Sunday, July 21, 2019

Become part of our community

captcha 

Economy & Finance 8

Written by July 11 2019 0

Nutresa Full-Year 2018 Net Profits Jump 20% Year-on-Year

Medellin-based multinational processed foods giant Nutresa announced February 22, 2019 that its full-year 2018 net income rose 20% year-on-year, to COP$508 billion (US$155 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) climbed 7% year-on-year, hitting COP$1.1 trillion (US$336 million), while sales rose 3.7% and EBITDA margin came-in at 12.5%, according to the company.

Sales in Colombia grew 4.4% year-on-year, to COP$5.7 trillion (US$1.7 billion), according to Nutresa. International sales meanwhile rose 2.3%, to US$1.1 billion.

Costs of operations fell 42% year-on-year thanks to lower financing costs, lower debt levels and lower interest, according to the company.

Grupo Nutresa – founded in 1920 – now boasts of having some 45,600 employees in eight business units, including processed meats, baked goods, chocolates, pastas, coffees, ice creams and packaged foods.

The company also operates 46 production plants in 14 countries, while its products are sold in 81 countries across five continents.

Written by July 11 2019 0

Colombia’s national economics statistics agency (DANE, Departamento Administrativo Nacional de Estadistica) on February 28 revealed that its latest studies indicate national gross domestic product (“PIB” in Spanish initials) hit 2.7% for full-year 2018, up from a feeble 1.4% in 2017.

Meanwhile, Fedesarollo – Colombia’s leading economic think-tank – now foresees a continuing rebound in the national economy, with GDP likely hitting about 3.3% this year and gradually increasing to around 3.8% GDP by 2022.

For 2018, relatively strong growth (4.1%) came in public administration and defense; compulsory social security plans; education; health care activities and social services, according to DANE.

Wholesale and retail sectors, repair of motor vehicles and motorcycles, transportation and storage, lodging and food service sectors meanwhile grew by 3.1%, according to DANE.

Professional, scientific and technical activities, as well as administrative and support services activities grew by 5.0%, according to DANE.

Mining and quarrying, however, declined by 0.8% year-on-year, including a 12% drop in extraction of metalliferous minerals and a 6.7% drop in extraction of coal and lignite.

Extraction of crude oil and natural gas and support activities grew by 1.4%

In manufacturing, this sector grew by 2.0%, mainly thanks to a 3.7% hike in manufacture of furniture, mattresses and mattresses, and a 3.2% hike in production of food products, beverages and tobacco products.

The study also found a 2.2% hike in sectors including manufacture of basic metallurgical products; manufacture of fabricated metal products, except machinery and equipment; manufacture of electrical apparatus and equipment; manufacture of computer, electronic and optical products; manufacture of machinery and equipment; manufacture of motor vehicles, trailers and semi-trailers; manufacture of other types of transport equipment, and installation, maintenance and specialized repair of machinery and equipment.

Manufacture of textile products; clothing; tanning and retanning of hides; footwear manufacturing; manufacture of travel articles, suitcases, handbags and similar articles; and manufacture of saddlery and saddlery articles decreased by 0.2% year-on-year.

In construction, growth came-in at a relatively weak 0.3% year-on-year, with residential and non-residential building growth at 1.0%, while “specialized activities for the construction of buildings and civil engineering works (rental of machinery and construction equipment with operators) decreased by 0.9%,” according to DANE.

Construction of roads and railways, public service projects and other civil engineering works also decreased by 0.6%.

The information and communications sector grew by 3.1% year-on-year, identical to the growth in the financial and insurance sector, according to DANE.

As for real estate activities, this sector grew 2.0% year-on-year, according to DANE.

Written by March 16 2018 0

The Chamber of Commerce of Medellin for Antioquia (CCMA) projects that Antioquia likely will see 3% growth in gross domestic product (“PIB” in Spanish initials) this year, up from 2.2% last year.

