Sunday, February 17, 2019

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Medellin-based textile, fibers and filaments manufacturing specialist Enka de Colombia revealed in a February 7 filing with Colombia’s Superfinanciera corporate-oversight agency that its full-year 2018 profits more-than doubled year-on-year, to COP$4.3 billion (US$1.37 million).

Operating earnings rose 15% year-on-year, to COP$411 billion (US$131 million), thanks to higher prices in international markets and a 3% hike in sales volumes, according to the company.

Especially notable was the 122% jump in sales to North America, along with an 8% rise in sales to Brazil and a 21% hike in sales to the local Colombian market, according to Enka.

Earnings before interest, taxes, depreciation and amortization (EBITDA) jumped 38% year-on-year, to COP$31.8 billion (US$10 million), according to the company.

The positive earnings enabled Enka to invest nearly COP$17 billion (US$5.4 million) mainly in projects to expand and modernize its novel recycling operations that convert waste plastics into specialty fibers and textiles, according to the company.


Medellin-based multinational paints, chemicals and water-treatment technology manufacturer Grupo Orbis revealed February 14 in a filing with Colomba’s Superfinanciera corporate oversight agency that it posted a COP$3.2 billion (US$1 million) net loss for full-year 2018, compared to a COP$40.7 billion (US$12.9 million) net profit in 2017.

Full-year 2018 sales dipped slightly year-on-year, to COP$1.46 trillion (US$464 million), down 0.9% from COP$1.69 trillion (US$538 million) in 2017, according to the company.

The company includes the giant “Pintuco” paints subsidiary along with chemicals unit Andercol, water-treatment specialist O-Tek and aerosol-spray specialist Mundial.

On another front, Icontec -- the Colombian Institute of Technical Standards and Certification – last month awarded Pintuco a special certification for its recent efforts to slash net global-warming emissions through the “BanCO2 Plus” project, which helps Antioquian farmers replant native trees and conserve local water resources.

“Being ‘carbon-neutral’ is the result of the commitment that our organization has toward reduction and compensation for greenhouse gases (GHG) emissions,” according to Pintuco.


Medellin-based commercial real estate investor Valores Simesa revealed February 14 in a filing with Colombia’s Superfinanciera corporate-oversight agency that its full-year 2018 after-tax profits rose to COP$24 billion (US$7.6 million), up from COP$12 billion (US$3.8 million) in 2017.

Bancolombia’s investment-bank division held 68% of the stock of Valores Simesa, according to the company’s most recent annual report (issued March 2018).

A core holding of the company is Medellin’s giant “Ciudad del Rio” center, which includes shops, restaurants, offices, residential apartments, parking garages and the Modern Art Museum.

Valores Simesa is a spin-off from the former Siderugica iron foundry complex, now occupied by Medellin's Modern Art Museum.

Besides real-estate deals, Valores Simesa also invests in other companies. Part of its income has come from royalties from the Drummond coal mines in Colombia, but this arrangement is due to expire at year-end 2019, according to the company.


China-based electric vehicle (EV) manufacturer BYD on February 7 launched sales of zero-emissions EV cars at its first-ever retail showroom in Medellin – simultaneous with the Mayor’s office announcing new driving restrictions on polluting vehicles with internal combustion engines (ICEs) for the entire Medellin metro area.

BYD’s new dealership on Avenida El Poblado opposite the Premium Plaza mall comes on the heels of winning a contract to supply 64 pure electric buses to Medellin’s “Metro” public transit agency later this year (see Medellin Herald on December 29, 2018). It's a further sign that Medellin aims to slash air pollution by replacing ICE vehicles with EVs of all types, including cars, motorcycles, buses,  taxis, local-delivery vehicles, rail transit, cable-cars and trams.

“Medellín is among the places with the greatest potential in Colombia for the development of mobility with electric vehicles,” said Juan Felipe Velásquez, BYD’s commercial director for Antioquia.

