Thursday, January 21, 2021

Become part of our community


Medellin-based banking giant Bancolombia announced May 11 that 634 of its 684 branches nationwide are now open -- all with Covid-19-avoidance biosafety protocols, with many locations operating from 9:00 am at 4:00 pm daily, but closed Saturdays.

“The curfew decrees and other measures adopted in municipalities and localities of the country will be respected,” according to Bancolombia.

“We will continue with the policy of not allowing more than 50 people to enter a branch at one time” and “the use of face masks is mandatory,” according to the company, Colombia’s biggest bank.

“In all the branches that will be opened, we have installed acrylic shields in the cashier and advisory areas in order to create physical distance between employees and customers.

“We will deliver customer service [queuing] cards up to 15 minutes before the closure of each branch in order to be able to comply with biosafety standards and protocols. We reinforce all hygiene measures and cleaning cycles inside the offices.

“From this date [May 11] we will activate 80% of our commercial team, which has all the protection measures already mentioned. The remaining 20% of the human team of branches will continue in preventive isolation, including people at high risk, such as adults over 60, pregnant women and lactating mothers,” the company added.

“Bogotá will open from 9:00 a.m. to 4:00 p.m. continuously, and a pilot program with these same hours is already operating in Medellín at 23 of the 90 offices in the metropolitan area, in order to test the volume of traffic of employees and customers at times of greater concentration and mobility.”

However, Bancolombia has eliminated Saturday and extended-hours services -- at least for now, the company added.


Colombia-born Avianca -- Latin America’s oldest airline – on May 10 filed for Chapter 11 bankruptcy in U.S. federal court because of the Coronavirus shutdown.

Its majority shareholders today are U.S.-based United Airlines and Kingsland Holdings. For the filing, the company cited US$10 billion in liabilities along with inability to generate income to cover continuing expenses.

“We did this to protect our business while continuing to face the effects of the Covid-19 pandemic, as well as to comprehensively manage our debt and other commitments,” according to Avianca’s official press statement.

“We hope to return to heaven and help you visit, more safely, the people and places they love. Avianca will return to the skies and continue to fly once the travel restrictions generated by Covid-19 are gradually lifted.

“Avianca has submitted requests to maintain its [customer loyalty] client programs throughout this process, so clients can trust to continue organizing trips and flying with Avianca in the same way that they always have.

“Likewise, customers can use the tickets, vouchers and gift vouchers purchased before Avianca started this process. Additionally, they will continue to earn miles when they fly with the airline, and may continue to redeem the miles earned through ‘LifeMiles’ to purchase tickets with Avianca during this process.

“Avianca also hopes to continue issuing ticket refunds and honor travel bonuses and payments or credits associated with baggage or service claims in accordance with its customary policies.

“Subject to government policy, we hope to continue to allow multiple changes, with no penalties or fees for fare differences for previously issued and/or new tickets purchased as long as the original and changed flight is until October 31, 2020. All customers who have booked or are going to buy flights during this period can be sure that they can trust Avianca.

“Tickets purchased through ‘LifeMiles’ mile redemption will continue to be free of penalties until October 31, 2020,” the company added.

Avianca earlier this month was forced to cancel promotion of unauthorized flights inside Colombia because the Colombian government has banned all air travel through at least May 30.

The Medellin Mayor’s Office announced May 10 that starting tomorrow (Monday, May 11), 201,461 more people will return to work here at 12,210 companies newly meeting Health Ministry Covid-19 prevention protocols as well as registration in the high-tech “Medellin Me Cuida” program.

Prior to May 11, Medellin and its neighbors in Valle de Aburrá already had 52,852 companies registered in “Medellin Me Cuida” -- and also approved as meeting biosafety protocols.

“Our purpose from the Mayor's Office of Medellín is to guarantee that all these companies can operate without neglecting the health and well-being of all our inhabitants,” said Medellin Secretary of Economic Development Paola Vargas González.

