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Written by September 10 2021 0

Medellin-based textile giant Coltejer revealed in a September 9 filing with Colombia’s Superfinanciera oversight agency that it has decided to shutter all operations for what remains of 2021 -- and hinted of even more drastic, permanent measures coming.

“The suspension of productive activities will continue for the rest of this year 2021,” according to Coltejer.

“To date, the management team is analyzing some strategic issues that would allow it to reactivate some operations during the year 2022, among which we can highlight the following:

“a. The sale of fixed assets and product inventory.
“b. Real estate rental offer.
“c. Analysis of marketing strategies regarding the industry, clients, competitors and other market variables, which allows us to determine the relationship between the supply and the demand for textile products according to the capacity of the company.”

The Superfinanciera filing concludes with this ominous-sounding note about the company’s future: “We thank our suppliers, employees and other collaborators for all the support that they have given us.”

Coltejer and other major textile suppliers in Colombia have been suffering huge losses due to below-cost and contraband textile imports mainly from China and elsewhere.

The company racked up more red ink in second-quarter 2021 (see Medellin Herald 08/18/2021), shut down its non-woven fibers production in July (see Medellin Herald 07/16/2021) and announced closure of its historic, foundational factory in Itagüí last December (see Medellin Herald 12/18/2020).

Written by September 09 2021 0

The U.S. Agency for International Development (USAID) announced September 6 that it’s teaming-up with France-based Elite Chocolate to train women from the Embera Eyabidá ethnic group here in Antioquia on specialized production and export of organic cacao for gourmet French chocolate.

According to USAID, “the cacao grown by women from the Embera Indigenous Council of Mutatá, Antioquia, begins to take its first steps to enter the French market.”

The initiative -- part of USAID’s Páramos y Bosques (highlands and forest) conservation program -- “facilitated a commercial alliance between the [Embera Council] and the French company La Finca Brava, whose business is to find the best cacao in Colombia to produce gourmet chocolate,” according to the agency.

“The initiative was joined by Elite Chocolate, a French organization that supports product markets in vulnerable communities,” according to USAID.

According to the partners, “the [Colombian] Pacific cacao has very special characteristics of flavor and aroma that come from the soil, the vegetation and the jungle, hence its high national and international demand. These characteristics, added to the organic process with which it is grown and upgraded, make it a highly desired product in specialized markets.”

To launch the initiative, three Embera women -- Laura Marcela Suescun Goez, Gloria Esther Bailarin Domico and Argelia Bailarin Bailarin (see photo, above) -- are traveling to France this month for 10 days of special training on production of specialty cacao, while also learning from French master chefs about gourmet chocolate production.

Back in Mutatá, Antioquia, other Embera women and their husbands subsequently will learn the same techniques and employ only the best raw materials, according to the project partners.

“It is projected that by 2022 the indigenous council of Mutatá will send the first quantities of organic cacao and later the product will be transformed into chocolate bars,” according to USAID.

Cacao production is just one of the commercial activities for the Embera de Mutatá Council, which currently guards 34,000 hectares of tropical forest dedicated to a “REDD+” project (Reduction of Emissions derived from Deforestation and Forest Degradation), supported by USAID.

The specialty cacao project not only will help boost the economy of the Embera community but also help master French chocolatiers and pastry chefs to produce the finest gourmet chocolates, according to La Finca Brava manager Gregory Le Heurt.

French consumers currently devour an astounding 36,000 tons of chocolate every 15 days -- the equivalent of two-thirds of Colombia’s entire annual production of cacao, Le Heurt added.

Written by September 09 2021 0

Colombia’s Commerce Ministry revealed this month that foreign direct investment (FDI) here skyrocketed by 62% in second quarter (2Q) 2021, on top of an impressive 17.6% year-on-year rise in gross domestic product (“PIB” in Spanish initials) during the same quarter.

One of the companies that is helping to spark this rebound is Medellin-based agricultural investor/producer/exporter Managro, simultaneously boosting both FDI and vital Colombian exports, thanks to Israeli capital, sophisticated management, high technology -- and admirable corporate social responsibility.

Honoring Managro’s efforts, Colombia Vice President Martha Lucia Ramirez, Israeli Ambassador Christian Cantor, Colombia Vice Minister of Agriculture Juan Gonzalo Botero, ProColombia President Flavia Santoro, Finagro Vice President Rodolfo Bacci and other top officials made a special trip last month to the recently renamed “Managro Fresh” produce packing-house in Valle del Cauca.

In her presentation, Vice President Ramirez specifically praised Managro’s Medellin-based executive director -- Israeli expat Chagai Stern -- for Managro’s novel innovations, big investments and positive contributions to Colombia’s economy.

For example: Managro just exported another 18-tons of Colombian avocadoes to South Korea, on top of a 20-tons shipment earlier this year.

Having purchased the former Pacific Fruits International packing house in 2020, Managro Fresh is now one of the biggest produce packers in Colombia -- with big plans for future growth, as Stern revealed to Medellin Herald in the following interview:

Medellin Herald: The Covid-19 quarantine in 2020 and the ‘Paro Nacional’ strike in 2021 as you know caused both health and economic hardships among Colombians and the entire world. Can you comment on what impact the quarantine and the strike had on Managro?

