Uruguay is ready to take off in the aerospace industry: experts highlighted advantages and opportunities

The fiscal and economic advantages, the facilities offered by the teamwork of its institutions, its geographical location, and its good social situation make Uruguay an attractive country for the development of aerospace and NewSpace companies. These were the conclusions drawn from the panel “Exploring Horizons: opportunities in the NewSpace Industry,” held at the CUTI Business Forum at LATU.

The head of Operations of Epic Aerospace, Luca Estebenet, the founder and CEO of the venture capital and private equity firm ARCHE Company, Juan Pablo Garavaglia, the legal advisor of the Uruguayan Air Force, Mariana García and the Investment and Aftercare manager of Uruguay XXI, Alejandro Ferrari, attended this panel, moderated by Juan Ciapessoni, entrepreneur and CUTI's VP of Innovation.

"Uruguay is a country to do business; there are already established companies, it has many countries around that can contribute as suppliers and as labor, it is well positioned, far from political-war-military problems, everything is good,” explained Estebenet, head of Operations of the US space tugboat company installed in Zonamerica since 2021.

Estebenet recounted that they put their first satellite into orbit in January of this year. “We had to learn everything from scratch, and with the help of Zonamerica and Uruguay XXI, everything worked well. Uruguay is good. We arrived without a track record, and here the processes, the commercialization, and the huge tax and economic advantages helped us to get started,” he added.

The businessman highlighted the seriousness of the country, its institutions, its legal, economic, and banking security, free zones, tax exemptions, and the certainty that a company such as the Argentine Satellogic was already operating well in the country. “This comprehensive work that Uruguay does makes it one of the freest countries, which allows the private sector to develop with fewer obstacles and a facilitating State,” he added.

Epic Aerospace is a last-mile transportation company in space, focusing on transporting cargo from any origin to its final destination in space. “You can think of it as an Uber in space,” Estebenet said.

In Uruguay, the company has a factory of about 400 square meters with a plant specialized in hardware manufacturing processes and with office and warehouse space. “All this infrastructure allows us to market, import, and export without problems. With this plant, the company can already bill tens of millions of dollars so that we will be good for the next two or three years,” he told Uruguay XXI.

NewSpace is on the rise

The panel gave a brief overview of NewSpace and distinguished it from the traditional aerospace industry. As Garavaglia explained, until a few years ago, space programs were reserved for only a few governments and companies with large amounts of capital. Now, nanosatellites have changed the orbital ecosystem and have given entry to industries that have made a place for themselves in the so-called NewSpace. This growing sector democratizes the commercialization of space thanks to smaller, more agile, and lower-cost technology.

"When we talk about Newspace, we refer to this movement of startups or privately financed companies that has been happening globally since 2001,” he explained.

Alejandro Ferrari, from Uruguay XXI, told the panel that in mid-2021, the agency received interest from a company in the space industry that wanted to manufacture and launch small rockets from Uruguay. “In Uruguay, we have a spatial geographic advantage from where launches can be made. From a strip of about 100 kilometers on the east coast, launches could be made to equatorial and polar orbits without intervening in the airspace of neighboring countries, generating an opportunity,” he explained.

Uruguay XXI worked with the Air Force and the Municipality of Rocha to identify a site for this activity. The Ministry of Industry, Energy, and Mining also joined this team by financing an international consultancy to strengthen the regulation of an eventual spaceport. “We already have companies such as Satellogic or Epic installed in the country, and we are still talking to other interested parties. This topic has enormous potential and generates positioning opportunities for the country, but also spillover in other industries and activities”, clarified Ferrari.

For his part, García spoke about the need for a set of legislations that regulate the activity. “In Uruguay, there are already companies working in this sector, and a legal framework for this is necessary,” he said. He recalled that in December 2022, the Executive Branch sent to Parliament a bill to create the Uruguayan Space Agency, which would operate within the Presidency, with technical autonomy and as a deconcentrated body. The agency will have the purpose of directing and coordinating a space policy emphasizing the “economic, social and cultural development of its inhabitants,” said García.

According to the law, Space activities are carried out at 100 kilometers above sea level. “It includes the launching of objects into outer space and their return, the operation of a launching or re-entry site, the operation and control of space objects in orbit, the design and manufacture of space vehicles, the applications of space science and technology and the exploration and research activities carried out from the national territory by public or private legal entities. These are not exhaustive”, says the bill, which can be read here.

To conclude, Estebenet assured that the interaction between the State and the private sector, with the former as a facilitator and the companies innovating and risking capital, will be the formula for success. “It is what happened in countries with success stories,” he concluded.