Qualifying companies and their employees “must register their data on the Medellín Me Cuida platform. Employers must attach the biosecurity protocol, which will be reviewed to verify that the requirements that guarantee the health and well-being of workers are met,” according to the Mayor’s Office.

The computerized “Medellin Me Cuida” program feature big-data analysis, including a “technical table for economic impact measurement,” which now indicates an “urgent need to encourage staggered [work-hours] scheduling strategies in companies in order to avoid crowds in public transport and common places,” according to the Mayor’s Office.

“We are going to work hand-in-hand with the public sector but also with companies and transporters to ensure that employers have all the necessary requirements to protect the employee, that they can be transported safely, and that they can travel to their office if it is strictly necessary,” Secretary Vargas added.

Medellin Leads All Colombia in ‘Smart’ Covid-19 Response, Controls

While Bogota, Cali and other cities poorly struggle to cope with Covid-19, Medellin once again leads all Colombia in “smart” technology and “smart” public policy – with exceptionally low rates of Coronavirus infections combined with relatively successful, well-organized, gradual economic reopenings -- without political demagoguery.

As of May 9, Colombia’s Health Ministry had recorded 10,495 Coronavirus cases nationally, with 445 deaths and 2,569 recoveries. Bogota has nearly 40% of all cases (4,028) followed by Cali/Valle del Cauca (1,320) and then Medellin/Antioquia (466 cases, including six deaths, 335 recoveries and a 77% recovery rate so far).

In a May 8 report from Bogota daily newspaper El Tiempo, Medellin Mayor Daniel Quintero and other local experts explain why Medellin has had such unusual success in Covid-19 control.

One key to success is sophisticated “big data” analysis of the 2.2 million individuals and 800,000 families registered in the “Medellin Me Cuida” database, which among things enables tracking of people to-and-from the tens of thousands of workplaces included in the computer program.

The report quoted Dr. Carlos Agudelo – infectious disease specialist at the Clínica Universitaria Pontificia Bolivariana here – as saying that Medellin not only moved relatively quickly to enforce quarantine at an early stage, but also aggressively tracks and studies every outbreak of contagion, especially originating at sites of notable crowding.

Thanks to this program, people infected were interviewed promptly to see what other contacts they had recently, which enabled early testing and isolation of more potential spreaders of disease.

Statistically, Medellin’s “smart” response to these early infections was nearly four times greater than in Bogota and more than three times greater than the national average, Agudelo explained.

Mayor Quintero added in the same report that “through epidemiological fencing exercises, we have managed to keep this [infection growth rate] curve low.”

For example: The “Medellin Me Cuida” database enables local health officials to “pick up the phone and call a person who is over 70 and who has hypertension and lives with someone who is working in a department store. With that information, when there is a [Covid-19] case we can test not only a first circle of related people, but up to five circles around, and even a block, to try to find positive cases,” Quintero was quoted as saying.

“From the first infection [detection], we began to practice examinations at home, instead of telling people to go to clinics. Then we start continuous monitoring, with daily calls.

“This helps us not only to know if the person is well, but if, in fact, he is at home. We call him and ask him to pass the phone to his mother, his brother, and [if] they did not pass [the phone to] someone, we immediately made an inspection visit. This includes in some cases putting plainclothes police outside the houses,” he added.

Colombia’s national infrastructure agency (Agencia Nacional de Infraestructura, ANI) announced May 10 that excavation of the second tube of the “Tunel de Occidente” connecting Medellin westward to Santa Fe de Antioquia will be complete by October 2020.

The 4.6-kilometers-long, COP$420 billion (US$108 million) tunnel will enable four lines of divided highway as part of the “Mar 1” project linking Medellin to current and future Atlantic ports. The existing highway tunnel is restricted to two-way traffic on single lanes and suffers much congestion.

“The construction of the second tube of the Occidente tunnel has already registered a 75% progress in its excavation,” according to ANI. “It is expected that the tunnel staging or meeting of the two work fronts will take place in October 2020.”