Stern: The pandemic didn't affect much the business. Though restaurants were closed, people eating at home were more conscious of eating healthy -- and the demand for avocado actually increased.

The strike did cause a lot of damage. No trucks were able to come to our facility and we lost seven containers of produce that were stored in our cold room. We couldn't even donate them as no trucks were able to get to us. The economic damage of the strikes was over US$1 million to us. In addition, many farmers lost their crops as they couldn't harvest and transport them to any packing house.

Medellin Herald: Now that the strike seems to be mainly quieted if not entirely settled, are you more confident about boosting production and exports of Managro products this year and next?

Stern: We are planning a major investment of buying 3,800 hectares for avocado. We are importing our own genetics and using Israeli software technology and irrigation system. The investment will allow us to export 2,200 containers a year of our own production in five years. The investment is US$60 million.

We are also coming out with new initiatives of social programs like ‘Mana Allies’ where we supply the farmers with monthly finance, technology-- what we call ‘Agritask’ -- and expertise.

Medellin Herald: While nobody could anticipate the 'Paro Nacional' road blockades that caused so much losses of fresh produce and farm products here, is there any sort of insurance for companies like Managro to help manage such losses?

Stern: Unfortunately there are no insurances for this.

Medellin Herald: Did the Colombia government offer any programs that helped Managro keep people employed during these crises of 2020-2021, and helped reduce some of the inevitable corporate revenue losses?

Stern: During the strike, the government gave us an option to freeze the contracts of our workers. Of course we did not take that option. Workers put their trust in our company for financial security and we didn't let them down. All of our workers got fully paid.


Written by September 02 2021 0

Medellin-based highway/airport concessionaire Odinsa – a division of cement, electric-power and concessions conglomerate Grupo Argos – announced this morning (September 2) a strategic alliance with Australia-based global infrastructure giant Macquarie Infrastructure and Real Assets (MIRA) and its affiliate Macquarie Infrastructure Partners-V (MIP-V).

According to Odinsa, the new alliance “will create an investment platform for road assets in Colombia and the region.”

Under the deal, Macquarie and Odinsa will create a private equity fund that will assume control of Odinsa’s highway concessions in Colombia and also jointly develop new projects.

“The investment platform would manage Odinsa’s current highway assets in Colombia, including Concesión La Pintada S.A.S., Concesión Túnel Aburrá Oriente S.A., Autopistas del Café S.A. and Concesión Vial de los Llanos S.A.S., with a consolidated valuation close to COP$4.3 trillion [US$1.14 billion],” according to Odinsa.

The new platform also would manage Odinsa’s private highway initiatives in Colombia including the “IP Perimetral de la Sabana” and the “IP Conexion Centro” projects, as well as the planned expansion of the existing “Túnel Aburrá Oriente” highway tunnel that connects Medellin to the JMC International Airport in Rionegro.

That group of Odinsa’s assets and future expansions would enjoy “significant financial backing and technical strength for their management” from the new investment platform, while the partners also would “continue to explore other opportunities for creating value through the development of new projects,” according to Odinsa.

“As a consequence of the acceptance of the proposal, the companies signed a contract for the sale of shares and assets that contemplates the operations for the constitution of the investment platform,” according to Odinsa.

Macquarie Asset Management (MAM) – the corporate owner of MIRA and MIP-V – currently has US$427 billion in assets under management in 20 markets across Asia, Europe, Australia and the Americas, in sectors including infrastructure, renewables, real estate, agriculture, transportation finance, private credit, equities and fixed income, according to the company.

“The interest shown by national and international investors in being part of this initiative translates into good news for Grupo Empresarial Argos” while also confirming “the interest of international investors in continuing to invest in Colombia,” Odinsa added.

Written by September 01 2021 0

Medellin-based multinational electric power giant EPM announced August 31 that insurer Mapfre’s just-issued US$100 million payment for physical damages at the estimated US$5 billion Hidroituango hydroelectric project now brings total damage payments from Mapfre to US$450 million.

EPM recently boosted the estimated cost of the Hidroituango project to COP$18.3 trillion (US$4.877 billion), since a 2018 diversion-tunnel collapse resulted in about a US$2 billion cost overrun -- once including both physical damages and even-greater losses from nearly four years of lost power sales.

With restoration work now well underway, EPM foresees the first two power generation units at Hidroituango coming on-line in the second half of 2022, while the six remaining units would come on-line between 2023 and 2025, eventually enabling a maximum 2.4-gigawatts of power capacity.

The Mapfre policy covers up-to US$2.56 billion for physical damages and up-to US$628 million for lost power sales.

US$1.29 Billion Debt Request Ahead of UNE-Tigo Divestment Plan

On a related front, EPM revealed August 31 in a filing with Colombia’s Superfinanciera oversight agency that it is seeking authorization to contract another US$890 million in external debt, plus another US$400 million in Colombian Treasury loans equivalent to COP$1.5 trillion. As a result, EPM’s debt load potentially could grow by US$1.29 billion.

Meanwhile, to help pay for the cost overruns at Hidroituango and simultaneously reduce the need for more debt funding, Medellin’s City Council plans to begin hearings next month on EPM’s request to sell its 50% share of the UNE-Tigo telecom/internet/cable-TV joint venture that it shares with Spain-based Millicom.

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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.

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

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