In this interview, Santiago Carbonell, Senior Partner at McKinsey, shares insights on Guatemala’s investment landscape, highlighting key opportunities and challenges. He discusses infrastructure, economic stability, and growth potential, explaining why the country is gaining attention from global investors.

We know you have been in Guatemala since 2022, offering specialized consulting services in business transformation. We are interested in understanding which of these services are most in demand and the main needs you’ve identified in local companies.

McKinsey, one of the world’s largest consulting firms, was founded in the United States and has been operating for almost 100 years. In Latin America, the firm has been present for around 30 years, and about seven years ago, we began expanding into Central America by opening an office in Panama. From there, we have increased our presence in the region, and about three or four years ago, the idea to open an office in Guatemala emerged. As Colombians, we observed from Panama that Guatemala is the largest economy in Central America and a key driver for the region. This prompted us to increase our presence in the country and plan to open an office.

Today, we have nearly 30 people in the Guatemala office, most of whom are Guatemalans, along with a few international leaders who came to help establish the office. Our goal is for local leadership to be fully trained to run operations within a few years. We offer a wide range of consulting services, from strategy, our traditional focus, to digital transformation, analytics, business restructuring, and organization.

In which sectors you are having a positive impact on the country’s development, such as agribusiness or the textile sector.

We work with various sectors in Guatemala, including finance, consumer goods, agriculture, and manufacturing. The country’s economic and political stability over the past 20 years, along with a stable currency, has created a favorable environment for both local and international investors. The stability of the quetzal has given Guatemalan entrepreneurs the confidence to continue investing in the country, which is a significant strength. The continued investment from insiders — local entrepreneurs with investment options — is a clear sign of confidence in the country’s future.

What strategies does McKinsey propose to improve the competitiveness of Guatemalan companies in international markets?

We believe it’s crucial to bring global best practices in areas like digitalization, operations, and supply chain to improve local market efficiency and profitability. We also work with companies to identify growth opportunities beyond Guatemala’s borders. As the local market becomes more limited, we help companies optimize their operations and explore diversifying their portfolios in other regional countries, leveraging their experience in the Central American market, consumer knowledge, and regional logistics.

Which specific sectors are currently seeking McKinsey’s assistance the most to carry out their transformations?

There’s no specific sector to single out; in reality, they all have areas with potential for improvement. In general, the major sectors of the economy that I have observed are looking for opportunities to grow and show great interest in doing so. Economic stability, backed by the strength of the quetzal and the financial environment, has encouraged companies to think about expansion. However, some sectors are capitalizing more on nearshoring opportunities, such as textiles and agriculture, which focus on exports, compared to sectors more oriented toward the local market, like consumer goods and banking. The latter tend to focus more on growth strategies through mergers and acquisitions or expansion into other markets.

You established yourselves in Guatemala in 2022. How has your growth been over these two years, and what are your expectations for 2025?

Since the pandemic, we’ve been continuously working in Guatemala. In 2022, we formally established the office and created the legal entity, as well as began hiring local staff. Currently, we are approximately 30 people and plan to reach about 50 by 2025. After that, we will assess how the economy and growth opportunities evolve in the country. We are also looking to support entrepreneurs from Honduras and El Salvador, where we see a similar growth environment, though with different economies. In particular, Guatemala has a larger economy and a more extensive population, which presents greater opportunities.

We understand that some business leaders in Guatemala have achieved tangible results through their collaboration with you. Could you share a success story that is public?

Regarding results, we have achieved tangible improvements in various areas. For instance, in supply chain, we implemented analytical models that have optimized B2B channel service, and in the financial sector, we expanded service offerings and reached more clients. In the retail sector, we’ve made significant strides in pricing and marketing strategy. Investment in operational improvements remains a priority for Guatemalan entrepreneurs, who are committed to better serving the local market and reaching more consumers in a country with 18 million inhabitants. This contrasts with other countries where entrepreneurs are more focused on maintaining operations or expanding outside their borders.

You collaborate with the public administration, as demonstrated by your participation in the ‘Guatemala No Se Detiene’ program. How can you help companies gain legal certainty and support them in their regulatory challenges?

One of the standout projects in Guatemala has been our collaboration with Fundesa, a private entity advising the government and prioritizing legal certainty and infrastructure development. The ‘Guatemala No Se Detiene’ project demonstrates the business community’s commitment to the country’s growth, as they invested in hiring McKinsey to develop a national strategy. The initiative aims to establish the foundations for economic growth without political alignment, with key pillars like security, essential for attracting foreign investment.

