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Written by November 20 2020 0

Five Israeli high-tech companies in the agriculture sector, the Antioquia departmental government and Medellin’s Agency for Cooperation and Investment (ACI) just launched a new initiative to boost investment and productivity in Antioquia’s booming agricultural-exports sector.

According to a joint announcement from ACI, the Antioquia government and Israeli Ambassador to Colombia Christian Cantor, the initiative aims to further Israel’s world-leading ag-industry technologies and investments in Antioquia, while simultaneously boosting Colombia’s growing and profitable agricultural exports.

The five Israeli companies participating in the launch here in Medellin include:

1. TapKit, “specializing in large-scale hydroponic systems for fresh culinary herbs, micro-greens and vegetables based on its own advanced growing methods;”
2. Agritask, “which offers a platform designed to unite precision agronomy and business intelligence;"
3. ClariFruit, “provider of optimization software solutions for the fresh fruit and vegetable industry;"
4. LR Group, “which operates in the initiation, development, financing, construction and management of medium and large-scale projects in high-growth economies;" and
5. Bean & Co, “a global cocoa company that grows sustainable large-scale cocoa plantations around the world,” according to the joint announcement.

The initiative represents a “fundamental step to further strengthen the competitiveness of the [Antioquia] region in the agro-industrial sector in the lines of precision agriculture, irrigation systems and greenhouses,” according to the parties.

Colombia’s recently approved free-trade agreement with Israel is one of the key reasons for the new initiative -- although numerous Israeli companies have aggressively pioneered investments here in Antioquia and Colombia especially in the last five years.

Commenting on the new initiative, Antioquia Governor Aníbal Gaviria Correa stated: “In these coming years, major transformations of our department’s competitive platform will be consolidated thanks to the construction of fourth-generation [high-speed, high-capacity] highways, the completion of Hidroituango [Colombia’s biggest hydroelectric dam] and the new ports of Urabá [on the Atlantic coast], among others. These works, added to the security and institutional stability here are key elements that allow us to invite investment from Israel and the world to our department and our country.”

Antioquia’s Secretary of Agriculture Rodolfo Correa added that “it is inspiring what Israel does in the modernization of the agricultural sector in areas of organizational models, technology transfer, efficiency and other advances and developments.”

Christian Cantor, Israeli Ambassador to Colombia, added that “agriculture is and will continue to be a main axis of relations between the government of Israel and Colombia. The companies that are presented at this event are among the best companies that Israel has to offer to Antioquia”.

According to the parties, “Antioquia has key products in the agro industry favoring exports and investment including Hass avocados, cocoa, citrus fruits and beef, among other products. In the case of Hass avocados, exports have grown by 40% in just the last four years.”

Managro Hails New Initiative

Asked to comment on the latest initiative, Israeli expat Chagai Stern -- executive director of Medellin-based agricultural investment firm Managro -- added that “we realize and promote the important partnership between Colombia and Israel. We have been doing so since we were established here in Medellin five years ago.

“Colombia has all the natural resources and scale that any country could wish for and Israel has the technology and know-how especially in the agriculture sector. That’s why we believe that the free-trade agreement between Israel and Colombia will only enhance the partnership and collaboration.”

Earlier this year, Managro bought Colombia’s giant “Pacific Fruits” packing and export company near Cali -- boosting capacity for export of ag products including Haas avocados and mangoes.

Pacific Fruits boasts that last year alone, it shipped 250 ocean export containers of Colombian farm products to Europe, Saudi Arabia, Japan, United Arab Emirates and Hong Kong, tapping proprietary production in Antioquia and Valle del Cauca as well as contracts with ag producers in 14 Colombian departments.

As a result, Managro now administers more than 1,000 proprietary hectares of agricultural production including avocados, milk, mangos, lemons, oranges, guanabana, pineapples and corn.

Written by November 15 2020 0

Medellin-based multinational banking giant Bancolombia on November 12 reported a 68% decline year-on-year in third quarter (3Q) 2020 profits, to COP$73 billion (US$20 million).

