Tuesday, July 17, 2018

Become part of our community

captcha 

Roberto Peckham

Inexmoda -- the Medellin-based national trade group for Colombia’s textile and fashion industry – announced January 25 that the 30th annual “Colombiatex” show here generated new business deals likely to top US$356 million, surpassing last year’s estimate of US$326 million.

In total, 36% of the dollar value of projected new-business deals here involved purchase of textiles; 28% involved machinery, 19% in feedstocks other than fibers; 10% in fibers, and 7% in “other” supplies.

In all, 22,653 people from 60 nations attended this year’s version of Colombiatex – up 3% year-on-year – among which were 14,023 commercial buyers, 13% of those international. Among the internationals, 28% came from Ecuador; 10% from Mexico and 8% from the USA.

During the three-day event (January 23-25), Colombiatex once again cemented its position among Latin America’s leading textile-industry trade shows -- with growing evidence of renewed industry optimism this year, following a difficult 2017, when Colombian consumers were hit by higher retail value-added (IVA) taxes and an economic slow-down, as noted in a closing press conference by Inexmoda president Carlos Eduardo Botero.

This year’s show over-flowed the entire Plaza Mayor inside-space capacity, spilling into tented staging-areas adjacent -- resulting in more-than 12,000 square meters of commercial show area for the 579 exhibitors from 22 countries.

Brazil – which in December 2017 approved a two-way, free-trade agreement with Colombia, eliminating duties on textiles and clothing -- led the field in international exhibitors (21%), with India second (19%) and Spain third (10%), according to Inexmoda.

“The Colombiatex model gives us a very positive cost-benefit and the [participating] companies are very satisfied, especially given the new agreement between Mercosur nations [Brazil, Paraguay, Uruguay, Argentina] and Colombia, which stimulates bilateral trade relations,” added Rafael Cervone, executive director of the Texbrasil textile promotional group.

In addition to the surging crowds and bigger buying deals, Colombiatex also hosted 21 lectures on industrial, technical, social, environmental, marketing and fashion trends -- organized by Medellin’s Universidad Pontificia Bolivariana (UPB) and attended by 7,300 in-person, plus another 6,700 via internet streaming to international audiences, thanks to live broadcasts by local TV station Telemedellin.

Another nine “trends-forum” sessions here attracted 1,038 attendees for special insights into textile and fashion concepts, while 10 other workshops examined emerging challenges facing textile and clothing manufacturers.

Meanwhile, a concurrent “fashion system business roundtable” organized by the Mayor of Medellin and business-promotion agency ProColombia brought-together 161 local exporters and 85 international buyers, generating an estimated US$9 million in additional business deals.

Yet another new feature to this year’s edition of Colombiatex included 32 independent graphic and visual artists who showed their designs and explained the latest technical trends in graphics, colors and textures. Meanwhile, “Denim Day” demonstrations -- now a leading feature at Colombiatex -- showed the latest innovations in design and manufacture in jeans-wear.

Finally, according to figures provided by the Medellin Mayor’s office, each foreign attendee to Colombiatex this year was estimated to have spent (on average) about COP$2,416,320 (US$858) per day in hotel, meals, transport and other expenses, with a net economic benefit to the city of about US$12 million.


Medellin-based multinational electric-power giant EPM announced January 19 the start-up of a 590 megawatt-hours/year (MWh/year) solar-voltaic power system for the “El Tesoro” shopping mall in the Poblado district.

The photovoltaic system will operate in parallel with conventional grid power (overwhelmingly hydroelectric-sourced), according to EPM.

It’s EPM’s first-ever such system installed and financed for commercial customers, under a 15-year contract deal, according to the company, whose sole owner is the municipality of Medellin.

According to EPM general manager Jorge Londoño de la Cuesta, the new system includes 1,568 solar panels, covering a roof area of 2,570 square meters and supplying power mainly to the common areas of the shopping center.

With the new system, “we expect to generate approximately 590 MWh annually, equivalent to the power consumption of approximately 341 homes,” de la Cuesta said.

El Tesoro general manager Adriana González Zapata added that the new system “will bring great benefits – economically, because it will substitute for about 24% of [grid power], and environmentally, as part of our commitment to reduce our carbón footprint.”

The solar-power system will have dispatch priority in power supply, with grid-power serving as backup.

EPM’s 40.9%-owned “Erco Energia” affiliate built and installed the system and will provide maintenance. EPM now can offer similar systems to commercial customers that have “ample” space for photovoltaic panels, the company added.

