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Written by May 14 2018 0

Medellin-based software whiz-kids Jorge Soto and Santiago Villegas just won recognition in the prestigious “Endeavor Entrepreneurs” competition at Endeavor’s 79th “International Selection Panel” (ISP) in Louisville, Kentucky.

Soto, the chief executive officer (CEO) of Medellin accounting software pioneer Alegra, and Villegas, the chief technology officer (CTO) of the company, competed globally against dozens of start-ups to join 13 other companies in the Endeavor winners circle this month.

“’Endeavor Entrepreneurs’ gain access to comprehensive customized services, including introductions to local and international business mentors and volunteers from Fortune 500 consulting firms who will help them address key needs,” according to global startup-promotion organization Endeavor.

“Endeavor Entrepreneurs have had a significant track record of creating hundreds of thousands of jobs, generating billions of dollars in revenues, and building sustainable growth models in their home countries,” the organization added in a May 10 announcement.

Explaining the award announcement, Endeavor cited Alegra’s clever niche: “Small businesses should not have big bookkeeping problems, and yet, 95% of the US$6 billion Latin American micro, small and medium enterprise (MSME) market still manages invoices and administration by hand.

“In 2017, Colombian and Costa Rican governments followed the lead of seven other Latin American governments including Mexico, Brazil, and Peru, by mandating that all businesses, irrespective of industry and size, must issue 100% of their invoices electronically by 2019. In January 2018, Panama followed suit with a pilot program; in April 2018, the Dominican Republic did the same.”

Responding to these challenges, “Alegra is alleviating a major pain point for 25,000 daily active users in nine countries by providing an easy-to-use, cloud-based software for Latin American MSMEs to efficiently manage their businesses under these new regulatory standards,” Endeavor noted.

Alegra History, Expansion Plans

Asked to elaborate on the company’s origins and evolution, Alegra told Medellin Herald that CEO Soto is an administrative-engineering graduate from Medellin’s Escuela de Ingenieria Antioquia (EIA) University, as well as a political science student.

“In his career as an entrepreneur, Soto created five companies -- and in some of these he failed, but he knew how to get up and take advantage of the experience gained. Thus, he discovered the needs of companies and created his sixth venture, Alegra.com, a software in the cloud for small-business administration.

“Soto realized from experience that one problem that small business owners have in common is how to invoice and keep accounts. Thus, he was given the task of finding a solution:

“First he tried Excel, but found that the margins are unbalanced, the invoice numbers are duplicated and in general it becomes chaotic. Then he used a traditional accounting software and found that these are complicated, expensive systems, made for the [professional] accountant and most are more than 20 years old.

“The third option was to use foreign software, but since it was not adapted to the legislation and requirements of the local [Colombia] tax authority, this generated inconveniences and more work. These options did not solve the needs of administration of the micro and small companies.

“With this idea, the team of Alegra got together to start working on the project, and after a year of development they went on the market in January 2013. The reception was very good from the first month -- and since then they have not stopped growing.

“After one year of the launch in Colombia -- and already with a number of important users who had validated the product -- they thought of scaling up to other countries. So, in 2014, they released versions for Panama, Mexico and the Dominican Republic, where they found very similar situations, and where Alegra solved the same problems.

“Today, five years after going on the market, Alegra has 120,000 registered companies on its platform, a presence in 16 countries, and a team that makes the platform and service better every day.

“Unlike other startup ventures, Alegra has not been part of any incubator or accompaniment process, which has enabled them to grow autonomously without having to resort to funds or venture capital to leverage growth.

“The next objectives of the company are to launch versions for the countries that are missing from the Latin American region, such as Argentina, then continue with countries in Africa and Southeast Asia, as Alegra seeks to be the first and best option for small businesses in developing countries,” according to the company.

Written by May 09 2018 0

Medellin-based construction giant Conconcreto reported May 9 that its first quarter (1Q) 2018 consolidated net income dropped 86% year-on-year, to COP$2 billion (US$698,000).

Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) also dropped by 36% year-on-year, to COP$33 billion (US$11.5 million).

Colombia’s relatively weak economic growth, recent volatility in the exchange rate between the U.S. dollar and the Colombian peso, plus uncertainty over the possible impacts of this year’s upcoming national elections have penalized the construction and housing sectors, according to Conconcreto.

