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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.

Written by August 18 2021 0

Medellin-based textile giant Coltejer announced August 17 a COP$14 billion (US$3.6 million) net loss for second quarter (2Q) 2021, down from a COP$724 million (US$187,000) net profit in 2Q 2020.

Gross income likewise plummeted to COP$5 billion (US$1.3 million), from COP$16.3 billion (US$4.2 million) in 2Q 2020 as a result of Coltejer’s shut-down of its money-losing non-woven-fibers production (see Medellin Herald July 16, 2021).

As for first half (1H) 2021, Coltejer posted a COP$40 billion (US$10.3 million) net loss, a slight improvement over the COP$49.8 billion (US$12.9 million) net loss for 1H 2020.

Aside from the usual boilerplate financial information in the latest report, Coltejer made special reference to the ongoing Covid-19 crisis that in prior quarters has bled most industries.

“The outbreak of the Covid-19 pandemic and the measures adopted by the Colombian government to mitigate the spread of the pandemic have significantly impacted the economy,” according to Coltejer.

“Based on the liquidity position of the company as of the authorization date of these financial statements, and the inability to fulfill the commitments acquired with suppliers and employees, the company’s management determined to temporarily suspend the operations of the business of non-woven fibers, which implies for the company a monthly decrease of 49% of current income and a monthly increase in its net loss. With respect to the personnel linked to this line of business, they were granted collective vacations.

“On the other hand, [the company is] seeking liquidity resources for the realization and implementation of technical and market studies through the sale of fixed assets, inventories and leasing of buildings, the implementation of training processes for personnel related to the new technical and market requirements, elaboration of the analysis of the required administrative structure, as well as the definition of job profiles and the analysis of the infrastructure and products required for the market and the analysis of required raw materials and inputs, to avoid shortages.

“In light of these developments, management continues to have a reasonable expectation of having adequate resources to continue in operation for at least the next 12 months and that the ‘going-concern’ accounting base is still adequate, concluding that the company has continuity in the future and that the strategies described above support the possible results that are broken down from this contingency in a controlled way,” Coltejer added.

Written by August 15 2021 0

Medellin-based multinational gold mining giant Mineros SA announced August 10 that its second quarter (2Q) 2021 consolidated net profit rose to US$10.4 million, up from US$8.7 million in 2Q 2020.

Revenues likewise rose, to US$128.4 million, up from US$126.3 million in 2Q 2020. But earnings before interest, taxes, depreciation and amortization (EBITDA) dipped to US$41.8 million, from US$53.4 million in 2Q 2020.

“During the second quarter of 2021, the world price of gold was US$1,770 per ounce, an increase of 3.7% compared to the end of first quarter 2021 and 5% higher than the end of the second quarter of 2020,” according to Mineros.

“Despite the positive news of economic recovery worldwide, the price of gold remained at strong levels due to economic stimuli packages, low central bank interest rates and high inflation in the United States.

“At the beginning of the third quarter 2021, the gold price continues to be strong, while the main concerns focus on the behavior of the Delta variant [of Covid-19] and the monetary policy of large economies,” the company added.

For all of 2Q 2021, Mineros produced 67,403 ounces of gold, of which 19,738 ounces were from alluvial production in Colombia; 32,381 ounces from underground mining at Hemco-Nicaragua; and 15,284 ounces from open-pit mining at Gualcamayo-Argentina.

As for its core alluvial mining operations in Antioquia, Colombia, “on June 23, the Colombian environmental authority [ANLA] replied to an appeal filed by the company in April. A good part of previous [negative] decisions were reconsidered. In that sense, once the impact was analyzed, even when not all the requested areas [for alluvial mining] were granted, the company will be able to continue with its alluvial operation.

“In September and October, a new request for environmental permits will be submitted, seeking to give continuity to the alluvial operation in the mid and long term,” according to Mineros.

On another front, “on July 30, in Colombia, we launched the ‘Llanuras Aluviales’ project, a new alluvial production unit that uses lighter technology, with easier transportation and allows for process optimization,” according to Mineros.

“Llanuras will give access to smaller areas with lower average ore grades. With an investment of around US$18 million, Llanuras will generate new development and employment opportunities in the area, promoting technology and business innovation in the Bajo Cauca region [in Antioquia],” the company added..

Total gold production for 2Q 2021 “was 4% lower than in the second quarter of 2020, explained by a drop in production in Gualcamayo (Argentina), given the natural depletion of a sector of the open pit mine and the sale of Operadora Minera in Colombia in June of last year,” according to Mineros.

Total cash costs rose 24% and the all-in sustaining cost rose 41% “mainly explained by higher production costs in Argentina and by the cost of purchases of artisanal material in Nicaragua, in addition to the development of the open pit mine in Argentina which requires the movement of a large amount of sterile material,” according to Mineros.


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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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