EPM will assume the up-front cost of the system as well as handle installation, operation and maintenance. The company will recoup its investment via long-term contracts at “stable” and “competitive” prices per kilowatt-hour -- paired with conventional grid energy supply to ensure constant, reliable power, according to EPM.

Companies employing such solar-power systems can now claim credits as socially responsible entrerprises (“Responsabilidad Social Empresarial,” RSE), and also can get real-time reports on solar power use, according to the company.

The solar-power system EPM is offering doesn’t employ battery storage, but rather is custom-designed for each customer’s power profile, according to the company.

For each 100 kilowatts of newly installed solar power capacity, a commercial company could claim an annual reduction of 28 tonnes of carbon dioxide (CO2) emissions, equivalent to the typical CO2 footprint of 81 homes, according to EPM.


Medellin business-development agency Agencia de Cooperación e Inversión de Medellín y el Área Metropolitana (ACI) announced January 19 that Switzerland-based multinational consultant Amaris plans to expand its Colombian and South American operations following start-up of new offices at Medellin’s “Ruta N” high-tech hosting center.

“Teamwork between ACI Medellín, Ruta N and ProColombia, managed to consolidate the presence of this company in the country,” according to ACI.

Amaris – now operating through 65 offices in 50 countries, with some 700 corporate clients – chose Medellin for expansion because of the “innovative environment offered by the city and its strategic geographical location to support its other offices in the provision of recruitment services, human resources, administration, finance and technical support,” according to ACI.

“Ruta N offered us a pleasant work environment,” added Sara Mondragón, platform manager at Amaris Medellin. “Thanks to the other [high-tech] companies installed [here], we are surrounded by an innovative and challenging environment. We constantly interact with the members of other foreign companies that are part of the Ruta N ecosystem” and “we see an excellent opportunity to benefit from their knowledge of the Colombian market.

“To make this decision we made an analysis of the environment and the quality of life in Latin America. Medellín was the best decision [considering] cost, safety, quality of life, institutional support and human talent,” Mondragón concluded.

Amaris -- founded in Switzerland in 2007 -- specializes in business-administration consulting, information technology, telecommunications, engineering, biotech and pharmaceutical sectors.

“With a turnover of €187 million [US$228 million], its goal in 2018 is to reach a team of 5,000 employees -- currently amounting to 3,650 -- and thus ratify itself as a world leader in independent consulting,” according to the company.


The latest study by Medellin-based XM – Colombia’s national power-grid operator and wholesale power-trading center – finds that demand for electric power in Antioquia slipped by 0.8% year-on-year during full-year 2017, while nationwide power demand actually rose 1.3%.

Nationwide power demand in 2017 totaled 66,893 gigawatt-hours, the study found.

Power demand growth in 2017 was relatively strong compared to 2016, when demand rose just 0.2% year-on-year, XM revealed in a report issued January 17.

Strongest power-demand-growth in 2017 occurred in the Atlantic Coast (up 3.8%) and in Guaviare (up 2.4%), XM found.

Nationwide power demand growth for the month of December 2017 rose 3.2% year-on-year, the study found. Residential and small-business power demand rose 4.1% year-on-year in December 2017, but industrial-commercial demand rose by just 1.1%, the study found.


The latest monthly survey of leading banks and financial firms by Colombia’s Banco de la Republica (the national bank) finds that the Colombian peso is likely to trade in a range of COP$2,800 to COP$3,200 per US$1 during 2018, with a foreseen average of COP$2,995/US$1 by year-end.

The monthly survey (see: http://www.banrep.gov.co/es/informe-estadisticas-monetarias-y-cambiarias) of 40 leading private banks, stock analysts, pension funds and international organizations also sees the COP/US dollar trading in roughly the same ranges through 2019 and 2020.

Severe cold weather in the northern hemisphere in recent weeks has boosted global energy demand, with the result that rising oil prices -- traded in US dollars -- habitually weaken relative values of the US dollar against other currencies, including the Colombian peso.

As a result, the Colombian peso has been trading below COP$2,900/US$1 in the last couple of weeks, down from more than COP$3,000/US$1 during several days in Decemeber 2017.

The same survey also found that full-year 2018 inflation is likely to come-in at around 3.47%, with full-year 2019 inflation seen at around 3.33%.

Gross domestic product (“PIB” in Spanish initials) is seen growing by 2.45% this year, according to the average forecast of the surveyed analysts.