Following national Health Ministry regulations, “all necessary preventive measures have been implemented for the care of workers defined in the biosafety protocol” to avoid Coronavirus infections, according to ANI.

Tunnels works continue 24 hours daily, seven days a week, employing “Jumbo Boomer XL3” robotic drilling technology, according to ANI.

“To date, a total of 3,456 meters have been excavated, 1,622 meters at the Medellín portal and 1,834 meters at the Santa Fe portal,” according to ANI.

Following excavation, next come paving, roofing, lighting, ventilation, safety and mechanical works in 2021 and 2022, with final completion expected by the end of 2022, according to ANI.

Including the tunnel expansion, the total “Mar 1” highway works are already 61% complete, added ANI executive vice-president Carlos García.

“Mar 1” not only includes the new tunnel and new four-lane highways between Medellin and Santa Fe de Antioquia, but also another 62 kilometers of highway upgrades between Santa Fe de Antioquia Cañasgordas, then connecting to “Mar 2.” A new, 426-meters-long bridge over the Cauca river connecting the Mar 1 highway project with the under-construction “Toyo” tunnel (Colombia’s longest) is also included.

Once complete, “Medellín and the coffee region will have a new alternative to go more quickly to the Caribbean Sea and the ports of Urabá. Today, a car takes eight hours to travel from Medellín to Necoclí, but with the Mar 1 and Mar 2 projects, this route is reduced to four hours,” according to ANI.

What’s more, the Mar 1 and Mar 2 projects -- together with the under-construction 'Autopistas Pacífico 1, 2, 3' highways -- “will facilitate foreign trade to and from the coffee region. Currently, the journey time in a truck from the coffee region to Urabá is 21 hours, but with the construction of these projects it will be reduced to 12 hours,” according to ANI.

Area Metropolitana del Valle de Aburra (AMVA) – the regional coordinating agency for Medellin metro governments – announced May 8 a new rotation schedule for “pico y cedula” shopping trips starting May 11 and then  another, new rotation on May 18.

As a result, people with Colombia cedula numbers ending in 7 or 8 can venture out on Monday, May 11, while people with cedulas ending in 9 and 0 can venture out Tuesday, May 12, with successive day/number rotations according to the AMVA chart (see above).

The "pico y cedula" regulation aims to reduce potential for Coronavirus cross-contamination in otherwise-crowded supermarkets, pharmacies, banks and -- starting May 11 -- certain other quarantine-exempt locations during the national Coronavirus crisis. Workers in quarantine-exempt industries that meet biosafety protocols and also are registered with the "Medellin Me Cuida" program aren't limited by "pico y cedula," according to AMVA.

Then, on Monday, May 18, a new rotation series starts, with cedulas ending in 2 or 3 authorized for shopping trips on that Monday, while people with cedulas ending in 4 or 5 can venture out on Tuesday, May 19, and then successive numbers/days (see chart above).

The “pico y cedula” restriction applies to Medellin, Barbosa, Itagüí, Caldas, Sabaneta, La Estrella, Envigado, Bello, Copacabana and Girardota, according to AMVA.

Under new Colombia government regulations taking effect May 11, “pico y cedula” gives people new options to go to bookstores, office-supply stores, hardware stores, pet stores, paint stores, glass stores, lumber suppliers, locksmiths, vehicle repairs and inspection stations, in addition to existing permissions for grocery, banking, clinic and pharmacy trips.

The Viva Malls subsidiary of Medellin-based Grupo Exito announced May 7 the launch of “Viva Online” (see: so that quarantine-bound customers can order dozens of commercial products -- and then either pick them up at designated, virus-free mall sites or else have them safely home-delivered.

“Viva Online will offer shopping experiences with more than 50 brands, as well as virtual entertainment activities for all tastes,” according to a press bulletin from Grupo Exito.