“Both the municipal administration and private companies [including EV sellers Renault, Nissan and Mitsubishi] have made important bets in the development of sustainable mobility . . . The environmental [air-pollution] contingency of the metropolitan area has caused the authorities to focus their efforts on electric vehicle replacement,” he added.

Medellin also aims to expand the fleet of EV taxis, Velasquez said. “This project is very important for us as BYD, so much so that we are structuring two electric-taxi pilot [projects] with different individual public transport administration companies, which will start in a few months,” he said.

Beyond EV cars, buses and taxis, BYD “intends to exploit a high-potential market with last-mile cargo [local delivery] vehicles,” according to the company.

Meanwhile, Medellin and the regional planning agency (Area Metropolitana del Valle de Aburra, AMVA) on February 7 jointly announced greater “pico y placa” restricions on more ICE vehicles over more days -- including six days/week (rather than the current five) and sequentially hitting six of the last nine digits on license plates each day, rather than just the current four of the nine digits.

The existing “pico y placa” vehicle-driving restrictions alternately ban circulation of vehicles -- depending upon the final digits of license plates -- during morning and afternoon rush-hours. However, zero-emissions EVs are exempt from such driving restrictions.

Under the new scheme – debuting February 18 and lasting until at least March 30, the typical "dry" season for air-pollution alerts – older, higher-polluting vehicles will face even greater hours-of-operation restrictions, from 5 am to 8:30 am, and then from 4:30 pm to 9 pm Monday through Saturday, according to AMVA.


Bogota-based cement/concrete manufacturing giant Cemex LatAm Holdings announced February 7 that its fourth-quarter (4Q) 2018 region-wide net profits fell 33% year-on-year, to US$10 million, from US$33 million in 4Q 2017.

But full-year 2018 profits improved 36% year-on-year, to US$63 million, from US$46 million in 2017, according to the company, which operates in Colombia, Panamá, Costa Rica, Nicaragua, El Salvador and Guatemala.

As for its Colombia operations, full-year 2018 sales slipped 7% year-on-year, to US$524 million, while 4Q 2018 sales dipped 6% year-on-year, to US$125 million, from US$134 million in 4Q 2017, according to Cemex.

Colombian sales of grey cement for full-year 2018 dipped 6% year-on-year, but rose 4% in 4Q 2018, while Colombian concrete sales fell 11% for full-year 2018 and by 8% in 4Q 2018.

Sales of aggregates in Colombia declined 14% for full-year 2018 and 15% in 4Q 2018 versus 4Q 2017, according to the company.

Cemex foresees 2019 demand for cement in Colombia either flat or rising by 1%, while demand for concrete and aggregates would rise by 1% to 3%, according to the company. Product prices also began to recover slightly in the Colombian market during 4Q 2018, according to the company.

Colombia’s residential-sector demand rose slightly during 4Q 2018, according to Cemex, especially in the “informal” and “self-built” housing segments.

For these lower-income “social housing” sectors, “there are encouraging signs for the future, given that sales and construction permits [in those sectors] through September 2018 rose by 5% and 15% respectively . . . supported by continuing government subsidies,” according to the company.

However, the middle- and upper-income housing sectors in Colombia continue to face challenges as new-starts and housing-permit applications had fallen 18% through September 2018, while inventories in these sectors remain relatively high, at 16-months turnover rate.

As for the Colombian infrastructure sector (highways, airports, tunnels, hospitals, sewage-treatment-plants, schools, marine ports), 4Q 2018 demand continued relatively strong, according to the company.

Cemex dispatched its products to 15 “fourth-generation” (4G) highway projects including the “Mar 1” and “Vias del Nus” projects in Antioquia, plus the “Autopista al Rio Magdalena 2;” “Bucaramanga-Barranca-Yondó;” “Bucaramanga-Pamplona;” and “Pasto-Rumichaca” projects. Cemex boasts that it achieved 36% market participation in 4G projects during 2018.