In a new study released January 15, the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) finds that Colombia’s gross domestic product (GDP) is likely to rebound to 2.6% growth in 2018, up from 1.8% in 2017.

“GDP is projected to expand by 2.6% in 2018 against a backdrop of lower interest rates, higher oil prices and an expected improvement in the performance of the economies of the United States and the Euro area,” the latter two areas being key Colombian export markets, according to the study.

 During 2017, Colombia’s domestic demand slipped, pinching GDP growth. However, “there are some indications that the slowdown may have now bottomed out and that the growth rate will have begun to pick up [since] the third quarter of 2017,” according to ECLAC.

Meanwhile, “the upturn in international mineral and oil prices [during 2017] helped to bring down the deficit on the goods account as the value of fuel exports strengthened,” the study noted.

“Foreign direct investment (FDI), although weaker than the year before, and portfolio investment were the two categories of inflows that made the biggest contributions to the financial account in the first half of 2017,” according to ECLAC.

On a related front, “gross fixed capital formation rose slightly thanks to an acceleration of investment in civil works, agricultural facilities and transport equipment. Investment in construction slumped, however. Government consumption climbed at a rate of 3.5%.

“Growth was driven by the agricultural sector –with coffee production and other crops leading the way– and by sectors associated with social, personal and financial services,” the study noted.

On the other hand, “the construction sector was hurt by weaker building demand and by contractual problems that delayed the closing of the financial packages for the 4G [fourth-generation] road infrastructure program.

“The mining sector continued to decline, although there were some faint signs of a recovery thanks to an upturn in prices,” ECLAC added.

Fedesarollo Predicts 2.4% Rise in GDP

Meanwhile, Fedesarollo -- Colombia’s leading economic think-tank – on January 12 released its latest Tendencia Económica (economic trends) report, finding that national GDP is likely to grow by 2.4% this year.

Fedesarollo also noted that Wall Street bond rater Standard & Poor’s last month cut its rating on Colombia’s sovereign debt to "BBB-", down from a prior "BBB" rating, although maintaining a “stable” outlook. “The decision by S&P highlights the fiscal challenges over the mid-term,” Fedesarollo’s report noted.

Although federal tax collections in 2017 were “weak,” Colombia’s fiscal goals were met thanks to a COP$4 trillion (US$1.4 billion) cut in government spending along with a one-time fiscal gain from massive fines imposed upon cell-phone companies accused of price-rigging, the study found.

However, such one-time gains aren’t in the cards in future years, so the government must take further steps to maintain its fiscal targets, Fedesarollo added.

Meanwhile, the most recent economic indicators show that Colombia’s full-year 2017 GDP growth likely finished at around 1.7%, while latest GDP forecasts for 2018 indicate a likely rebound to around 2.4% growth, the study noted.


Medellin-based multinational power giant EPM announced December 29 that it won a US$1 billion credit from the Interamerican Development Bank (IDB) “Invest” funding subsidiary for debt finance of its 2.4-gigawatt, US$5 billion “Hidroituango” hydroelectric project in Antioquia.

The credit package includes payback terms of eight-to-12 years. Draws would take place during a four-year period, virtually completing 100% of Hidroituango project finance, according to EPM.

Commenting on the deal, EPM general manager Jorge Londoño de la Cuesta said the finance package is of “profound significance” for the company as it ensures broader funding diversity.

As a result of the latest deal, 36% of Hidroituango finance will come from EPM’s own resources with the other 64% from debt sources.

Winning IDB backing not only represents debt diversification but also means that major international lenders fully recognize EPM’s technical, social, environmental and financial capacity, he added.

The US$1 billion package includes US$50 million from the Chinese government, US$300 million from IDB and US$650 million from private international banks including Sumitomo Mitsui, BNP Paribas, BBVA, Banco Santander, CDPB, KFW PEX and ICBC, according to EPM.

The Hidroituango project is now 80% complete with the first 300 megawatts of power output scheduled to start at year-end 2018, according to the company.

EPM is 100% owned by the city of Medellin and now operates throughout Colombia, Guatemala, El Salvador, Panamá, Chile and México, providing electric power, natural gas, drinking water and sewage treatment systems.


 

Medellin Mayor Federico Gutierrez and Antioquia Governor Luis Perez jointly announced December 18 that the 9.8-kilometers-long “Toyo” tunnel project has now won required environmental licenses, paving the way for construction start-up in January 2018.

