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Companies 318

Written by February 20 2020 0

Medellin-based multinational retail grocery and dry-goods marketer Grupo Exito announced February 19 that its full-year 2019 net profits came-in at COP$57.6 billion (US$16.9 million), down sharply from the COP$253 billion (US74$ million) in 2018 when the company still included Brazil operations (since sold).

“The result was impacted by variations in the tax [regimes], the contribution of international operations and performance of the units registered as discontinued,” according to Exito.

While profits (as measured in total pesos) dipped, operating income rose 6.3% year-on-year, to COP$15.3 trillion (US$4.5 billion) in 2019, versus COP$14.8 trillion (US$4.3 billion) in 2018, with electronic commerce, large-format sales and home-delivery sales representing 75% of the sales growth.

Recurring earnings before interest, taxes, depreciation and amortization (EBITDA) rose slightly year-on-year, at COP$1.28 trillion (US$376 million).

Colombia sales were the best in three years, up 4.8% year-on-year, according to the company, to COP$11.75 trillion (US3.4$ billion), according to the company.

“The results of Colombia are due to the cost-effective implementation of innovative value formats (Exito Wow, Carulla Freshmarket and Surtimayorista) and the execution of the omnichannel strategy (electronic commerce and domiciles),” according to Exito.

“E-commerce sales channels grew 37% in 2019 and represent 4.5% of sales in Colombia, compared to 3.4% in 2018,” the company added.

“The positive results of the Grupo Éxito operation in Colombia show the assertiveness in the development of strategies leveraged in innovation and transformation:

“1. Expansion of value formats: Éxito Wow closed 2019 with nine stores under this format, growing 13.4% of its sales and representing 17.5% of the total sales of the Éxito brand.

“2. Carulla FreshMarket, the concept of the group's premium brand that offers customers multiple experiences, fresh, healthy products and superior service, ended 2019 with 13 points of sale in the country, which grew sales by 12. 7% compared to the previous year and represented 17% of Carulla's total sales.

“3. Carulla SmartMarket, the smart commerce laboratory that opened its doors last December, offers its customers new experiences that reduce their shopping time, also integrating the concept of Carulla FreshMarket and important sustainability initiatives such as plastic use reduction. This proposal had an investment of COP$4 billion (US$1.17 million) and has about 20 technological formats.

“4. Surtimayorista, the format designed for professional customers and final consumers, completed 30 stores and consolidated in the central area of he country. Sales of the cash and carry format brand grew 17.8% in 2019 compared to the previous year.

“The e-commerce platforms exito.com and carulla.com had more than 86 million visits, 40.4% more than in 2018. Orders for these channels achieved 441,000 shipments in 2019.

“The ‘market place’ (virtual platform at the service of other companies) increased its sales by 29.4% in 2019 compared to the previous year.

“The ‘last- mile’ [home delivery] service had double-digit growth in the number of shipments in the year, and digital catalogs of 42%. For its part, the ‘Click & Collect’ service (purchase and pick up) increased the number of its orders by 25%,” the company added.

Written by February 20 2020 0

Medellin-based multinational electric power giant EPM announced February 19 that its board of directors gave formal approval for the company to bid on the “CaribeMar” power company in Bolívar, Cesar, Córdoba and Sucre departments in Colombia.

If EPM were to win the auction, then its national share of the Colombia power market would jump to 35% (19 million customers), up from 23% today.

“After an exhaustive and comprehensive analysis process, the EPM board of directors in its session on Wednesday, February 19 approved that the company present the documentation for its participation in the auction process of the shares of ‘CaribeMar,’ one of the two companies that will arise from the separation of markets of Electricaribe,” according to EPM.

Following the financial collapse of Electricaribe and a subsequent national government takeover, the government decided to split the auction of its assets into two parts: CaribeMar (Bolívar, Cesar, Córdoba and Sucre) and CaribeSol (Atlántico, Magdalena and La Guajira).

“Entering CaribeMar means for EPM a unique growth opportunity to reach the Atlantic coast market and provide its service to 1.5 million customers. CaribeMar represents approximately 12% of the share of the national energy market,” according to EPM

As noted in a separate report last month by Colombian business newspaper Portafolio, the “CaribeMar” portion of the former Electricaribe company includes 65% of the hotel sector of the tourist-popular Caribbean coast as well as many large industrial and commercial customers.

While Electricaribe has historically suffered from widespread theft of electric power through illegal connections, the “CaribeMar” area suffers less than the “CaribeSol” area, according to that report.

Not mentioned in the Portafolio report -- but widely known here in Antioquia and admired by power-experts internationally -- is that EPM pioneered the development of low-cost, pay-as-you-go metering systems that avoid power theft, especially in low-income neighborhoods.