“With the new service, Viva will make life easier for its clients, bringing them the brands and preferred products to their homes under the most rigorous biosecurity measures.

“Additionally, we have brand implemented the ‘Buy and Collect’ model in 12 of our shopping centers in the country. Through this service, orders are delivered directly to the customer’s means of transport [cars] and to specific areas designated for this purpose,” according to the company.

“We transcend the physical spaces of the shopping malls and we enable a virtual space that mixes the shopping experience, with differential and exciting activities for our clients,” said Juan Lucas Vega Palacio, Grupo Exito real estate vice president.

“In addition, we put Viva online at the service of other brands of entrepreneurs and small companies that are not necessarily in the shopping centers and that do not have e-commerce platforms, which will allow them to become visible and offer their products directly to end customers,” he added.

With the “Domicilios Viva” home-delivery service, some 100 brands can now reach the customers’ place of residence, according to the company.

“People place their orders through the WhatsApp line 3052232795 and the products are delivered to the place of choice, with multiple payment alternatives,” according to Grupo Exito.

“This new service, which has a coverage of three kilometers around each shopping center, is already operating in Viva Envigado and Viva Palmas [both in the Envigado suburbs of Medellin] and soon it will be implemented in seven more shopping centers in the country including Viva Laureles in Medellín; Viva La Ceja in eastern Antioquia; San Pedro in Neiva, Viva Barranquilla, Viva Tunja, Viva Villavicencio and Viva Wajiira in Riohacha,” according to the company.

ANDI Connects 25,000 Grocery Stores to Online Supplies

On a related front, Colombia’s biggest national industrial/commercial trade association ANDI announced May 8 a new wholesale online order-and-delivery alliance with Grupo Meiko’s “SúperVecino” neighborhood grocery-supply network.

The SúperVecino network (see: enables thousands of local neighborhood grocery stores to order online and then receive deliveries directly, thus avoiding making trips to crowded (and hence potentially infectious) grocery wholesale supply centers in Medellin and other large cities.

“This initiative aims to offer an alternative in such a way that shopkeepers avoid going to the supply centers, reducing the risks of contagion and being able to continue their businesses and guarantee the income of their families. At the same time, the model supports rural producers and supply centers with the purchase of their foods,” according to ANDI.

“Since the beginning of the restriction of economic activity, we have been working on various alternatives to give continuity to some productive and commercial activities, while avoiding health threats. In addition to this [grocery wholesale] model, we are working with other ANDI sectoral commercial chambers on the implementation of [online order-and-delivery] of other products,” added ANDI President Bruce MacMaster.

The new system “supports the entire supply chain from producers who find a new sales channel on the platforms, to shopkeepers who can order online, choose the supplier and sustain their businesses without putting themselves at risk,” ANDI added.

In yet another effort to shore-up Coronavirus-crisis business liquidity, President Ivan Duque and Finance Minister Alberto Carrasquilla unveiled May 6 two new programs for payroll subsidies as well as income-tax-payment deadline delays.

Under the latest “declaration of economic emergency,” all employees of micro, small, medium and large companies here that have suffered sales declines of at least 20% in April 2020 (versus April 2019) will each get a COP$350,000 (US$90) direct transfer from the government for the next three months.

That payment – estimated to benefit some 6 million Colombia workers -- is equivalent to 40% of the current Colombia minimum wage, President Duque explained.

In addition, the government will postpone the second regular payment of corporate income tax (normally at end-May) to end-2020, helping companies conserve cash to meet payroll and other expenses.

Finance Minister Carrasquilla added that the new worker/business subsidies -- totaling about COP$6 trillion/US$1.5 billion) -- come on top of other Coronavirus-crisis programs that have already enabled companies to restructure on more-favorable terms outstanding loans equivalent to nearly COP$150 trillion (US$38 billion), helping to save millions of jobs.

“Of course, we would like to finance the entirety of payroll [of Cornavirus-slammed companies], but we don’t have enough money for that,” Carrasquilla explained, citing fiscal limits.