The “Toyo” tunnel project – estimated to cost COP$1.83 trillion (US$617 million) in 2012 pesos -- would link the new “Mar 1” and “Mar 2” highway projects together, dramatically improving Medellin’s highway connections to current and future Atlantic freight ports.

Colombia’s environmental licensing agency (Autoridad Nacional de Licencias Ambientales, ANLA) had demanded several changes to the project prior to giving final approval, according to the joint press statement.

The Antioquia department is putting-up COP$780 billion (US$263 million), while the city of Medellin is adding COP$520 billion (US$175 million) and the “INVIAS” national highway agency adds another COP$530 billion (US$174 million) to the project.

The project also includes 18 smaller tunnels of 18 kilometers total, 30 bridges totaling 3 kilometers in length, and 16.9 kilometers of surface highway.

INVIAS has already contracted to the Antioquia government the first section (“Tramo I”) of the project, expected to last six years and cost COP$1.045 trillion (US$352 million) in 2015 pesos. This section includes road works between Santa Fe de Antioquia and Cañasgordas, passing underneath the municipality of Giraldo.

INVIAS aims to award the second section (“Tramo II”) in 2018, according to the joint press statement.

Mayor Gutiérrez added that the project not only will make Medellin industries more competitive, but also will contribute to development of the long-neglected Uraba región of Antioquia.

Environmental licenses include special protective measures for highway sections between Cañasgordas and Buenos Aires; between Pinguro and Las Habas; between Buenos Aires and El Madero; and between Manglar and Giraldo, according to the agency.

Licenses also include provisions for 17 other bridges not authorized earlier; permits for air pollutant emissions; and permits for proper disposal of extracted rocks and dirt.


In a December 21 press conference at Mayor Federico Gutierrez's office, Medellin’s top business-development agency leaders revealed a host of initiatives that promise to bring millions of dollars in new investments and re-investments starting in 2018 and subsequent years.

One example: At least three of the world’s top hotel chains are mulling a proposal to build a 180-room executive hotel adjacent to Medellin’s Plaza Mayor convention center, as Agencia de Cooperación e Inversión (ACI) director Sergio Escobar revealed in a post-presentation interview with Medellín Herald.

If a deal is struck in 2018, then it’s possible that construction would start soon afterward -- and the hotel could open for business as soon as 2020, he added.

In his presentation here, Escobar revealed that foreign direct investment (FDI) in Medellin soared to US$372.7 million this year, up from US$211.6 million in 2016.

Among the biggest 2017 investors in Medellin include airport concessionaire Airplan SA (US$34 million), Hotel Marriott/Grupo Roble (US$40 million), and French multinational Almacentes Exito (US$200 million), he said.

Source countries for FDI in Medellin this year include USA (four companies), France (three companies), Canada (two), and one each from Argentina, Brazil, Denmark (a brand-new entrant), El Salvador, Holland, Panama, the UK, Switzerland and Uruguay, he explained.

Tourism Growing

In a separate presentation here, Maria Fernanda Galeano -- Medellin’s Secretary of Economic Development -- revealed that as of December 10 this year, Medellin has hosted 254,541 foreign visitors, up 4.21% year-on-year, with the USA (49%), Panama (18%) and Mexico (15%) accounting for the most visitors. Over the past five years, foreign visitors to Medellin have more than doubled -- and business tourism is especially emphasized, as such tourists spend far more on average than typical pleasure tourists, she added.

So far this year, Medellin has captured 92 major events, up from only 15 events 10 years ago, Medellin Convention & Visitors Bureau director Ana Maria Gallego added here.

Besides well-known annual events for the textile, fashion, electric power and transport industries, Medellin also this year nabbed the prestigious “Smart City Business” convention, Gallego explained.

In 2018, Medellin will host the pioneering “IPBES” biodiversity conference; the South American Hotel & Tourism Investment Conference; and the 74th annual Sociedad Interamericana de Prensa (SIP) conference of journalists, she said.

Plaza Mayor Strengthens Events, Finance

Meanwhile, Plaza Mayor director Juan Santiago Escobar cited in his presentation a drastically improved financial situation for the convention center (which posted several yearly losses prior to 2016, blamed on prior-administration mismanagement) as well as continuing improvements and expansions of facilities.

Through November 2017, Plaza Mayor realized sales growth of 30% year-on-year, while 2017 earnings before interest, taxes, depreciation and amortization rose to more-than COP$3 billion (US$1 million), he said.

Total events at Plaza Mayor grew from 482 in 2016 to 496 in 2017, including big conventions such as ExpoAgrofuturo, World of Business Ideas (WOBI) and the “Feria de las 2 Ruedas” motorcycle show.

