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Alorica Dominican

Breakdown: How Paraguay Caught Alorica’s Eye

Alorica is months away from launching operations in Ciudad del Este, a relatively small town in the eastern border of Paraguay. 

Alorica’s footprint in Latin America is huge, but not all-encompassing. There are several other more popular sites where the US-based BPO could set up fresh operations, but company leadership in the region seems vested in building on Paraguay’s potential.

How did Paraguay, which tends to be passed over in favor of its bigger, more solicited neighbors in the South Cone, catch the eye of one of the region’s bigger BPO players?

The plan: Alorica is in the final stages of setting up an office in Ciudad del Este to service its Brazilian clients. If all goes according to plan, operations will launch by the end of January 2024, with headcount reaching the 1,000 mark in 18 months.

The perks: Jose Ramírez, President of Alorica in LATAM and the Caribbean, listed several perks in Paraguay which caught the eye of company leadership.

  • No big fish: There’s little presence of big BPO players in the country. Konecta and Atento are the only comparable competitors to Alorica. Most BPOs in Paraguay are local and mid-sized firms, and they tend to concentrate in the capital city of Asuncion, far from Ciudad del Este.
  • Stable growth: Paraguay’s economy has been described by the IMF as remarkably resilient in the face of tremendous challenges over the past four years. GDP is projected to grow 4.5% in 2023 and 3.8% in 2024. 
    • “In terms of numbers, what caught my eyes was the stability of their economy when compared to that of neighboring countries,” Jose Ramirez told NSAM. “You rarely hear about Paraguay’s current state of affairs simply because there’s no political turmoil.” 
  • Portuguese speakers: Ciudad del Este is located on the Brazil-Paraguay border, thus it has a large population of Portuguese speakers, an ideal arrangement for Alorica’s plans to service Brazilian clients. 
  • Competitive costs: Ramirez estimates that, taking all costs into consideration, operating in Ciudad del Este is 30% cheaper than in Montevideo (Uruguay’s capital), another city from which Alorica provides service in Portuguese.  
  • Potential for English: Paraguay is often ranked among the Latin American countries with the highest numbers of English speakers per capita. Alorica has no plans at the moment to service the English-speaking market from Paraguay, but the option is there, Ramirez pointed out.
Jose Ramírez, President of Alorica in LATAM and the Caribbean

First contact: While several of the perks mentioned above convinced Alorica’s LATAM leadership of Paraguay’s viability, a single report on the country’s English capabilities was what picked Jose Ramirez’s curiosity. 

  • The report led Ramirez down a path of research on Paraguay’s economic and political situation, eventually leading to his decision to set up shop in the country, he explained.

A very soft landing: Paraguayan authorities were quite welcoming to Alorica. According to Ramirez, once the company shared their plans for job creation in Ciudad del Este, the Paraguayan Ministry of Labor became very accommodating, providing prompt access to industry experts, trusted partners for construction, logistics and other services, and more. 

  • “Quite probably, if it was us who had to do all of the research, it would have cost us a ton of money and a lot of valuable time,” Ramirez commented. “Their help was invaluable to us, because we appreciate time so much.”
  • Jose Ramirez even held a meeting with the Paraguayan president himself, a rarity for BPO companies in bigger geos such as Mexico or Colombia. 

NSAM’s Take: In a landscape where the word “saturation” keeps being thrown around, sites like Paraguay will garner interest among players of all sizes in the industry. We expect to see a couple of mid-sized and bigger companies stepping their toes into Paraguayan sites, whether that be Ciudad del Este or Asuncion, in the next couple years.

At least on paper, Paraguay looks like a good gamble, with scalability being perhaps its biggest drawback.The country’s population stood at 7.4 million as of 2022, according to its government’s statistical office. Asuncion registered a population of about 520,000; Ciudad del Este’s stood at 326,000.

Yet Alorica seems to be in no hurry to expand rapidly in Paraguay. If its gamble pays off, we can see the company giving English a shot in the country. Even then, Alorica might keep Paraguay as a smaller site among a score of alternatives for delivery in the region. 

Another point of interest in Alorica’s Paraguayan gamble is the catalyst which led to it. We’ve heard it all: a competitor’s success; tips from colleagues; even a pleasant holiday in the location. In Alorica’s case, all it took to catch the eye of one of the company’s major executives was a single, interesting and relatively ignored data point. Everything else followed from that.

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Alorica’s Paraguayan expedition also shows the importance of proper softlanding services, whether provided by government agencies or private entities. Ramirez himself pointed out that such attention and support is seldom offered to BPO companies in bigger countries such as Mexico, where Alorica is “just another multinational.” 

Prompt access to relevant data, legal guidance and business contacts can go a very long way, as well as the sensation of being cared for and welcomed.

Cesar Cantu

Cesar is the Managing Editor of Nearshore Americas. He's a journalist based in Mexico City, with experience covering foreign trade policy, agribusiness and the food industry in Mexico and Latin America.

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