terms of products and services, and that has knowledge of both domestic and foreign markets. We have been in Ecuador during the good years and the bad, and our position has evolved over time. However, we have always been a leading company and a synonym for quality, trust, experience, and transparency.

What is the significance of Ecuador for Siemens globally?

For Siemens, it is vital to take part in Ecuador’s largest infrastructure projects, especially those related to the government’s plans to shake up the national energy and electricity matrix. I believe that Siemens can play a leading role in this process, saving the country significant expense over the long term. The Pacific Refinery is another top priority for Siemens, because in the future it is set to become a key element in the broader economic development of the country. Overall, Siemens is eager to participate in Ecuador’s high-tech projects of social and economic merit. Finally, the high levels of investment in education and public health committed to by the incumbent government also interest Siemens as a leading manufacturer of medical equipment and technology. Siemens is well equipped to leave its social footprint on Ecuadorean society through the strength of its leading-edge technological offering.

What challenges does Ecuador present as a place to do business, and how has Siemens adapted to them?

I would wish to establish a manufacturing plant in Ecuador, yet the country has to take certain steps toward easing the entry of foreign investment in the production arena, being a rather high-cost country when compared to other regional destinations. I mainly refer to customs benefits, workforce, taxes, legal security, and so on. For example, 85% of the investment in Ecuador comes from public sources, meaning that the major investor in the country is the government itself. The government would be well advised to reconsider the general conditions required to attract a greater volume of foreign investment. The current level of public investment has been possible thanks to the efforts by the central government to recover strategic resources in the national interest, which in some cases had previously been mismanaged by private companies. I believe that Ecuador’s large infrastructure projects that Siemens is interested in could potentially bring about a turning point regarding the business environment for foreign companies, as the government is set to allow foreign players to play a very active role. I personally believe that Ecuador has achieved greater development over the past 10 years than it had managed to do in the previous 50. However, it still needs to take another step forward in certain areas such as attaching greater value to technology and quality than to money when it comes to tendering large infrastructure projects; as such projects form the bedrock of broader national development. In this context, the government has already taken key steps to leverage the quality of imported products by introducing a host of regulatory measures and requirements to be met by foreign products, reducing the overall number of imports and favoring quality.

What are the advantages of Ecuador as a commercial address?

Ecuador is a highly attractive country for doing business; the government is willing to open the doors to foreign investors, and we are also talking about a country that needs infrastructure for its development. In this context, foreign investors require the flexibility to adapt to any type of condition they may encounter, which Siemens clearly possesses. As CEO of Siemens and an Ecuadorean myself, I only hope that we continue on this path in the future for the benefit of the private sector, as well as of the country and its people, because we still have a tangible need for infrastructure. However, and as I have said, we require higher levels of foreign investment in Ecuador to boost overall development. The government is taking the right steps in this direction, but foreign investors still need to see a more appealing environment.

© The Business Year – April 2014