This novel system enables people to buy “power cards” (similar to credit cards) in ubiquitous neighborhood stores. These cards provide a certain number of kilowatt-hours at subsidized power prices. Hence people on limited budgets buy only the power they actually want -- at affordable prices -- rather than stealing power through illegal connections and subsequently wasting “free” power by profligate usage, irrespective of actual need.

Colombia’s Energy Ministry announced last year that following years of debate over how to resolve chronic financial losses and massive power thefts at Electricaribe – with a resulting lack of investment in required infrastructure -- the government decided to assume COP$1.2 trillion (US$353 million) in Electricaribe’s pension liabilities, and then sell-off the assets to other power companies with better track records and greater financial muscle.

Electricaribe divisions will require about COP$8 trillion (US$2.35 billion) in infrastructure investments over the next 10 years, according to the Energy Ministry.

Meanwhile, upper-middle-class and wealthier residential power customers (“estratos 4,5 and 6”) throughout Colombia have been paying a special COP$4 (US$0.001) per-kilowatt surcharge to help Electricaribe limp along until new owners are found, the Energy Ministry noted.

Written by February 18 2020 0

Medellin-based multinational cement/concrete giant Cementos Argos on February 14 announced the debut of a US$78 million “green cement” processing facility at its 2.3 million tonnes/year Rioclaro, Antioquia cement plant.

The new technology cuts carbon dioxide (CO2) emissions by up-to-38% while cutting energy consumption by 30%, according to Argos.

“For the first time in Colombia is this type of cement produced, in which a porrtion of the traditional ‘clinker’ raw material is replaced by thermally activated clays (artificial pozzolana),” according to Argos.

The new facility thermally activates 450,000 tonnes/year of certain clays used in Portland cement production.

“With this project we are leading the industry and sowing the seeds of the Argos of the future, which starts today a new production line in Rioclaro, but which has a gigantic growth potential in all geographies,” added Cementos Argos President Juan Esteban Calle.

The new facility also “allows Argos greater flexibility and positions it as the first cement producer in Colombia to offer its customers a broad portfolio of products,” according to Argos.

“The entry into operation of this new [production] line, added to the modern Cartagena [Colombia] plant and other facilities in the national geography, gives Argos the largest installed capacity in the country for the production of cement and concrete,” the company added.

Written by February 13 2020 0

Colombia-based aviation giant Avianca announced February 13 the launch of its new “Avianca Express” division for new routes including flights from Medellin’s downtown Olaya Herrera airport (EOH).

Absent from EOH for 20 years, “Avianca Express” soon will launch flights utilizing ATR-72 propeller aircraft to and from downtown Medellin -- initially serving Quibdó, Montería and Bucaramanga, starting March 30.

“Given the importance of Medellín as a development hub in the Colombian territory, the Olaya Herrera airport will be one of the most robust foci of operations that Avianca Express will have to connect the regions of the country,” according to the company.

Avianca Express also announced new flights to-and-from Bogota to cities including Corozal, Florencia, Ibagué, Manizales and Villavicencio, according to the company.

Medellin is the only city in Colombia with two airports: Downtown EOH for domestic flights mainly to smaller cities, and Jose Maria Cordova (JMC) international airport in the eastern Medellin suburb of Rionegro.

Written by February 12 2020 0

Medellin-based Compañia de Empaques -- manufacturer of more than 1,500 types of packaging materials and fibers for industrial, agricultural, construction and infrastructure sectors – on February 10 revealed in a filing with Colombia’s Superfinanciera oversight agency that its full-year 2019 profits hit COP$12.8 billion (US$3.77 million), up from COP$10.6 billion (US$3 million) in 2018.

At its upcoming shareholders meeting March 4 in the Medellin suburb of Itagüí, the company’s board proposes to pay COP$5.9 billion (US$1.7 million) in dividends, with monthly payments of COP$40 (US$0.01) per share between April 2020 and March 2021, according to the filing.

Compañía de Empaques -- which produces more than 30,000 tonnes per year of products and employs a workforce of 1,500 -- boasts of more than 75 years of experience in “transformation of natural fibers and plastic resins into practical [packaging] solutions.”

Products include “sacks and fabrics of synthetic fiber and natural fiber, zunchos [specialty threads and cords], packaging meshes, shade fabrics for the protection of crops, natural and synthetic fiber rope, erosion-control mantles, mesh and plastic protection and enclosure fabrics, printable input solutions for signage, advertising and commerce, and packaging and storage solutions for homes and offices.

“Our corporate social responsibility is focused on promoting the planting and transformation of fique -- a biodegradable and very resistant fiber native to the Andes -- which represents an important source of livelihood for more than 50,000 Colombian families and contributes to the substitution of illegal crops in our country. For this social purpose, we have the support of different national and foreign entities,” the company adds.

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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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