Nevertheless, the new program will cover “a very significant percentage of payrolls for the next three months,” especially for micro, small and medium-sized businesses, he added.

To qualify for these grants, companies will have to document through an auditor or accountant their actual payrolls -- and prove payment to workers each month via the mandatory “PILA” employee-benefits platform here, he added.

As for the income-tax payment delays, “companies that do not have cash can hardly pay those taxes, and if they fall into default they generate [bigger] problems later, which we want to avoid,” Carrasquilla added.

Medellin Chamber of Commerce Proposals

Meanwhile, in a new presentation to a Medellin Chamber of Commerce for Antioquia (MCCA) economic-outlook forum, former Inter-American Development Bank chief economist Eduardo Lora explained that a huge challenge facing not just Medellin but also Colombia is to generate more formal, tax-paying and benefits-generating employment -- in the wake of Coranavirus crisis.

Colombia needs to generate at least 4 million more formal-sector jobs quickly, MCCA quoted Lora as saying. Such a development not only would improve living conditions for workers but also would shore-up Colombia’s tenuous fiscal situation by generating tax revenues.

However, the Coronavirus crisis instead is causing just the opposite, as millions of people lose income -- and temporarily lose jobs -- while about 10 million more people here are working fewer hours. “These are huge numbers like never before,” Lora said.

To get Colombia back on track, Lora proposed that the government temporarily subsidize formal employment via a mix of policies that would reduce unemployment and stimulate demand.

Beyond that, tax reform is needed to “define how the debts we have today are paid in the future,” he said. What’s more, cities need to think more profoundly about the total impact of promoting telecommuting and teleworking -- as is now mandated during the current crisis for office employees.

While Lora added that Colombia is unlikey to see a return to the growth rates of 2019 before 2023 or 2024, former Commerce Minister Jorge Humberto Botero added in a separate presentation here that the Colombian economy could contract by 5.5% this year -- worse than the 4.5% contraction in the 1999 economic crisis.

In another presentation, Universidad de los Andes professor Sergio Clavijo predicted that Colombia GDP growth in the first quarter of 2020 might be around 2%, but would fall into negative territory for full-year 2020.

Beyond coping with the current crisis, government also needs a longer-term refocus on converting some 9 million Colombians in the informal sector to the formal jobs sector, Clavijo added.

At the same forum, former Colombia Agriculture Minister Juan Camilo Restrepo added that the Coronavirus crisis currently is estimated as costing Colombia at least COP$53 trillion (US$13.5 billion).

To recoup fiscal losses that accompany such economic crises, government can’t just raise taxes, since that would kill even more tax-paying business and hence kill more tax-paying jobs, he said.

Instead, “everything points to the fact that the government is going to have to [recoup losses] by borrowing more and raising the public debt,” hence postponing fiscal balance recovery into future years.

EPM general manager Álvaro Guillermo Rendón López confirmed in a televised May 7 address that the company continues to aim for a December 2021 startup of its US$5 billion, 2.4-gigawatt Hidroituango hydroelectric plant in Antioquia.

In his address, Rendón revealed that the Hidroituango project is now 77.8% complete, with COP$11 trillion (US$2.8 billion) already invested so far.

The first power turbines at Hidroituango would begin to generate electricity in December 2021 -- provided that Colombia’s environmental licensing agency (Agencia Nacional de Licencias Ambientales, ANLA) gives timely approval, Rendón said.

Following that, EPM would start-up additional turbines every three or four months in 2022 and beyond, until the full 2.4-gigawatts output capacity is reached – again, assuming timely ANLA approvals.

Meanwhile, EPM’s recent acquisition of the “CaribeMar” power network in the Atlantic coast region will be ready for complete takeover and operational startup in September 2020, he said.

“In the period 2020 to 2023, we seek to modernize the organization and improve relations with our customers and users through continuous improvement in service, information technologies and the development of ‘smart’ cities,” Rendón said in his address covering highlights of EPM’s first 100 days of operations so far this year.