For the rest of 2019, Cemex expects demand for cement in Colombian infrastructure proejcts to rise by low-single-digits, including several large road-building projects in Bogota, according to the company.


Medellin-based multinational electric power giant EPM announced Tuesday, February 5, that it successfully shut the last water-intake tunnel at its giant Hidroituango hydroelectric dam, hence accelerating the planned diversion of the Cauca River over the dam’s engineered spillway by several weeks – and also enabling repairs to begin.

Temporarily, the decision means that downstream fish populations will be affected for about three days -- because the Cauca River still requires three more days to rise to the level of the engineered spillway at the top of the dam.

In a press conference, EPM general manager Jorge Londoño de la Cuesta explained that technical experts advised EPM to accelerate the closure of the water-intake tunnels in order to avoid a possible collapse of those tunnels.

Rising pressure differences between the water behind the dam and the water entering the tunnels would increase with rising water levels, threatening a potential tunnel collapse, the experts warned. Such a possible collapse would have prevented EPM from controlling water levels through the machine room, potentially wrecking the US$5 billion project and possibly endangering downstream populations.

As the last intake-gate was shut to the water tunnel, downstream water flows below the dam started falling drastically – to an estimated 35 cubic meters per second, down from around 450 cubic meters per second in recent days.

But flows should return to “summer-season” normal by next weekend (February 8-9) when the dam spillway outflow gradually restores normal Cauca River levels in the downstream area, he explained.

To reduce temporary impact on fish, EPM hired and trained 700 local fishermen to help rescue fish trapped in pools as water flow diminishes, he added.

In addition, EPM released extra water from its Porce hydroelectric dam system near Guatape, Antioquia, in order to boost river flows where the Nechi River meets the Cauca River at the town of Nechi, Antioquia, downstream from Hidroituango.

Cauca River flows have been decreasing in recent weeks because of the typically low-rainfall “summer season” of February and March. That decline in flow prompted EPM to hire local people to help rescue some 32,000 fish recently trapped in pools downstream of the dam.

Now that the final water-intake gate at the dam is closed, EPM personnel can start the process of entering the machine room, which has been flooded since last May because of an unexpected collapse in a nearby diversion tunnel. Since the dam and the spillway weren’t yet finished last year, EPM made an emergency decision to divert Cauca River water through the machine room, in order to avoid a dam collapse.

Since then, EPM and its engineering partners discovered a big hole that had opened between water-intake tunnels one and two, which lead to the machine room. The hole probably developed because of water erosion -- caused by the emergency evacuation of river water through the machine-room tunnels, according to EPM.

Now, EPM not only will have to repair damages to the machine room, but also to the water-intake tunnels damaged by erosion over the past 10 months.

The company still hopes to start-up the 2.4-gigawatt Hidroituango project by year-end 2021, which eventually would supply fully 17% of Colombia’s entire national electricity demand.

But EPM can’t be certain of the start-up schedule until it has the opportunity to inspect the damages in the machine room and the tunnels.

The city of Medellin gets nearly 25% of its entire annual budget from city-owned EPM. So, restoration and recovery of the Hidroituango project will be crucial to city finances in the coming decades.


The U.S. Embassy in Colombia announced February 4 that U.S. citizens living in Colombia and receiving Social Security retirement benefits now have to follow a new procedure to show “proof of life.”

 


The just-concluded, 31st annual “Colombiatex” textile and clothing trade show at Medellin’s Plaza Mayor convention center here generated an estimated US$481 million in sales expectations for 2019 – an estimated 26% jump over 2018 indications, according to show organizer Inexmoda.

Speaking to an overflow crowd of national and international journalists here January 24, Inexmoda president Carlos Eduardo Botero cited unusually heavy trade-show traffic starting from the first day of the three-day show.

