In a recent post I talked about the business opportunities in serving the needs of the emerging middle class in Central America, and in particular in El Salvador. In Guatemala the lead story yesterday in a local newspaper, Siglo XXI, talks about the impending shortage of electricity in the country. (If you read Spanish, the full story is here.) The key information from the story is summarized below.
The most interesting number for me was the 43 percent increase in electricity subscribers. While part of the increase can be attributed to government efforts to expand electrification, the other important reason is the increase in the number of people with the disposable income to pay for electricity. I would suggest that this is further evidence of the emerging middle class in Central America, in this case in Guatemala.
Am I recommending that we build a power plant in Guatemala? Not exactly, unless you run a hedge fund and you are looking for less credit risk than mortgage-backed securities or want to diversify the portfolio out of the U.S. or China. I am, however, recommending that there are ample opportunities in Guatemala to serve these customers who only recently got electricity. Perhaps a concept that combined consumer credit with consumer electronics would work well. Maybe a cooperative that built wind powered electricity generation is feasible. Maybe simply a store that offered a very large selection of lamps at popular prices would work. The opportunities are there.
One note on the competitive landscape. Wal-Mart is expanding aggressively in Central America and already has six hypermarket stores just in Guatemala. The good news is that this investment is further proof of the emerging middle class. The bad news (maybe)is you do not want to take on Wal-mart head on, but fashion and trendiness are always Wal-Mart's weaknesses and trendiness extends well beyond just clothing to consumer electronics :)
Next post I will have more Excel tips.