The acquisition of CaribeMar – adding 1.5 million more power customers in Bolívar, Cesar, Córdoba and Sucre departments -- will increase EPM’s national distribution/commercialization market share to 35%, he noted. That makes EPM the biggest electric power player in all Colombia.

So far in 2020, EPM has completed 96% of its scheduled infrastructure projects (totaling COP$465 billion/US$118 million) to date, including entry-into-operation of new electrical infrastructure projects in Urabá and Medellín, plus upgrades at power plants, he said.

Meanwhile, over the next four years, EPM plans to invest another COP$7 trillion (US$1.8 billion) in infrastructure -- and simultaneously find innovative ways to overcome potential effects of the Coronavirus crisis, he said.

Currently, EPM serves nearly 20 million people with power, water, sewage treatment, natural gas and waste management utilities through 44 subsidiary companies in six Latin American countries: Colombia, Mexico, El Salvador, Guatemala, Panama and Chile, Rendón noted.

“In 2019 we invested COP$3.2 trillion [US$816 million] in infrastructure and operating assets and distributed COP$10.4 trillion [US$2.65 billion] in value to stakeholders, which translates into more social investment, job creation and quality of life for more people,” Rendón said.

“The financial results obtained in 2019 allow transfers to the municipality of Medellín of COP$1.5 trillion [US$383 million] during 2020 -- a year where the city faces effects caused by the Coronavirus pandemic,” he added.

In 2019, the EPM Group reported progress in  universalization of public utility services in its Colombia markets, reaching 96.43% of its market-area homes with electric power; 85.84% with natural gas; 95.75% with potable water supply; 93.5% for wastewater removal; and 99.28% for solid waste disposal, he said.

Meanwhile, EPM continues to lead all Colombia -- and even much of the developing world -- with innovative programs to bring affordable public services to poorer people, Rendón noted.

“With innovative social solutions, the business group enabled access to energy and water under the ‘prepaid’ modality, for those who due to their income conditions find it difficult to access these services,” according to the first-100-days 2020 report.

“In 2019, 26,747 families began to enjoy prepaid energy in the EPM, CENS and ESSA companies, with a total of 317,618 clients and users since 2007. Last year, in the ‘Agua Prepago’ program, we added 2,834 new clients and users in Valle de Aburrá [metro Medellin], for a consolidated total of 25,211 clients and users since 2015.

“With ‘pay as you can’ [installments] program, in 2019 we had 40,297 new clients and users in EPM, CENS and ESSA divisions. Since 2014, when the program was launched, the beneficiaries have amounted to 209,437,” the company added.

Medellin-based electric power giant Celsia announced May 4 that first quarter (1Q) 2020 net income rose 38% year-on-year, to COP$86.7 billion (US$21.8 million).

Consolidated revenues for the quarter rose 1% versus fourth-quarter 2020, to COP$928 billion (US$234 million). Colombia revenues represented 84% of the total, with Central America operations accounting for the remaining 16%.

Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) dipped a slight 0.2% year-on-year, to COP$330 billion (US$83 million). Colombia contributed COP$290 billion (US$73 million) while Central America contributed COP$40 billion (US$10 million).

Consolidated debt at the end of the latest quarter came to COP$4.3 trillion (US$1.08 billion) with a leverage indicator of 3.2 times net debt to EBITDA, according to Celsia.

“This quarter the organization disbursed credits of COP$200 billion (US$50 million), of which COP$160 billion (US$40 million) was disbursement to maintain financial flexibility during Covid-19 crisis and COP$40 billion (US$10 million) to continue with the development of the 20-megawatt San Andrés de Cuerquia, Antioquia [hydroelectric plant] and the Comayagua solar farm in Honduras,” according to the company.

