Coltejer to Abandon Giant Medellin-Metro Factory, Shift Remaining Operations to Rionegro
Medellin-based textile giant Coltejer revealed in a December 17 filing with Colombia’s Superfinanciera oversight agency that it now plans to abandon its foundational factory in the southern Medellin suburb of Itagüí.
When this abandonment is complete, all remaining textile operations will shift to Rionegro, Antioquia, according to the company, founded in 1907 by pioneering industrialist Alejandro Echavarría Isaza, his son Gabriel and five nephews.
Echavarría not only became Medellin’s most famous industrialist of the era, but also a crucial social benefactor with the founding of the Hospital San Vicente de Paúl complexes.
Echavarría later bought Medellin’s most famous castle-style residence, “El Castillo,” today a museum and event center owned by the city of Medellin.
Coltejer faced the first of many future financial crises in 1974 when world-wide textile manufacturers went overboard on production, resulting in below-cost contraband trade to Colombia. Such contraband has continued ever since, causing huge financial losses to Colombia’s textile producers generally and Coltejer specifically.
In 1978, Medellin-based industrial giant Carlos Ardila Lulle bought the majority of shares in the company, but he couldn’t reverse its fortunes. Then, in 2008, Mexican textile giant Grupo Kaltex became the majority shareholder, trying to find financial synergies.
According to yesterday’s filing with Superfinanciera, Coltejer’s board of directors have finally given-up on the historic Itagüí plant, selling it to real-estate developer Acierto Inmobiliario SA. As a result, Coltejer now plans to move its remaining operations to the Rionegro plant — tied to modifying certain outstanding credit arrangements with Grupo MCM Colombia S.A.S.
The credit rearrangement deal is tied to “canceling some guarantees that were in favor of [MCM] in order to replace them with properties located in the municipality of Rionegro. Mr. Rafael Kalach [president of Kaltex] abstained from voting on this proposition,” according to Coltejer’s filing.
“In accordance with the negotiation of a part of Coltejer’s land in Itagüí, the industrial operations of the plant [in Itagüí] will be discontinued, leaving the Rionegro plant in operation,” according to Coltejer.
Lands occupied by Coltejer’s factory complexes in Itagüí – now scheduled for non-industrial redevelopment — are valued at COP$178 billion (US$52 million), according to the filing.