Sunday

The delegation of about 30, including Lt. Governor Becky Skillman and Congressman Dan Burton traveled to Guatemala this morning and arrived in the early afternoon.

Guatemala is a beautiful country, the largest in Central America, and we are staying in its capitol, Guatemala City. The city is in the mountainous south central region, and I would compare it to Denver, only with tropical vegetation. There are about 2 million in the city. Poverty and crime are a big problem, and it is not safe to travel without security. The gangs are well-armed, and the police force is small, inexperienced, and subject to corruption. The criminals operate without fear of punishment, and often in broad daylight, although we had no problems today.

After being greeted and escorted by the US consulate, we took a bus ride to the presidential palace, which we toured, and visited an open-air handicrafts market. The signs of the original Mayan empire are everywhere, and draw a sharp contrast to the colorful landscape which also includes plenty of McDonald's, Subway’s, Sherwin Williams paint stores, etc.

Our dinner with the representatives from the embassy featured some local cuisine, most of which was good, and a chance to get to know many of the others in the delegation. Throughout the day, I found it helpful to stick close to the Spanish-speaking members, although you can also get a lot done by pointing.

Tomorrow we tour food processing facilities, international trade specialists, and in the afternoon I have two separate meetings with hardwood company individuals. By the way, Guatemala means, ""place of trees" and there are many beautiful tropical hardwood species here, although I have learned that there are few sawmills and virtually no value-added manufacturers. Most of the trees milled are shipped without being dried, and I am told that there are tremendous opportunities for selling dry kilns down here. Is anyone listening?

It also seems like there could be great opportunities to find channels for both known (mahogany) species and new species to enter the American consumer markets.

Monday, January 9, 2006

First of all, I did not mention yesterday that both Lt. Governor Skillman and Dept. of Agriculture Director Andy Miller have previewed IHLA's branding campaign and both are very pleased and impressed. The program will be rolled out on February 1, and is very well crafted, as well as easy to use.

Today began with briefings from Guatemalan experts on laws, taxes and customs with regards to doing business here. In many respects they are similar to the US, but in many areas there are differences. The legal aspects are less subject to judicial interpretation and more clearly defined.

I find it very rewarding that every time the lieutenant governor addresses any group of people here, she talks about hardwoods as a key component of Indiana's ag economy. She has been very resilient and composed, despite a sciatic nerve problem that is causing her a great deal of back pain.

We took trips today to AGEXPRONT (an export promotion and assistant not-for-profit entity) and to GREFAL, which is their food processing association. On the way we saw police on the streets and riding in the backs of pickups with their assault rifles slung over their backs. Despite all the warnings of the crime problems, the lumber rep I met with assured me that he would not have brought his wife and kids back from twelve years in the states if he didn't feel safe here.

The big theme of this trip has been the Central American Free Trade Agreement (CAFTA), which permeates every conversation and presentation. Costa Rica is already on board, Guatemala is about to approve it, and Panama has not yet done so. In Guatemala, exports go out duty-free, while imports are still subject to steep tariffs. 90% of the country favors the adoption of CAFTA, except for the socialist left minority, who tries to convince locals that the small farmer, etc. is at risk. With the inordinate level of poverty here (6 in 10 people), it would seem that it's a no-brainer to encourage open trade and more foreign investment here, but it is especially liked because it sets forth strict guidelines for doing business, and clarifies perviously dubious regulations.

The hardwood industry here has few sawmills, but about 69 furniture manufacturing companies. Our goal here is to create opportunities and develop relationships, and my first meeting was with a veneer and plywood manufacturer (Nicolas Dorian) whose main markets are yachts and cigar boxes. He already has a partner in North America for access to domestic products, and was very enlightening to me about the reasons they don't have a lot of manufacturing and drying operations here -- primarily because of the high number of different tropical species (150-200) used and the special requirements of processing. Mahogany is slowly losing market share to several other native species, some of which I will share with you tomorrow. Nicolas was invaluable to me in getting an understanding of the industry here. I asked him many questions, and he seemed to really understand things on a big scale.

Other than furniture, their wood manufacturing is primarily in windows, doors and floors. The ISDA is making us work our tails off -- we average about 45 minutes of personal time between 8 a.m. and 9 p.m each day, but they are to be congratulated for the outstanding job of coordinating trip details and setting up these individual meetings with people from our respective industries. In fact, I have another meeting in 15 minutes, so that's all for today.