In all, 22,482 people from 52 countries – including 14,424 buyers -- attended this year’s show, which occupied the entire Plaza Mayor facilities, spilling out into tents temporarily set-up in adjacent parking and staging areas.

That strong first day was a big indicator that Colombia’s textile and clothing industries – principally located in Medellin and Antioquia – are indeed recovering from the 2017 economic recession, Botero said.

Of the 508 companies with trade-show booths here this year, 61% were Colombian nationals (326 in total), with Antioquia dominating at 48%, followed by Cundinamarca/Bogota with 42%.

Of the 208 international exhibitors, 21% were from India, followed by Brazil (20%), Spain (13%), Italy (9%) and the USA (6%), he said.

Among the USA exhibitors was export trade specialist Cotton USA, a major show sponsor. According to the group, sales of U.S. cotton fibers to Colombian textile and clothing manufacturers had dropped sharply year-on-year during the 2017 recession. But 2018 preliminary data indicate a rebound, especially in the specialty “open-end” threads favored by Colombian manufacturers for certain blouses and higher-quality clothes.

Of the projected sales resulting from this year's show, 42% were for textiles, 20% for machinery, 15% for supplies, 8% in threads and fibers and 4% in high-tech systems, according to Inexmoda.

Botero added that the average sales tickets rose year-on-year, thanks to stronger economic indicators and also because of 1,300 specially organized, prearranged conferences between sellers and buyers.

Inexmoda, Colombia trade promotion agency ProColombia and the Medellin Mayor’s Office also organized a separate trade round for 65 international buyers, meeting with 170 Colombian sellers, focused mainly upon sportswear, work clothes, underwear and swimwear. Among the buyers: U.S.-based global entertainment giant Disney.

An additional group of 126 first-time Colombiatex buyers -- from 21 countries enjoying free-trade or low-tariff agreements with Colombia -- also enjoyed special access to national sellers, according to ProColombia vice-president Juliana Villegas.

A parallel “knowledge fair” organized by Universidad Pontificia Bolivariana (UPB) at the adjacent Teatro Metropolitano featured 22 conferences attended by 8,470 in-person and another 7,719 via streaming in cooperation with local TV station TeleMedellin. An additional 300 persons attended six other workshops here on practical aspects of fashion and marketing.

Meanwhile, a related “tendencies forum” included 11 expert sessions on the latest trends in textiles, accessories and denimwear, attended by another 2,000, while a “graphic arts market” special section featured the work of 21 Colombia graphic artists involved in novel fashion design.

Among the more unusual technologies displayed at this year’s show was a computerized scheme developed by Brazil-based Audaces, which employs “avatar” three-dimensional “virtual mannequins,” tied to computer-driven, customized clothing production.

The system aims to enable customers to enter a retail store, get fitted there for an “avatar” computerized body representation, then – using an in-store computer and screen -- choose from a pre-determined variety of styles, designs, colors and specifications for clothing, as Audaces international sales manager Eduardo Lopez explained to Medellin Herald.

This scheme could produce a final product at the factory in as few as 20 minutes, although delivery to the final customer would take more time -- perhaps a couple of days, and possibly involving home-delivery. Rollout of the complete system at Colombian retail stores hasn't yet happened, but it could become an attractive marketing scheme especially for larger chain retailers.

Several other novel companies here were promoting environmentally-friendly textiles (including organic cotton), which reduce impacts to water supplies from field-to-factory, as well as during subsequent clothes-washing cycles.

Another group of “Origin Colombia” companies were promoting products made-locally and-marketed-internationally, while a “private sale” section at the show featured the latest work of top local designers.


Colombia Minister of Agriculture Andres Valencia on January 18 hailed the start-up of the nation’s biggest Hass avocado export plant at Sonson, Antioquia, targeting the European and Saudi Arabian markets.

The new plant, a joint venture between South Africa-based Westfalia Group and Chile-based Agricom, aims to help Colombia meet a goal over the next two years to export at least US$100 million worth of Hass avocados annually, according to the Minister.