For nine-months 2020, net income so far this year is down 79.5%, to COP$542 billion (US$149 million), according to the company.

Despite the pandemic-caused decline in earnings, “Bancolombia continues to strengthen its digital strategy with a robust growth in its mobile platforms,” now totaling 8.2 million digital accounts including 4.2 million users of ‘Bancolombia a la Mano’ and 4 million users of the electronic ‘Nequi’ platform, according to the company

As a result, “85% of total transactions are carried out through digital channels” rather than higher-cost, in-person banking, according to Bancolombia.

Gross loans in 3Q 2020 grew 8% year-on-year, to COP$199 trillion (US$54 billion), while loan provision charges soared 133% year-on-year, to COP$1.7 trillion (US$467 million). The coverage ratio for 90-day past due loans was 232%, according to Bancolombia

“This level of provisions was largely explained by the deterioration of the consumer portfolio, Covid-19 and the update of macroeconomic variables in our expected losses models,” according to Bancolombia.

As of September 30, 2020, Bancolombia’s assets totaled COP$265 trillion (US$72 billion), up 12% year-on-year, while liabilities grew 13%, to COP$239 trillion (US$65 billion).

“The increase in total assets during the year is largely explained by the growth in the loan book, interbank borrowings and financial assets investment,” according to Bancolombia.

Total reserves for loan losses increased by 9.7% during 3Q 2020, totaling COP$15 trillion (US$4.1 billion), equivalent to 7.6% of gross loans.

Written by November 13 2020 0

Medellin-based highway construction giant Construcciones El Condor on November 12 reported a 415% year-on-year plunge in third quarter (3Q) 2020 net income, to COP$16 billion (US$4.4 million).

Gross income for 3Q 2020 was down 11%, to COP$565 billion (US$155 million), “explained by the paralysis in the execution of the works on the occasion of the Covid-19 pandemic,” according to the company.

The crisis “implied the non-invoicing during this time and the decrease in the invoicing in the months of May, June and July,” but “as of July [we] had high levels of execution in projects,” according to the company.

Operating costs for the latest quarter hit COP$517 billion (US142$ million), “representing 91.55% of income from ordinary activities, while administrative expenses reached 3.2% of said income,” according to the company.

“Operating costs include idle costs, machinery and equipment stand-by costs and personnel costs assumed by the company 100% during the suspension . . . Once these costs have been recognized in the contractual agreements, the respective recognitions will be made to the executors to bill them for each concession,” the company added.

Earnings before interest, taxes, depreciation and amortization (EBITDA) hit COP$68 billion (US$18.6 million), with an EBITDA margin of 12%, down from 15.75% in 3Q 2019, according to the company.

“Said decrease in EBITDA margin is due again to idle costs due to [Covid-19 shutdown] paralysis. By the end of the year, we expect the EPCs [engineering, procurement and construction contractors] to be able to bill the concessionaires for these costs, which will allow the recovery of the EBITDA margin,” according to the company

As of September 2020, total assets totaled COP$2.29 trillion (US$628 million), while liabilities totaled COP$1.21 trillion (US$332 million), according to El Condor.

As of September 2020, the construction backlog -- the balance of works contracted and to be executed --totaled COP$552 billion (US$151 million), including COP$227 billion (US$62 million) of invoicing executed during the latest quarter, the company added.

Written by November 13 2020 0

Medellin-based insurance and investment giant Grupo Sura announced November 13 that its third quarter (3Q) net profit fell 72% year-on-year, to COP$23.9 billion (US$6.56 million).

Nine-months 2020 net profit likewise fell 73% year-on-year, to COP$397 billion (US$109 million), according to the company.

“The insurance business continued to show resilience, even at a time when the pandemic increased its impact in Colombia, while the asset management business continued to improve the performance of the reserve requirement and the operating trends of the businesses recovered,” according to Sura.

Operating income so far this year has declined 3.3% year-on-year, to COP$15.4 trillion (US$4.22 billion), while 3Q 2020 operating income is down 2% year-on-year, according to the company.