Covid-19 Response for 2020

As for the remainder of this year, “Celsia redirects priorities for 2020 and concentrates its efforts on supporting our clients in Valle and Tolima [departments], supporting SME [small and medium-size enterprise] suppliers and protecting direct and contractor employment” during the Covid-19 crisis, according to the company.

“As part of the initiative, this month around COP$44 billion [US$11 million] was paid in advance to more than 350 suppliers in Colombia, including individuals, small and medium-sized companies and critical suppliers.

“With these resources we hope that our suppliers have sufficient liquidity to maintain their operations and to defend the jobs that they themselves generate.

“Likewise, for the next three months, these same suppliers will receive their invoice [payments] on faster terms than those initially agreed in the contracts.”

Meanwhile, Celsia “reconnected all clients who had service problems for various circumstances [and] suspended disconnections while the required [Coronavirus quarantine] isolation lasts.

“We had an operational plan to attend to the essential circuits that serve hospitals, health centers, prisons, nursing homes, aqueducts, among others.

“Likewise, our commercial offices were temporarily closed and we strengthened the digital channels for customer service and support, designing payment facility schemes and implementing payment deferral plans that have been established jointly and with the support and leadership of the national government.

“Faced with the provisions established by the national government related to energy billing in the regulated market of users from strata 1 to 4 [low-to-medium income customers], we have carried out the following actions:

“1. Due to the voluntary implementation by the company of the mechanism called tariff option, in that market the energy tariff in Tolima has increased 1.2% between January and April. The energy rate is frozen for the next four months.

“2. In Valle del Cauca, the rate for our users has increased 6.1% so far this year, due to energy costs in the wholesale market. However, since March there have been no new increases in the rate.

“3. The company is applying payment reliefs for invoices to regulated customers in strata 1 to 4 established by the national government. These reliefs are in addition to the subsidies received by strata 1, 2 and 3 of 60%, 50% and 15%, respectively.

“For strata 1 and 2, the unsubsidized value of the energy service from the bills for April and May, up to subsistence consumption, will be deferred for up to 36 months at a rate of 0%. If the client makes payment of the total invoice for April and May in a timely manner, then the client receive a 10% discount. These resources will be disbursed to the company by Findeter and have a guarantee of payment from the nation.

“The additional value against subsistence consumption for these two strata may also be deferred at the same term, but with a preferential interest rate.

“For strata 3 and 4, the cost of the energy service may be financed in 24 months at an interest rate equivalent to inflation. These resources will also be disbursed by Findeter in a rate structure compensated with the assistance of the Ministry of Finance.

“For clients of strata 5, 6, businesses and industries, the company has established options to define payment agreements that provide support during quarantine,” Celsia added.


The Coronavirus crisis continues to slam companies as Medellin-based cement/concrete multinational Cementos Argos reported May 6 that its first quarter (1Q) 2020 net income dropped 73% year-on-year, to COP$18 billion (US$4.6million).

Corporate-wide cement sales dropped 6% year-on-year, while ready-mixed concrete sales declined 16% as a result of the crisis.

Earnings before interest, taxes, depreciation and amortization (EBITDA) also dipped 5.3%, to COP$343 billion (US$86 million), according to the company.

In Colombia, cement sales fell 14% year-on-year, while ready-mix concrete declined 19.5% and aggregates sales slumped by 60%. As a result, Colombia gross revenues for 1Q 2020 fell 6.1% year-on-year, according to the company.

Reacting to the downturn, Cementos Argos announced a “Project Reset” plan aiming to save "between US$75 million and US$90 million in 2020” in order to “address the impact of Covid-19 on the Argos operation.”

“Additional savings arise from a reduction in capex of US$40 million for the current year,” the company added.

“With the company's strong cash position, the savings initiatives within ‘Reset,’ the support of our stakeholders and the passionate commitment of our more than 7,000 employees, we firmly believe that Argos is fully prepared to face the current conditions of the market,” said Juan Esteban Calle, CEO of Cementos Argos.