Buenos dias,

Ray

Tuesday, January 10, 2006

Monday ended with a trip to the Guatemalan ambassador's house for a reception. Before we left Guatemala on Tuesday morning, we visited a hypermarket (much like Wal Mart and owned by Wal Mart), and a smaller, upscale grocery store.

This kept most of the food and grain people happy, but nearly an hour in each store was a little much for me. It was either stay inside or go outside, where most places are guarded by heavily-armed security. Prices are very similar to the US, although milk seemed a little higher and meat a little lower. Maybe it was because some of it was tongue, feet, and stomach! These groceries look like ours, except for the packaging in Spanish. Soda is sold mostly in six-pack cans or three-liter bottles.

Yesterday, we made one of the first promising business contacts, by hooking up an IHLA member with a Guatemalan company in need of 40-50 containers per year. He's getting it now from Chile, and will switch if the price is equal. It's been a good success story around here.

Around noon we departed for Costa Rica. The pilots down here fly aggressively. Tonight we visited the home of Brad Corbett, a friend of Congressman Burton's and a self-made industrialist success story. His home in the mountains overlooks the beautiful lights of San Jose and is indescribably spectacular. Among other things, Corbett used to own the Texas Rangers before George W. Bush did.

Costa Rica is a more educated and more modern country than Guatemala, but with a high national debt that is crippling their infrastructure outside the big city and creating obstacles to growth. Their elections are coming soon, and the fate of CAFTA here hangs in the balance. They don't import or export a lot of hardwoods, yet they have scheduled more meetings for me tomorrow (three) than anyone else on the trip!

I'll also be visiting an ornamental plant cooperative and clean stock program with the Purdue and BioCrossroads folks, whose objective is to reduce pests on Costa Rica's plant exports. Our evening includes a trip to the home of the American ambassador to Costa Rica, who we met tonight at Corbett's house.

More tomorrow,

Ray

Wednesday, January 11, 2006

Today began with another delegation team briefing on the legal, political, and business situations in Costa Rica, followed by an hour-each-way trip to the APHIS project at an ornamental plant firm, returning with only minutes to spare and no lunch to three consecutive meetings with individuals and companies interested in developing wood product relationships with the US.

Some explanation: Unlike the other Latin American countries, Costa Rica is modern and growing, with construction everywhere, and a population that desires the best of everything in goods and services. They have many challenges to, which I won't elaborate on, but today's meetings were very frustrating because everyone here seems to want pine, pine, pine, and most are getting it from Chile and some from Venezuela. It's frustrating because you look around and see so many high-end hotels in the country, as well as nice homes and new offices, yet there is a misconception that hardwoods are too expensive and not desired.

It wasn't until our evening reception at the ambassador's residence did I meet a woman who has a successful beef business and has now started a cabinet company. She is among the few that see the bountiful opportunity here, and she also has the energy and determination to succeed. Although she now lives here, her roots are in Indiana, as her father was the head of the Indianapolis parks department under then-mayor Lugar, and she still has relatives in Indiana.

Another contact among today's meetings also was open to the introduction of hardwoods to this area, but the businesses here are very parochial, and it will be a while before he is in a position to move ahead. Indiana's hardwood industry continues to be one of the first things out of the mouth of our delegation leaders. Tonight, Andy Miller led with hardwoods when discussing the agricultural landscape of Indiana at the ambassador's reception, standing in for Lt. Governor Skillman who returned to Indiana this morning for the governor's address tonight.

As we left the ambassador's home, he shook my hand and said, "go sell some hardwood" even though there was nothing to identify me with the industry. It was a great feeling. As I write this it's 10:00 p.m., and our wake-up call is 3:45 a.m. for a 4:30 departure to the airport and our final leg of the trip - Panama. By the way, today we learned that Panama's minister of agriculture resigned, the day before we arrived to meet him! Although the trip has now officially become exhausting, I have to thank the IHLA Board for giving me this unique opportunity to travel with leaders of our state, meet heads of state, and see a part of the world that is both beautiful and absolutely ripe for expansion of hardwood markets. It has been an unbelievable experience, and I really feel like I'm making a difference. Until tomorrow,

Ray