Consolidated gross income also dipped 18% year-on-year thanks to completion of infrastructure projects last year and lack of enough new projects to generate offsetting income, the company added.

Meanwhile, the company expects the Antioquia government to deliver a feasibility report this month to Colombia’s Treasury Ministry regarding the proposed COP$911 billion (US$318 million), 13.8-kilometers-long, “Doble Calzada Oriente” (DCO) divided highway project just east of Medellin.

That project -- in which Conconcreto would take a 60% financing stake -- has already won route approvals from the local Cornare environmental agency, according to the company. The new route would connect the existing Las Palmas highway near the Sancho Paisa roundabout -- as well as the nearby El Escobero highway in Envigado -- to and through the El Tablazo municipality, finally terminating near the San Vicente de Paul Hospital alongside the Jose Maria Cordoba (Rionegro) international airport highway.

Another proposed project – the Darien International Port in Antioquia – awaits finalization of negotiations with potential Port clients. That ocean-freight port project earlier won backing from Brazil-based private equity fund Patria, in partnership with U.S.-based private equity fund Blackstone.

Meanwhile, in Conconcreto’s existing housing and infrastructure construction portfolios, current backlog totals COP$2.4 trillion (US$837 million), equivalent to 1.7 years of work, according to the company.

The company also is a major contractor on the US$5 billion “Hidroituango” hydroelectric dam project in Antioquia – now nearing completion of the largest, initial phase.

Conconcreto also is working with the “Pactia” commercial real estate development partnership on the Corferias Hotel (Bogotá), the El Ensueño Shopping Center (Bogotá), the Chamber of Commerce of Medellín building, Blu Logistics, and others, according to the company.

Written by May 07 2018 0

Medellin-based textile giant Fabricato announced May 1 that it posted a COP$11.6 billion (US$4.1 million) net loss for first quarter (1Q) 2018, 13% worse than the COP$10 billion (US$3.5 million) net loss in 1Q 2017.

Sales also dipped 13.6% year-on-year, while earnings before interest, taxes, depreciation and amortization (EBITDA) dropped 45% year-on-year, to COP$1.8 billion (US$637,000).

However, the 1Q 2018 business environment improved compared to the immediate prior quarter (4Q 2017) thanks to relatively low inflation, low interest rates, rising oil prices and an improved consumer confidence index, according to the company.

In addition, Colombia’s textile sector “is beginning to see the positive effect of [government] measures taken at the end of last year against illegal competition,” including “intensification in the fight against contraband [clothing imports] and especially the antidumping measure taken against denim imports from China,” according to Fabricato.

In addition, the start-up of the new free-trade agreement between Colombia and the Mercosur nations enables favorable flow of fabrics at zero tariffs between Colombia, Mexico, Peru, Argentina and Brazil, the company noted.

Meanwhile, Fabricato continues to transfer operations from its shuttered “Riotex” factory in Rionegro, Antioquia, to its centralized Bello, Antioquia, production facilities, hence boosting productivity. Completion of this operational transfer is expected by July.

Reviewing 1Q 2018 results, Fabricato highlighted what it termed as a “bad January, but a good February and March, with EBITDA positive, to a level aligned with our budget.”

In addition, “another relevant factor is our new business model, under which the volume of production is aligned with sales expectations for the period, instead of employing the concept of maximum capacity utilization,” according to Fabricato.

“This has reduced product inventory by 25% in [Colombia Peso] terms and 32% in volume terms, year-on-year,” the company added.

Written by April 02 2018 0
Canada-based multinationals Gran Colombia Gold (GCC) and Red Eagle Mining (REM) in late March both reported progress in their gold mining operations here in Antioquia during 2017.
 
For GCC, adjusted net income for fourth quarter (4Q) 2017 nearly tripled, to US$9.1 million, from US$3.4 million in 4Q 2016. Similarly, for full-year 2017, GCC’s adjusted net income rose to US$23 million, up from US$15.6 million in 2016.
 
“The improvement in 2017’s annual adjusted net income compared with last year reflects the positive impact on income from operations of the higher gold production this year, lower financing costs due to debt reductions, and a decrease in Colombian wealth tax compared with the prior year,” according to GCC.
 
