Wednesday, June 3, 2020

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Medellin-based banking giant Bancolombia announced May 11 that 634 of its 684 branches nationwide are now open -- all with Covid-19-avoidance biosafety protocols, with many locations operating from 9:00 am at 4:00 pm daily, but closed Saturdays.

“The curfew decrees and other measures adopted in municipalities and localities of the country will be respected,” according to Bancolombia.

“We will continue with the policy of not allowing more than 50 people to enter a branch at one time” and “the use of face masks is mandatory,” according to the company, Colombia’s biggest bank.

“In all the branches that will be opened, we have installed acrylic shields in the cashier and advisory areas in order to create physical distance between employees and customers.

“We will deliver customer service [queuing] cards up to 15 minutes before the closure of each branch in order to be able to comply with biosafety standards and protocols. We reinforce all hygiene measures and cleaning cycles inside the offices.

“From this date [May 11] we will activate 80% of our commercial team, which has all the protection measures already mentioned. The remaining 20% of the human team of branches will continue in preventive isolation, including people at high risk, such as adults over 60, pregnant women and lactating mothers,” the company added.

“Bogotá will open from 9:00 a.m. to 4:00 p.m. continuously, and a pilot program with these same hours is already operating in Medellín at 23 of the 90 offices in the metropolitan area, in order to test the volume of traffic of employees and customers at times of greater concentration and mobility.”

However, Bancolombia has eliminated Saturday and extended-hours services -- at least for now, the company added.

 


Colombia-born Avianca -- Latin America’s oldest airline – on May 10 filed for Chapter 11 bankruptcy in U.S. federal court because of the Coronavirus shutdown.

Its majority shareholders today are U.S.-based United Airlines and Kingsland Holdings. For the filing, the company cited US$10 billion in liabilities along with inability to generate income to cover continuing expenses.

“We did this to protect our business while continuing to face the effects of the Covid-19 pandemic, as well as to comprehensively manage our debt and other commitments,” according to Avianca’s official press statement.

“We hope to return to heaven and help you visit, more safely, the people and places they love. Avianca will return to the skies and continue to fly once the travel restrictions generated by Covid-19 are gradually lifted.

“Avianca has submitted requests to maintain its [customer loyalty] client programs throughout this process, so clients can trust to continue organizing trips and flying with Avianca in the same way that they always have.

“Likewise, customers can use the tickets, vouchers and gift vouchers purchased before Avianca started this process. Additionally, they will continue to earn miles when they fly with the airline, and may continue to redeem the miles earned through ‘LifeMiles’ to purchase tickets with Avianca during this process.

“Avianca also hopes to continue issuing ticket refunds and honor travel bonuses and payments or credits associated with baggage or service claims in accordance with its customary policies.

“Subject to government policy, we hope to continue to allow multiple changes, with no penalties or fees for fare differences for previously issued and/or new tickets purchased as long as the original and changed flight is until October 31, 2020. All customers who have booked or are going to buy flights during this period can be sure that they can trust Avianca.

“Tickets purchased through ‘LifeMiles’ mile redemption will continue to be free of penalties until October 31, 2020,” the company added.

Avianca earlier this month was forced to cancel promotion of unauthorized flights inside Colombia because the Colombian government has banned all air travel through at least May 30.


The Viva Malls subsidiary of Medellin-based Grupo Exito announced May 7 the launch of “Viva Online” (see: https://www.exito.com/viva-online) so that quarantine-bound customers can order dozens of commercial products -- and then either pick them up at designated, virus-free mall sites or else have them safely home-delivered.

“Viva Online will offer shopping experiences with more than 50 brands, as well as virtual entertainment activities for all tastes,” according to a press bulletin from Grupo Exito.

“With the new service, Viva will make life easier for its clients, bringing them the brands and preferred products to their homes under the most rigorous biosecurity measures.

“Additionally, we have brand implemented the ‘Buy and Collect’ model in 12 of our shopping centers in the country. Through this service, orders are delivered directly to the customer’s means of transport [cars] and to specific areas designated for this purpose,” according to the company.

“We transcend the physical spaces of the shopping malls and we enable a virtual space that mixes the shopping experience, with differential and exciting activities for our clients,” said Juan Lucas Vega Palacio, Grupo Exito real estate vice president.

“In addition, we put Viva online at the service of other brands of entrepreneurs and small companies that are not necessarily in the shopping centers and that do not have e-commerce platforms, which will allow them to become visible and offer their products directly to end customers,” he added.

With the “Domicilios Viva” home-delivery service, some 100 brands can now reach the customers’ place of residence, according to the company.

“People place their orders through the WhatsApp line 3052232795 and the products are delivered to the place of choice, with multiple payment alternatives,” according to Grupo Exito.