As noted in a March 15 bulletin from Confecamaras (the Colombian national association of chambers of commerce), Antioquia out-performed Colombia nationally last year, with 2.2% GDP growth locally versus just 1.8% nationally.

As for 2018, the Medellin chamber foresees 3% GDP local growth thanks to “lower interest rates, growth in industrial exports, better prospects for private investment and public spending,” the report noted.

In a related report posted to the Medellin chamber’s web-site (http://www.camaramedellin.com.co/site/Noticias/Desempeno-economico-de-Antioquia-y-perspectivas.aspx), CCMA noted that exports from Antioquia grew 3.3% last year – to US$4.478 billion. Gold, fruits (especially bananas), coffee, vehicles, flowers, clothing, plastics, machinery and essential oils were the leading export products.

Meanwhile, copper exports jumped by 126% year-on-year --mainly to Spain and Singapore – while textile exports grew 15%, mainly to Brazil, Ecuador and Mexico, according to CCMA.

While local government spending grew 4% here, up from 2.4% in 2016, “industry, commerce and construction showed lower growth because of slow growth in internal demand and the negative impact of the [2017] tax reform, affecting personal consumption,” the CCMA report notes.

Investment in private corporations last year grew 18.6% year-on-year, by COP$1.01 trillion (US$353 million), with management consulting, road transport, metal-mining, machinery installation and maintenance, lumber and fisheries, health-care, and telecommunications taking leadership among all investment categories, according to the report.

However, industrial production in metro Medellin declined by 4.6% year-on-year through September 2017, while local industrial energy demand fell 7.9%, the report noted. The biggest declines were in textiles, iron works, foundries and clothing manufacture, according to CCMA.

While 139 companies relocated to Medellin from elsewhere in Colombia (mainly Bogota and Barranquilla) during 2017, 133 other companies decided to leave Medellin, mainly going to Bogota, Cali, Barranquilla and Cartagena, the report found.

Factors attracting companies to Medellin include relatively favorable access to clients and suppliers, the existence of local companies providing required services and information, relatively good urban and social infrastructure, qualified labor, relatively efficient public administration, and the existence of research centers (such as universities), the CCMA report found.

However, negative factors cited by companies included relative costs of public services, relatively high land costs, lack of local natural-resources, labor costs, lack of fiscal incentives and some concerns about security.

Written by September 27 2017 0

At a September 26 event celebrating the fiftieth anniversary of Medellin-based ISA -- Colombia’s national electric-power transmission operator and power-market trading hub – speakers praised ISA for revolutionizing and rationalizing Colombia’s power industry.

In a speech here at Medellin’s Plaza Mayor convention center, Colombia President Juan Manuel Santos recounted the painful history of Colombia’s catastrophic power outages for 13 months during 1992 and 1993, which cut a full three percentage points out of gross national product (“PIB” in Spanish initials).

That event spurred ISA to adopt measures that have since helped to avoid a repeat of similar power disasters.

However, Colombia’s heavy reliance on hydropower – about 70% of the national total – makes the nation especially susceptible to occasional “El Niño” droughts (as in 1992 and 2016) that slash water supply to hydroelectric plants, Santos warned here.

What’s more, global climate change could worsen this situation, which makes it even more important for Colombia to deploy more alternative sources including wind and solar power, which feasibly could rise from a 1% national share today to around 15% in years ahead, he added.

Aside from global warming threats, the Colombian electric power industry is facing radical market changes that threaten the historic business models of generators, transmitters and utilities, as noted by several panelists at the event.

Notably, Medellin Mayor Federico Gutierrez was among the audience members paying close attention to these warnings -- especially since dividends from the city-owned, multinational power utility EPM provide about 20% of Medellin’s annual income.

What’s more, EPM is part-owner of the under-construction, 2.4-gigawatt “Hidroituango” hydroelectric plant in Antioquia – which will be by far the nation’s biggest single power plant when it reaches full capacity in 2021. Future “El Niño” droughts aggravated by “global warming” could pinch EPM’s future revenues from that plant.