Total visitors to Plaza Mayor events so far this year hit 837,584 up 10% year-on-year, he said.

In 2018, major shows coming to Plaza Mayor include Colombiatex, Expofitness, Expoinmobiliaria, Congreso Nacional de Enfermeria, Feria de las Dos Ruedas, Exposolar, Colombiamoda, Expocamacol, Feria Internacional Minera, Congreso Colombiano de Pediatria, Congreso Panamericano de Transporte, Smart City Business Congress and the “INCUBATOUR” tourism conference, Escobar added.

Ruta N/Innovation District Advances

Meanwhile, Medellin’s “Innovation District” high-tech business-development center director Paulina Villa explained in her presentation that Medellin and its “Ruta N” tech center have attracted 49 new businesses this year, including the “Grupo Konekta” multinational software development factory.

In addition, global package-delivery giant UPS has recently added 200 high-tech back-office specialists at Ruta N, while another 108 high-tech companies are now exporting services from Medellin for the first time, Villa revealed.

Additionally, another 86 more companies are expected to join the “Innovation District” in 2018 – joining 204 companies from 30 countries already here, Villa said.


Colombia’s national infrastructure agency (Agencia Nacional de Infraestructura, ANI) and the Financiera de Desarrollo Nacional (FDN) national financing organization jointly announced December 14 that a new deal ensures COP$1.47 trillion (US$490 million) financing for the “Ruta al Mar” highway project linking northern Antioquia to Atlantic coastal ports.

The new financing package is a first-of-its-kind for Colombian public-private infrastructure projects, involving a combination of bonds and other investors and featuring investment-grade rankings from Wall Street bond raters Fitch and Moody’s, according to ANI.

Medellin-based Construcciones El Cóndor is the highway project developer and builder.

Commenting on the deal, FDN director Clemente del Valle stated that the financing consortium includes local banks, the FDN, debt-finance specialist Ashmore CAF, and international financiers.

FDN will provide COP$400 billion (US$133 million) or 27.17% of the total loan funds, while local banks will put-up 19.02%. Ashmore CAF assumes 18.74% and another 35.46% comes from international capital markets via purchase of Colombia’s UVR bonds.

For the deal, U.S.-based Goldman Sachs organized a COP$520 billion (US$173 million) float of bonds carrying a 26-year term and a 6.75% coupon, according to ANI.

The “Ruta al Mar” Project – linking Antioquia, Cordoba, Sucre and Bolivar departments -- is part of a series of “fourth generation” (4G) highway projects around Colombia. The latest project also would smooth commerce between Valle del Cauca, the coffee regions and Atlantic ports.

The project will create bypasses around congested municipalities along the route, as well as connect to other major highways including the “Conexion Norte” and “Mar 2” highways, according to ANI.

In all, “Ruta al Mar” includes construction of 112 kilometers of new highway, rehabilitation and upgrades to another 226 kilometers of existing highway, and operations-and-maintenance of another 154 kilometers of existing highway, according to the agency.

FDN’s investors including Japan-based Sumitomo Mitsui, the U.S.-based International Finance Corporation (a division of the World Bank), and Latin America’s “CAF” multilateral investment bank.

Construcciones El Condor president Luz María Correa hailed the new financing deal, describing it as “a great milestone in financing of public-private [infrastructure] partnerships without government funds -- and this validates the strength of 4G concession contracts.”


Page 8 of 45

SILLETEROS PARADE 2016 by JOHN AND DONNA STORMZAND (click to enlarge)

MEDELLÍN PHOTOS by Gabriel Buitrago (click to enlarge)

Featured

Volunteering February 20 2017 0
As the late North American philosopher A.B. Johnson once quipped, “mighty oaks from little acorns…

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.

Medellin Herald welcomes your editorial contributions, comments and story-idea suggestions. Send us a message using the "contact" section.

Contact US

logo def
Medellin Herald: Find news, information, reviews and opinion on business, events, conferences, congresses, education, real estate, investing, retiring and more.
  • COL (4) 386 06 27
  • USA (1) 305 517 76 35
  •  www.medellinherald.com 
  •  This email address is being protected from spambots. You need JavaScript enabled to view it. 
  • Medellin, Antioquia, Colombia

Medellín Photo Galery

Medellin, contrasting colors and styles by Gabriel Buitrago
MPGMPGMPGMPGMPGMPGMPGMPGMPGMPGMPGnav