Cement and concrete sales-volume declines “were affected by the value recovery strategy successfully implemented in Colombia” as well as “adverse weather conditions in the U.S. region” along with “quarantines and market damages due to the Covid-19 outbreak in Colombia, in the Caribbean and Central America,” according to the company.

Colombia Results, Outlook

In Colombia, “Argos estimates that the impact of Covid-19 on its EBITDA derived from the [Covid-19] containment measures was around COP$35 billion [US$8.8 million]. In order to face this difficult situation, and to prepare the company for gradual recovery that the markets will experience in the coming months, Argos has launched ‘Reset,’” according to the company.

“Cement and concrete shipments decreased 13.9% and 19.5% respectively, in yearly terms. These results were affected by the value recovery strategy carried out successfully during the first quarter of the year, as well as by the decreed quarantine by the Colombian government as of March 25, reducing our working days by 8% during the quarter.

“During the quarter, clinker and cement imports decreased by 35.3% and 56.1% respectively compared to 1Q 2019, which, together with the growth of the market during January and February allowed us to continue improving prices in the segment of cement, ending with an increase of around 13.5% compared to 1Q 2019.

“The [quarantine] closure measure for infrastructure sector was lifted on April 13, and for the residential and commercial sectors on April 27, which allowed us to begin the restart of our operations.

“As of the date of this report, the [Colombia highway infrastructure] business shows a positive trend with a recovery in volumes of around 50%. The industrial business, as expected, will experience a slower recovery given the strict protocols that must be followed to reopen construction sites.

“In general, shipments made during April have doubled our initial market expectations, significantly improving our scenarios in the region.

“Additionally, the devaluation of the Colombian peso generated an increase in the [import] parity price, adding more space for our strategy of value recovery amid gradual market recovery.

“Regarding the outlook for this year, we recognize the early steps taken by the government to successfully contain the contagion curve and, in that sense, we expect a prompt revival of the economy, recognizing the challenge that this represents in a scenario of low oil prices and currency devaluation.”

USA Outlook

Beyond Colombia, “we remain positive about the medium-term outlook in the USA region, but we recognize the possibility that there may be short-term market effects due to the impact on the economy due to the Covid-19 outbreak,” according to Cementos Argos.

“We have experienced a slowdown in the residential segment and we expect this trend to continue given the deterioration in monthly statistics on housing starts, housing permits and unemployment. In the commercial segment, similar damages could arise as evidenced in the deterioration of the ‘Architectural Billing Index.’

“In infrastructure, we foresee short-term impacts derived from the liquidity shortage both at the [U.S.] state level as in the whole country, but we expect a rebound in the medium term supported by government initiatives to promote this sector. Public spending in March presented a 7.9% increase, in line with our expectations.”

Central America/Caribbean Outlook

Revenues and EBITDA in 1Q 2020 for the Caribbean and Central America decreased by 16.9% and 33.5%, respectively, according to Argos.

“General results in the Caribbean and Central America region continued to decrease partly due to the market slowdown caused by the Coronavirus, but mainly due to the prices in Honduras that continue to be lower than the 2019 average price and the challenging environment of the construction sector in Panama,” according to the company.

“In that sense, cement volumes and ready-mix concrete volumes decreased 4.1% and 34.1% compared to the same period in 2019.

“The Panamanian government has demonstrated its willingness to boost the local economy and protect national production by imposing a 30% tariff on cement imports into the country. We hope that this measure will be evaluated and implemented by other countries in the region, given the current market conditions and its impact on local economies.

“In Honduras, we inaugurated solid-fuel storage in the north of the country and supplied 11.6% of the energy consumed by the Piedras Azules plant in 1Q 2020 with a solar-power farm operated by Celsia, with the aim of reducing our costs. With this solar farm, we also reduced CO2 emissions from our energy supply by around 1,500 tonnes during 1Q 2020, in line with our commitment to sustainability,” the company added.

Page 13 of 64

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
  •  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