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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.


Spain-based Grupo Globalia announced January 4 that its Air Europa airline subsidiary will launch three-times-a-week nonstop service between Medellin and Madrid starting June 1.

The company will employ new Boeing 787-9 “Dreamliner” jets, which can cut 40 minutes off flying time compared to competing jets on the same routes, according to Globalia.

Service to and from Medellin will be offered Tuesdays, Thursdays and Saturdays, offering new competition to Iberia’s and Avianca's existing nonstop flights between Medellin and Madrid.

Fare Comparisons

Air Europa was quoting a COP$2 million (US$626) fare for round-trip nonstop Medellin (MDE)-Madrid(MAD)-MDE for flights starting June 1. Iberia meanwhile was quoting COP$2.13 million (US$668) if including two pieces of luggage in the plane's belly, or no belly luggage (just carry-on) for COP$1,84 million (US$576) for June nonstop RT flights.

As for Avianca's June flights, it was quoting non-stop MDE-MAD-MDE (but not on same days as Air Europa nor Iberia) at COP$2,673,150 (US$848) including taxes and surcharges; fares for flights originating in Colombia  include the airport tax.

From its Madrid hub, Air Europa offers flights to 16 European destinations as well as 22 cities in Spain, according to the company.

Medellin’s international airport (Jose Maria Cordova, JMC) also offers other nonstop international flights to Miami, Fort Lauderdale, New York, Orlando, Mexico City, Cancun, El Salvador, Panama, Buenos Aires, Ecuador, Peru and Venezuela, plus seasonal service to Dominican Republic, Aruba and Curazao.

JMC processed 8 million passengers through its domestic and international terminals during 2018.


The Plaza Mayor convention center -- owned by the city of Medellin -- reported this month that total events rose to 734 in 2018, up from 539 in 2017 and 480 in 2016.

Of that total, 38 events were international (up from 29 in 2017), 68 were national and 628 local, according to conventional center officials.

Having dramatically expanded its available space three years ago, Plaza Mayor additionally now offers a renovated conference/convention platform featuring “4k” high-definition video technology including “16:10” video screens that generate ultra-high-quality images for conference presentations, the center noted.

Among numerous upcoming events in 2019, Plaza Mayor will host the annual Colombiatex de las Américas textile-industry congress, the “Expofitness” show, the “”Expoinmobiliaria” real-estate industry show, the World Cities Forum (Foro Mundial de Ciudades) the International Avocado Industry Congress, the International Congress on Workplace Accident Prevention, the Colombiamoda international fashion-industry show, the semi-annual FISE electric-power industry conference, the Organization of American States Assembly and the Agrofuturo agricultural industry congress.

Plaza Mayor now receives about 1 million visitors annually and expects to continue growing, thanks to infrastructure upgrades including the soon-to-be-completed expansion of the Yellow Pavilion, according to the center.

The center also recently inked an “alliance” deal with Bogota’s main “Corferias” convention center to share events such as “Expopet 2019,” and also signed deals with IFEMA-Feria de Madrid in Spain and the KOELNMESSE convention organizer in Germany, enabling greater international participation in events held in Medellin.

Over the past 11 years, Medellin has seen 547% growth in international events, while in 2018 alone, such events brought an extra US$47.8 million in revenues to the city, according the city’s Secretary of Economic Development.


The Medellin Mayor’s Office announced December 28 that China-based electric vehicle (EV) manufacturer BYD won a contract bid to provide 64 pure electric buses for the “Metroplus” bus rapid transit (BRT) system in Medellin.

The resulting zero-emissions bus fleet “will be one of the largest in Latin America” and the contract calls for delivery during the second half of 2019.

“After reviewing the economic, technical and financial proposals of four firms specialized in buses, Metroplús awarded the contract for the acquisition of 100% electric vehicles to the ‘Green Medellín’ consortium, made up of the Chinese company BYD Industry Company Limited and BYD Motor Colombia,” according to the Mayor’s office.

“This award, which had a projected scope of at least 55 electric buses, exceeded this figure by nine [bus] units, for a total of 64,” according to the announcement.

The new fleet will have 16 electric recharge points, 300 kilometers range and two hours required for battery recharge, according to the Mayor’s office.


Colombia’s Transport Ministry and its Agencia Nacional de Infraestructura (ANI) infrastructure agency announced December 20 that they've granted a conditional 30-year concession license to the developers of the proposed “Puerto Pisisi” Atlantic freight port at Turbo, Antioquia.

According to ANI, the initial investment would total US$133 million, and when completed the port eventually would handle 1.7 million tons/year of general cargo, containers, solid and liquid bulk materials, vehicles and hydrocarbons.

“Puerto Pisisí is expected to become one of the most representative ports in the Gulf of Urabá, as it is a maritime zone that offers geostrategic conditions for the movement of cargo towards the center of the country,” according to ANI.

“This port is part of the strategy of connecting the country with the world and is complemented by the program of projects of the 4G [fourth-generation] highways that are being executed in Antioquia,” added ANI president Louis Kleyn.

The conditional license requires the Pisisi port developers to sign a construction contract within one year, upon which it could start finalizing its investment plan.

“This terminal expects to mobilize more than 300,000 tons for the first year of operation, until reaching about 1.7 million tons by year 30,” according to ANI.