“This new service, which has a coverage of three kilometers around each shopping center, is already operating in Viva Envigado and Viva Palmas [both in the Envigado suburbs of Medellin] and soon it will be implemented in seven more shopping centers in the country including Viva Laureles in Medellín; Viva La Ceja in eastern Antioquia; San Pedro in Neiva, Viva Barranquilla, Viva Tunja, Viva Villavicencio and Viva Wajiira in Riohacha,” according to the company.

ANDI Connects 25,000 Grocery Stores to Online Supplies

On a related front, Colombia’s biggest national industrial/commercial trade association ANDI announced May 8 a new wholesale online order-and-delivery alliance with Grupo Meiko’s “SúperVecino” neighborhood grocery-supply network.

The SúperVecino network (see: https://supervecino.grupomeiko.co/) enables thousands of local neighborhood grocery stores to order online and then receive deliveries directly, thus avoiding making trips to crowded (and hence potentially infectious) grocery wholesale supply centers in Medellin and other large cities.

“This initiative aims to offer an alternative in such a way that shopkeepers avoid going to the supply centers, reducing the risks of contagion and being able to continue their businesses and guarantee the income of their families. At the same time, the model supports rural producers and supply centers with the purchase of their foods,” according to ANDI.

“Since the beginning of the restriction of economic activity, we have been working on various alternatives to give continuity to some productive and commercial activities, while avoiding health threats. In addition to this [grocery wholesale] model, we are working with other ANDI sectoral commercial chambers on the implementation of [online order-and-delivery] of other products,” added ANDI President Bruce MacMaster.

The new system “supports the entire supply chain from producers who find a new sales channel on the platforms, to shopkeepers who can order online, choose the supplier and sustain their businesses without putting themselves at risk,” ANDI added.


In yet another effort to shore-up Coronavirus-crisis business liquidity, President Ivan Duque and Finance Minister Alberto Carrasquilla unveiled May 6 two new programs for payroll subsidies as well as income-tax-payment deadline delays.

Under the latest “declaration of economic emergency,” all employees of micro, small, medium and large companies here that have suffered sales declines of at least 20% in April 2020 (versus April 2019) will each get a COP$350,000 (US$90) direct transfer from the government for the next three months.

That payment – estimated to benefit some 6 million Colombia workers -- is equivalent to 40% of the current Colombia minimum wage, President Duque explained.

In addition, the government will postpone the second regular payment of corporate income tax (normally at end-May) to end-2020, helping companies conserve cash to meet payroll and other expenses.

Finance Minister Carrasquilla added that the new worker/business subsidies -- totaling about COP$6 trillion/US$1.5 billion) -- come on top of other Coronavirus-crisis programs that have already enabled companies to restructure on more-favorable terms outstanding loans equivalent to nearly COP$150 trillion (US$38 billion), helping to save millions of jobs.

“Of course, we would like to finance the entirety of payroll [of Cornavirus-slammed companies], but we don’t have enough money for that,” Carrasquilla explained, citing fiscal limits.

Nevertheless, the new program will cover “a very significant percentage of payrolls for the next three months,” especially for micro, small and medium-sized businesses, he added.

To qualify for these grants, companies will have to document through an auditor or accountant their actual payrolls -- and prove payment to workers each month via the mandatory “PILA” employee-benefits platform here, he added.

As for the income-tax payment delays, “companies that do not have cash can hardly pay those taxes, and if they fall into default they generate [bigger] problems later, which we want to avoid,” Carrasquilla added.

Medellin Chamber of Commerce Proposals

Meanwhile, in a new presentation to a Medellin Chamber of Commerce for Antioquia (MCCA) economic-outlook forum, former Inter-American Development Bank chief economist Eduardo Lora explained that a huge challenge facing not just Medellin but also Colombia is to generate more formal, tax-paying and benefits-generating employment -- in the wake of Coranavirus crisis.

Colombia needs to generate at least 4 million more formal-sector jobs quickly, MCCA quoted Lora as saying. Such a development not only would improve living conditions for workers but also would shore-up Colombia’s tenuous fiscal situation by generating tax revenues.

However, the Coronavirus crisis instead is causing just the opposite, as millions of people lose income -- and temporarily lose jobs -- while about 10 million more people here are working fewer hours. “These are huge numbers like never before,” Lora said.

To get Colombia back on track, Lora proposed that the government temporarily subsidize formal employment via a mix of policies that would reduce unemployment and stimulate demand.

Beyond that, tax reform is needed to “define how the debts we have today are paid in the future,” he said. What’s more, cities need to think more profoundly about the total impact of promoting telecommuting and teleworking -- as is now mandated during the current crisis for office employees.