How do you address challenges related to a lack of infrastructure?

All entrepreneurs agree this is the number one challenge, as the current state complicates exports and imports. Part of our work involves helping companies optimize their supply chains and logistics operations based on local realities, adjusting routes, inventory levels, and distribution agency locations. Although the infrastructure situation limits the country’s competitiveness, we support our clients in facing these challenges as best as possible.

What types of investors are local companies seeking when looking for international capital? For example, in the renewable energy sector, what investor profiles are they looking for?

Not all investors have the same risk appetite for investing in the region. However, those with experience in the Caribbean and Central America understand the existing potential. They know the advantages of the demographic dividend and the growth of the middle class, reminiscent of what happened in South America, particularly Brazil, a few years ago. Projections suggest the next 10 to 15 years will be an interesting period for the region due to rising GDP per capita and urbanization, which will drive consumption and generate opportunities in sectors like banking, retail, the food industry, and shopping centers.

Local investments reflect this trend, with a clear focus on capturing market growth. Retail companies and large shopping center developers are already adapting to leverage this boom. Foreign investors who understand the region and the favorable winds, conduct due diligence, and appreciate the stability of the quetzal in recent years can capitalize on these opportunities. However, there are challenges: major investment funds in the United States, for example, find that the investment volume in Central America is insufficient to justify their interest, making it challenging to attract large-scale capital.

It’s essential to understand that there are significant market trends benefiting Guatemala and the entire region. Among these trends are the demographic dividend, middle-class growth, urbanization, and migration. The young population is a key aspect of this demographic dividend.

If we look at how foreign investors have greatly benefited from these trends in Brazil and Chile, it’s clear there is an exciting moment here. So, who are these investors? They are those who understand the region and recognize these opportunities. They conduct due diligence, observe the stability of the quetzal and the country in recent years, and decide it’s worth capitalizing on these advantages. This is the profile of investors we need.

We would like to know how you manage the relationship between public administration and entrepreneurs, given that you work with both sectors. What strategies do you use to balance these interactions?

As for our work, we mainly collaborate with the private sector in the region. While we provide pro bono support to incoming administrations in some countries, most of our activities focus on helping companies improve their operations and strategies. For instance, we assist our clients in investment planning, optimizing their portfolios, and identifying growth opportunities in different markets.

How does McKinsey facilitate partnerships between local and foreign companies looking to expand their products beyond the Central American market?

We typically participate in forums and connections but prefer not to be too involved to avoid conflicts of interest. However, we help our clients develop portfolio strategies, defining where they should invest, in which countries, and how to allocate their capital. We also provide an overview of the country for those interested in investing in Central America, helping them understand the factors driving growth and opportunities in the region. However, we don’t directly focus on facilitating investments, as it’s not our core work.

Based on your personal experience and your contact with companies, which emerging sectors do you consider could represent the future of foreign investment in Guatemala?

In Guatemala, the outlook is encouraging, and several Guatemalan companies are expanding, becoming genuine multinational companies that reflect the country’s growth potential and capacity.

We’ve placed our bets on the country, and I personally moved here with my family, which reflects our confidence in the future of the Guatemalan economy. In terms of sectors with growth potential, consumer goods, construction, banking, and housing stand out due to the expanding middle class and urbanization. On the other hand, the ‘nearshoring’ trend also opens doors. Less industrialized industries, such as agriculture and food production, have the potential to establish themselves in Guatemala to leverage its young and growing workforce. Additionally, tourism remains an area with significant potential. Despite the increasing interest from U.S. and European visitors, much more can be done to attract South American tourists.

In summary, I would recommend that foreign investors consider Guatemala for several key aspects: the internal market is growing, meaning there is an increasingly strong consumer base; in addition, there are nearshoring opportunities for important sectors such as agriculture, food production, and textiles. There is also notable potential in tourism, which continues to be an underutilized sector with many development opportunities.

We just reviewed the opportunities the country offers. Now, what would you consider the main challenges for those looking to invest in Guatemala?

The main challenge for the country is undoubtedly infrastructure. It’s the biggest hurdle Guatemala faces, but the positive side is that there’s a general consensus on the need to resolve it, and we hope to see progress made. This issue isn’t unique to Guatemala; countries like Colombia face it as well.

Final Message

This is something many people mention, but Guatemala is truly a hidden gem in terms of stability, natural beauty, and opportunities for investors and entrepreneurs. It’s an exceptional place that deserves to be discovered and tapped into. It’s well worth taking a chance and coming to explore what it has to offer.