Medellin’s investment promotion agency ACI -- Agencia de Cooperacion e Inversion de Medellin y el Area Metropolitana -- reported December 21 that foreign direct investment (FDI) in Medellin so far this year has topped US$253 million, or US$11 million over ACI’s initial forecast target.

“These investment projects came mostly from Mexico, El Salvador, Italy, Venezuela, Japan, Spain, Taiwan, the United States, France and Panama and correspond to the economic sectors of tourism infrastructure, health services/life sciences, real estate, food and beverages, manufacturing and ‘fourth-generation’ [high-tech] industries,” according to ACI.

“For the development of these projects, it is estimated that 3,180 jobs were generated,” the agency added.

Meanwhile, foreign-government aid projects to Medellin – mainly from the U.S., the EU, Germany, Switzerland, Sweden, Canada and Japan – targeted education, security, mobility, economic development, environment, social inclusion and “peace building.” These investments topped US$17 million, or US$6 million more than ACI initially expected for 2018.

“Of a total of 1,287 projects and indications of investment intention directed towards Colombia between 2003 and 2018, the majority comes from the United States, Spain, Canada, Brazil, United Kingdom, Chile, Mexico and France, so the recommendation is to strengthen the relationship with these countries through proactive work to attract foreign investment to Medellin,” the agency added.

High-Tech Sector Leads Outlook

On a related front, ACI reported December 20 that a recent joint study by the Medellin Mayor's office and Argentina’s “PRODEM” development agency found that Medellin is becoming a major focal point for high-tech investment.

“In the last three years, the Mayor's Office of Medellín has accompanied about 119,000 people in their ideas of entrepreneurship,” according to ACI.

The joint study was the result of local officials setting a goal that Medellín should become one of the top-three “most-entrepreneurial cities” and the “capital of innovation in Latin America in 2023,” according to ACI.

The study analyzed variables including human capital, entrepreneurial education, culture, business structure, science, technology and information platform, as well as local demand, social capital, financing, local institutional support and local policies and regulations, according to ACI.

"Medellín has an ecosystem of young entrepreneurship that advances and has opportunities for improvement to make the leap towards a new, more dynamic stage,” added Hugo Kantis, director of Argentina’s PRODEM, according to ACI.


Colombian Congress Approves 2019 Tax Law

Thursday, 20 December 2018 11:44 Written by

Colombia President Ivan Duque and Minister of Finance Alberto Carrasquilla on December 19 both hailed final votes in the Colombian House and Senate to approve a revised tax package for 2019.

“The approved bill retains the initial spirit of protecting the most vulnerable population of the country and strengthening the collection through the taxation of the population with the highest income,” according to a Finance Ministry press statement.

The new law “aims to recover investment in the country and allow the economy to grow above 4% [annually], removing the burden on the generators of employment and encouraging investment,” the Ministry added.

Unlike the original proposal, the new law won’t extend the current 19% value-added tax (VAT) on many products to the basic “food·basket” that includes what most Colombians buy every day. However, beer and carbonated soft-drinks – previously exempt from IVA -- will now be hit by that tax.

On the other hand, neither pensions nor certain service contracts will be taxed, contrary to the original tax proposal.

Meanwhile, the new law strengthens the hand of the national tax-collection agency (DIAN) in the fight against tax evasion, including possible prison sentences for evaders.

Responding to a proposal from President  Duque, “tax conditions were created so that companies related to the ‘orange’ economy [high-tech, environmentally ‘green’] could develop, benefiting cultural and technological ventures that generate added value to economic growth,” the Ministry noted.

According to President Duque, the new law “promotes entrepreneurship, simplifying and facilitating the work of micro-, small, medium and large companies, which currently face a huge and inequitable tax burden that does not allow them to grow, and substantially reduces the fiscal asphyxia in sectors generating formal employment.”

Corporate income-tax rates will be gradually reduced from 33% today to 30% over the next four years.

“To increase productivity, VAT will be allowed to be deducted from the investment in capital goods starting in the taxable year 2019. In addition, companies will be able to deduct 50% of the ‘Industry and Commerce Tax’ from the taxable year 2019 and 100%l in 2022. The deduction of 50% of the ‘Lien on Financial Movements’ is maintained,” according to the Ministry.

Meanwhile, a new “SIMPLE” alternative taxation system “seeks to simplify compliance with the tax obligations of legal or natural persons with annual gross income of less than COP$2.75 billion [US$847,500]. Using a single form, they can settle their income tax obligations and ICA [Industry and Commerce Tax], reducing the costs of compliance with their tax obligations and promoting formalization [of employment],” according to the Ministry.

“In addition, SIMPLE system rates for small stores, mini-markets, micro-markets and hairdressers already are included in VAT liability. On the other hand, restaurants will liquidate the consumption tax in the same form,” according to the Ministry.

The new law also includes a 1% tax on assets of more than COP$5 billion [US$1.54 million], while real estate sales valued at more-than COP$918 million [US$282,760] will be hit by a 2% consumption tax, except for rural properties destined for agricultural production.

In addition, the personal income tax rate is increased for people with average monthly incomes greater than COP$40 million [US$12,320].

The extra tax revenues resulting from the new law “will be directed mainly to address the subsidized health system, social programs such as ‘Families in Action’ and the ‘Elderly and School Feeding Program,’” according to the Ministry.


Page 4 of 36

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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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