One of the panelists here -- Navneet Trivedi, chief operating officer of Vrinda, a New York-based electric power consultancy – warned that while ISA has enjoyed tremendous, profitable growth in moving electrons since its founding 50 years ago, the future for ISA likely will be one of less demand for long-distance, high-tension transmission.

Many factors account for this forecast, including greater efficiencies in power technologies and the growth of distributed energy generation (DEG) --including home, office and factory generation schemes that for example may employ diesel/natural gas generator-sets, or solar power paired with battery or hot-water storage.

Such efficiencies and innovations help explain why (for example) the Washington, DC, population has grown 13% in the last five years, yet electricity demand over that same period has fallen 6%, he said.

DEG, technology evolutions and efficiency schemes similarly are likely to cut demand for long-distance, high-tension power transmission and “change the role of the [power] grid” in Colombia, Trivedi added.

What’s more, Pablo Corredor – director of ISA’s Medellin-based power-trading subsidiary “XM” – pointed-out in his presentation that future growth of electric vehicles (EV) in Colombia could have mixed results: a favorable reduction in vehicle air pollution, but a potential power-market disruptor. Reason: EV’s potentially could represent gigawatts of stored power, newly made available to local grids through reverse transmission (vehicle-to-grid).

While Vrinda’s Trivedi told Medellin Herald that “I don’t think vehicles-to-grid will be an easy solution,” Trivedi did emphasize that ISA, power generators and utilities will need to adjust their business models radically to accommodate the coming changes in power supply and demand.

“There are multiple ways” to address these challenges, he said. “But they [power-industry players] need to focus more on services than product delivery,” he added.

In a recent column published in the U.S.-based energy journal Energy Central, Trivedi explained that “there are at least three values/colors of electricity: energy, infrastructure and services, instead of one black-and-white value: kilowatt-hours (kWh).

“In their zeal to simplify electricity charges, utilities have made a monolithic unit (kWh) and when that was not sufficient they pushed [power regulators] for a fixed charge (demand charge). Even the vocabulary is wrong! There is nothing fixed about fixed charges -- they vary and in fact now utilities want to see steep increase in them.”

On a parallel front, emerging technologies that could radically change power markets would benefit from carefully supervised demonstration-and-trial programs such as the “NY REV” project now underway in New York, according to Trivedi.

“We recommend that a framework should be developed and institutionalized for demonstration projects to ensure that NY REV [or a similar program elsewhere] is implemented with its intended benefits,” he wrote in a recent column.

Participants in technology demonstrations need to “publish methodology, selection criteria, implementation approach and monitoring mechanism for demonstration projects,” while “demonstration projects should clearly identify the need for bringing private capital, proven technology and examples of service models,” he added. “Quantification of benefits should be part of the monitoring of demonstration project governance,” he concluded.

ISA president Bernardo Vargas added in his presentation here that the Colombian power industry is heavily regulated. As a result, new-technology demonstration programs and new business models will require effective communications and close cooperation between the power industry and government regulators.

“We need to avoid obsolescence,” he added. “We have profound government restrictions on what we can do, so we have to work with government to be proactive.”

Written by March 22 2017 0

Colombia’s Banco de la Republica (BR, the state bank) found in a new study that Medellin and the surrounding Antioquia department are generally out-performing the national economy, especially in certain export sectors.

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.

Contact US

logo def
Medellin Herald: Find news, information, reviews and opinion on business, events, conferences, congresses, education, real estate, investing, retiring and more.
  • COL (4) 386 06 27
  • USA (1) 305 517 76 35
  •  www.medellinherald.com 
  •  This email address is being protected from spambots. You need JavaScript enabled to view it. 
  • Medellin, Antioquia, Colombia

Medellín Photo Galery

Medellin, contrasting colors and styles by Gabriel Buitrago

MPGMPGMPGMPGMPGMPGMPGMPGMPGMPGMPGnav