“The growth in written premiums, income from the provision of health services and asset management fees are highlighted. On the other hand, income from investments and by the equity method decreased 28.3% and 67.5% so far this year, but a partial recovery was evident in the third quarter,” the company added.

Operating expenses grew 2.9% as of September and 4.5% in the third quarter, “driven by a normalization of the dynamics of the insurance business, a slight increase in claims, constitution of reserves and costs, and investments made to accompany clients,” according to Sura

The “Suramericana” insurance division recorded a net profit of COP$302 billion (US$83 million) in the first nine months of 2020 and COP$9.4 billion (US$2.6 million) in 3Q 2020 “in one of the most critical moments of the pandemic and facing reopening of economies,” according to Sura.

The health-care portion of Suramericana “offset the impact on claims and expenses associated with the pandemic in the ‘life’ segment,” according to the company.

The Sura Asset Management investment division “continues on a recovery trend and contributed to Grupo Sura’s consolidated results with a net profit of COP$137 billion [US$37.6 million] in the latest quarter and COP$257 billion [US$70 million] so far this year,” according to Sura.

“Positive dynamics can also be seen in the yield on legal reserve and in the income from the equity method of [pension-investment division] ‘Protection,’ which continued the recovery that began in the second quarter.

“Finally, in Grupo Sura (holding company), income from the equity method decreased 69% so far this year, but the positive contribution in the third quarter is highlighted, supported by the results of [equity holdings in] Grupo Nutresa and the partial recovery in the profit of [equity holdings in] Bancolombia,” the company added.

Written by November 13 2020 0

Medellin-based multinational cement producer, electric power generator and airport/highways concessions giant Grupo Argos announced November 12 that its third quarter (3Q) 2020 profits plunged 85% year-on-year, to COP$77.8 billion (US$21 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) for 3Q 2020 likewise fell 39% year-on-year, to COP$857 billion (US$235 million). 

Company divisions include Cementos Argos, Celsia and Odinsa.

As for nine-months 2020, profits are down 83% year-on-year, to COP$166 billion (US$45 million), while nine-months 2020 EBITDA is down 25%, to COP$2.56 trillion (US$702 million), according to the company.

Consolidated revenues so far this year total COP$10.4 trillion (US$2.85 billion) “and grew 16% in September compared to April [2020] , the month most affected by the impacts of the pandemic,” according to Grupo Argos.

“The shock and austerity plan allowed it to achieve consolidated savings in operating expenses of more than COP$500 billion [US$137 million] at the end of the third quarter and to close with COP$1.6 trillion [US$439 million] in cash to face the challenges of the situation,” according to the company.

“During the [latest] quarter, there were non-recurring situations such as extraordinary contributions from the energy business to the Superintendency of Public Services and maintenance in the cement business that together amounted to more than COP$40 billion [US$10.9 million].

“It is also important to highlight that in third quarter of the previous year, Grupo Argos at a consolidated level recorded non-recurring income from the divestment of the Termoflores plant for COP$1.1 trillion (US$302 million),” the company added.

Colombia operations improved in 3Q 2020 versus 2Q 2020 “with the growth of 79% in the volume of cement shipped, the 18% increase in Celsia's power generation and 61% increase in vehicular traffic in Odinsa’s [airport/highway] concessions in the country,” according to Grupo Argos.

“Added to this performance is the robust liquidity position and the timely and solid financial management of the company, which have allowed it to maintain the confidence of the market and execute at the end of October a new transaction to exchange ordinary bonds for a total amount of COP$136 billion (US$37 million).

“This transaction was constituted as the first private debt exchange carried out in the country, representing a milestone in the Colombian capital market.

“So far this year, Grupo Empresarial Argos has issued debt for close to COP$600 billion (US$165 million) and expects to close the year adding debt totaling COP$1 trillion (US$274 million), remaining as one of the agents that enjoy the greatest confidence in the market and as a catalyst relevant to the country's economy,” the company added.

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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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