As for Red Eagle, full-year 2017 net loss worsened year-on-year, to US$15.7 million, compared to a net loss of US$6.9 million in 2016.
 
“The [2017] net loss increased compared to the 2016 period primarily due to increased mine site expenses, as less costs were capitalized during 2017, mineral property exploration costs [rose] at Santa Rosa as regional targets were drilled for the first time, and interest expense [rose]. Total assets and shareholders’ equity increased primarily due to increased mine development,” REM added. 
 
“The focus for the second half of 2017 was to complete enough underground development to support sustainable production and give access to underground drill pads.
 
“With most of the new equipment having arrived at site through February and March [2018] and the final scoops due for delivery in April, the mine is planned to ramp up to 750 tonnes per day in second-quarter 2018.
 
“The additional underground development and infill drilling will allow consistent production resulting in an estimated 45,000 ounces of gold produced during 2018. The mine now has sufficient underground development to support sustainable production,” REM added. 
 
GCC Highlights
 
Commenting on recent progress, GCC executive co-chairman Serafino Iacono added that “our 2017 results demonstrate that we are firing on all cylinders [as] 2017’s gold production was up 16% from 2016.
 
“Adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] increased by 14% over last year and is almost double the amount reported for 2015. Excess cash flow came in as expected at US$16.4 million.
 
“At Segovia [Antioquia], we added more ounces to our mineral resource estimate through exploration than we mined in 2017 and we reported our first ever mineral reserve for the project today.
 
“We continued to invest in the infrastructure at Segovia, not just in mine development and mining equipment but in areas that raise the bar in health and safety, environmental management and through our foundation, social projects that benefit the community,” he added.
 
Gran Colombia exceeded its guidance for 2017 with total gold production reaching 173,821 ounces, up 16% over 2016, according to the company.
 
“Fueled by continued growth in the company’s high-grade Segovia operations, total gold production increased to 51,699 ounces in the fourth quarter of 2017, up 26% over the fourth quarter last year.
 
“Gran Colombia expects its Segovia operations will produce 158,000 to 167,000 ounces in 2018, raising 2018’s total gold production guidance to a range of 182,000 to 193,000 ounces,” the company added.
 
Written by March 22 2018 0

Medellin’s “Ruta N” technology-company hosting center announced March 22 that Madrid-based Konecta now has 100 engineers working here -- and exporting services to nine countries including Spain, Portugal, United Kingdom, Morroco, Argentina, Chile, México, Perú and Brazil.

Konecta offers business process outsourcing (BPO, software development and a contact center for “diverse sectors,” according to Ruta N.

The company’s goals for 2018 include updating its technology capacity and providing “effective mechanisms to connect clients with solutions for their needs,” according to Ruta N.

“Our company’s strategy defined the need to centralize software development in one country,” added Konecta Colombia president José Roberto Sierra.

“We analyzed different alternatives before finally deciding upon Medellin, given the high availability in this city of professionals with good qualifications, as well as the decided commitment of local government in favor of innovation and development of projects in the technology sector,” he added.

With coordinated help from Colombian business-development agency Procolombia, Ruta N and Medellin’s ACI (Agencia de Coopercion e Inversion de Medellin y el Area Metropolitana), Konecta first installed its multi-disciplinary innovation center in October 2017, the agency noted.

Separately, Konecta announced February 1 that its full-year 2017 sales hit €770 million (COP$2.7 trillion) thanks to “sustained organic growth” along with integration of recently acquired Allus and B-Connect in Latin America.

“Over the past year, [Konecta] launched a digital transformation and efficiency unit, as well as Konecta Software Factory, its center for technological innovation in Medellin,” the company added.

“Looking ahead, Konecta will keep on searching for opportunities that favor its growth in the American, Brazilian, and European markets, to allow Konecta to meet its goal of ranking among the top world’s five companies in the sector,” according to the company.

Page 6 of 13

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About Medellin Herald

Medellin Herald is a locally produced, English-language news and advisory service uniquely focused upon a more-mature audience of visitors, investors, conference and trade-show attendees, property buyers, expats, retirees, volunteers and nature lovers.

U.S. native Roberto Peckham, who founded Medellin Herald in 2015, has been residing in metro Medellin since 2005 and has traveled regularly and extensively throughout Colombia since 1981.

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