While Lora added that Colombia is unlikey to see a return to the growth rates of 2019 before 2023 or 2024, former Commerce Minister Jorge Humberto Botero added in a separate presentation here that the Colombian economy could contract by 5.5% this year -- worse than the 4.5% contraction in the 1999 economic crisis.

In another presentation, Universidad de los Andes professor Sergio Clavijo predicted that Colombia GDP growth in the first quarter of 2020 might be around 2%, but would fall into negative territory for full-year 2020.

Beyond coping with the current crisis, government also needs a longer-term refocus on converting some 9 million Colombians in the informal sector to the formal jobs sector, Clavijo added.

At the same forum, former Colombia Agriculture Minister Juan Camilo Restrepo added that the Coronavirus crisis currently is estimated as costing Colombia at least COP$53 trillion (US$13.5 billion).

To recoup fiscal losses that accompany such economic crises, government can’t just raise taxes, since that would kill even more tax-paying business and hence kill more tax-paying jobs, he said.

Instead, “everything points to the fact that the government is going to have to [recoup losses] by borrowing more and raising the public debt,” hence postponing fiscal balance recovery into future years.


EPM general manager Álvaro Guillermo Rendón López confirmed in a televised May 7 address that the company continues to aim for a December 2021 startup of its US$5 billion, 2.4-gigawatt Hidroituango hydroelectric plant in Antioquia.

In his address, Rendón revealed that the Hidroituango project is now 77.8% complete, with COP$11 trillion (US$2.8 billion) already invested so far.

The first power turbines at Hidroituango would begin to generate electricity in December 2021 -- provided that Colombia’s environmental licensing agency (Agencia Nacional de Licencias Ambientales, ANLA) gives timely approval, Rendón said.

Following that, EPM would start-up additional turbines every three or four months in 2022 and beyond, until the full 2.4-gigawatts output capacity is reached – again, assuming timely ANLA approvals.

Meanwhile, EPM’s recent acquisition of the “CaribeMar” power network in the Atlantic coast region will be ready for complete takeover and operational startup in September 2020, he said.

“In the period 2020 to 2023, we seek to modernize the organization and improve relations with our customers and users through continuous improvement in service, information technologies and the development of ‘smart’ cities,” Rendón said in his address covering highlights of EPM’s first 100 days of operations so far this year.

The acquisition of CaribeMar – adding 1.5 million more power customers in Bolívar, Cesar, Córdoba and Sucre departments -- will increase EPM’s national distribution/commercialization market share to 35%, he noted. That makes EPM the biggest electric power player in all Colombia.

So far in 2020, EPM has completed 96% of its scheduled infrastructure projects (totaling COP$465 billion/US$118 million) to date, including entry-into-operation of new electrical infrastructure projects in Urabá and Medellín, plus upgrades at power plants, he said.

Meanwhile, over the next four years, EPM plans to invest another COP$7 trillion (US$1.8 billion) in infrastructure -- and simultaneously find innovative ways to overcome potential effects of the Coronavirus crisis, he said.

Currently, EPM serves nearly 20 million people with power, water, sewage treatment, natural gas and waste management utilities through 44 subsidiary companies in six Latin American countries: Colombia, Mexico, El Salvador, Guatemala, Panama and Chile, Rendón noted.

“In 2019 we invested COP$3.2 trillion [US$816 million] in infrastructure and operating assets and distributed COP$10.4 trillion [US$2.65 billion] in value to stakeholders, which translates into more social investment, job creation and quality of life for more people,” Rendón said.

“The financial results obtained in 2019 allow transfers to the municipality of Medellín of COP$1.5 trillion [US$383 million] during 2020 -- a year where the city faces effects caused by the Coronavirus pandemic,” he added.

In 2019, the EPM Group reported progress in  universalization of public utility services in its Colombia markets, reaching 96.43% of its market-area homes with electric power; 85.84% with natural gas; 95.75% with potable water supply; 93.5% for wastewater removal; and 99.28% for solid waste disposal, he said.

Meanwhile, EPM continues to lead all Colombia -- and even much of the developing world -- with innovative programs to bring affordable public services to poorer people, Rendón noted.

“With innovative social solutions, the business group enabled access to energy and water under the ‘prepaid’ modality, for those who due to their income conditions find it difficult to access these services,” according to the first-100-days 2020 report.

“In 2019, 26,747 families began to enjoy prepaid energy in the EPM, CENS and ESSA companies, with a total of 317,618 clients and users since 2007. Last year, in the ‘Agua Prepago’ program, we added 2,834 new clients and users in Valle de Aburrá [metro Medellin], for a consolidated total of 25,211 clients and users since 2015.

“With ‘pay as you can’ [installments] program, in 2019 we had 40,297 new clients and users in EPM, CENS and ESSA divisions. Since 2014, when the program was launched, the beneficiaries have amounted to 209,437,” the company added.


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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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