The new plant will buy avocados mainly from smaller local producers, aiming to help them find attractive, stable export markets, as well as boosting their access to financial credits, according to the Minister.

Colombia currently produces more than 400,000 tons/year of various types of avocados, ranking fifth globally.

Between 2015 and 2017, Colombia’s Hass avocado exports skyrocketed by 413%, and then rose another 38% last year, hitting US$73 million in export value, Valencia said, citing local Corpohass trade-association statistics.

That association reported 15,530 hectares dedicated to Hass avocado production in Colombia, with full-year 2018 output estimated at 95,250 tons, he added.

The latest plant expansion in Sonson “reflects rising investor confidence in Colombia,” added Westfalia Fruit Colombia general manager Pedro Aguilar-Niño.

Machinery for the new plant came from New Zealand-based Compac, a división of Tomra Food. The new plant can process more tan 20 tons per hour, and during 2019 it would handle up-to-4-million kilos per year, according to the company.

Together with Westfalia’s sister processing plant in nearby Guarne, Antioquia, Westfalia estimates that it will be able to export some 9 million kilos of Hass avocados from Colombia this year.


Colombia President Ivan Duque announced January 22 at the World Economic Forum summit in Davos, Switzerland, that Medellin just won a world-wide competition to launch the first “Fourth Industrial Revolution” research center in all of Latin America.

Over the next 18 months, the initial research projects at the center will involve artificial intelligence (AI); the so-called “internet of things;” and “blockchain” technology (used to store and transfer information in a decentralized and secure manner).

Medellin’s “Ruta N” high-tech hosting center is already involved in projects involving these three areas, along with Colombia's Universidad Nacional, ViveLab Bogotá and Alianza Caoba (Bogota), the president noted.

According to Ruta N, the center initially will focus on three work areas:

1. Increase the national government's use of artificial intelligence to combat money laundering, improve tax collections and reduce contraband. "This would open opportunities for local entrepreneurs to develop security technologies that enhance the use of data such as images, videos and sensors as probative material in criminal cases," according to Ruta N.

2. Enable the creation of technologies to improve mobility. This would include development of projects to optimize bus routes; encourage the use of public transport by improving travel times, safety and quality; reduce pollution  by increasing the use of shared vehicles; generate information in real time for public transport users to increase the movement of people; and optimize the network of local traffic lights.

3. Maintain the balance between privacy and the productive use of personal data. "One of the most interesting projects in this regard plans to use blockchain, one of the technologies of the Fourth Industrial Revolution, to organize property-appraisal archives and encourage the transparent management of data related to the value and the traceability of property ownership," according to Ruta N. 

Colombia is the first country in the Spanish-speaking world to host such a center, joining first-wave host countries USA, Japan, China and India. Israel, South Africa, United Arab Emirates and Norway are joining Colombia in this second wave, according to the World Economic Forum (WEF).

The centers are cooperative endeavors between the private sector, government and academia, according to WEF.

According to José Manuel Restrepo, Colombia’s Minister of Commerce, Industry and Tourism, the centers open new avenues to obtain “disruptive” technologies that can boost industrial efficiency and competitiveness.

“We have a challenge to create a regulatory pathway to improve the potential for accelerated development of local, regional and global technology,” Minister Restrepo added.

Medellin Mayor Federico Gutiérrez added that the Fourth Industrial Revolution research projects could trigger "exponential" economic growth, generating "equity and opportunities for all sectors of society.”

Medellin’s winning bid to host the new center came about thanks to the help of the Colombia national government, the Interamerican Development Bank (IDB), Ruta N and Agencia de Cooperación e Inversión de Medellín y el Área Metropolitana (ACI), Gutierrez added.

According to WEF founder Klaus Schwab, the Fourth Industrial Revolution will combine advanced digital, physical and biological technologies, accelerating global industrial, social and economic changes.


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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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