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Medellin-based electric power giant EPM announced April 25 that the US$5 billion, 2.4-gigawatt “Hidroituango” hydroelectric power project in Antioquia – one of the world’s biggest -- continues to make progress following a destructive bypass tunnel collapse two years ago.

That collapse and subsequent damage to the machine room and related facilities caused a three-year delay in startup at the project -- meaning hundreds of millions of dollars of lost power sales along with infrastructure damages.

Insurance payments to date have helped EPM recoup physical damages, but final payments covering lost power sales have yet to be calculated or approved.

Following the tunnel collapse, EPM pushed-back the initial startup forecast to end-2021, rather than end-2018. However, it’s unknown whether strict, new health protocols to avoid Coronavirus infections among workers potentially might cause more delays.

Meanwhile, EPM released a new video showing some of the recent construction and recovery work at the project (see: https://bit.ly/2zvywOg). But this video doesn’t show or explain how workers are dealing with new, further restrictions arising from Coronavirus prevention protocols.

Commenting on the upcoming anniversary of the diversion tunnel collapse (April 28, 2018), EPM general manager Álvaro Guillermo Rendón López stated: “In these two years [following that incident] our company hasn’t spared efforts or resources to reduce the risks of the populations located downstream of the project and to carry out one of the most important infrastructure works in the country.”

Since then, EPM successfully drained and cleaned-out the main cave complex, removed damaged equipment (including the overhead crane) and recoated the interior walls with concrete.

“At this time, cave repair work is focused on filling and repairing a large hole created by erosion between catchments number 1 and 2. This hole is now filled and completion of sealing is in final review stage,” according to EPM.

Meanwhile, repair of the machine room cave complex is "65% complete. Daily monitoring of the structure shows 100% stability,” according to EPM.

The dam itself was completed last year, including an impermeable bentonite screen rising from 380 meters to 418 meters above sea level. The entire dam has been raised to its full height of 435 meters above sea level “as required by the project design,” according to EPM.

“With these works, the reservoir [behind the dam] can operate safely even in the face of maximum water levels projected over 10,000 years,” according to EPM.

“The current state of the dam allows control of the maximum possible risk – that is, the passage of 22,500 meters per second of water through the dam works, or the maximum foreseen flow that the Cauca River could bring.”

In November 2019, a new road built atop the dam was opened for traffic to and from the municipality of Ituango in northern Antioquia.

As for diversion tunnel works, two gates of the auxiliary diversion tunnel were repaired and reinstalled, meaning this tunnel is now “capable of withstanding the pressure of the reservoir [behind the dam] at its maximum filling level,” according to EPM.

“Recovery efforts are focused today on construction of a 23-meters-long concrete plug, which allows the gallery to be sealed. In the right diversion tunnel, where the collapse originated, a pre-stopper plug was built to enable safe advancement of construction of the final plug.

“The intermediate discharge tunnel is reinforced in its structure to increase its hydraulic capacity. From this tunnel, work is carried out on the right diversion tunnel. On another construction site, fillings and repairs are carried out in the gap between catchments 1 and 2,” according to EPM.

Social Recovery Programs

Meanwhile, 1,990 families from the township of Puerto Valdivia – temporarily evacuated following the tunnel collapse -- have since returned to their homes.

“EPM continues to provide financial support to the 265 family groups that have not yet returned to their homes. The delivery of these supports amounts to about COP$31 billion [US$7.7 million],” according to EPM.

The company also has signed compensation deals for several dozen homes damaged by temporary flooding caused by the tunnel collapse, and paid for repairs at schools and other buildings.

EPM also has inked financial compensation deals with 280 merchants affected by temporary loss of sales, while claims from another 1,200 merchants await adjudication.

In addition, “to strengthen the economy in the affected populations, EPM implemented social contracting, through Asocomunal, for recovery projects and works, for a value close to COP$680 million [US$168,000]," the company added.


Nutresa 1Q 2020 Profits Rise 9% Year-on-Year

Saturday, 25 April 2020 13:26 Written by

While most Colombia-based companies are getting clobbered by the Coronavirus crisis, companies making and selling groceries and prepared foods through stores to date are doing relatively well.

Example: Medellin-based multinational foods giant Grupo Nutresa on April 24 reported a COP$190 billion (US$47 million) consolidated net profit for first quarter (1Q) 2020, up 9.1% year-on-year.

Consolidated sales rose 18.4%, to COP$2.7 trillion (US$668 million), according to the company.

“Excluding the acquisitions of Atlantic Food Service in Colombia, and of Cameron’s Coffee in the United States, the group’s organic sales growth was 13%,” according to Nutresa.

“In Colombia, sales had a solid performance at COP$1.6 trillion (US$395 million), 61.2% of the group’s total sales, with a growth of 15.5% compared to the same period in 2019.

“Organic growth was equally outstanding, with an increase of 11.6%. About 85% of the growth dynamic in Colombia was driven by higher volumes.”

International sales expressed in Colombian pesos rose 23%, to COP$1 trillion (US$247 million).
“International organic growth, in U.S. dollars, was up 2%, and in COP, up 15.3%,” the company added.

Positive sales growth came from “a portfolio of foods for daily consumption at home, which have had adequate availability in traditional channels such as neighborhood stores, supermarkets, and supermarkets, as well as in alternative channels of the group,” according to Nutresa.

Operating profit rose 11.5%, to COP$256.6 billion (US$63 million), while earnings before interest, taxes, depreciation and amortization rose 17.5%, to COP$376 billion (US$93 million). with EBITDA margin at 14.1%.

“This result was the result of a management oriented towards the rationalization of spending, with the aim of having an increasingly efficient and flexible structure,” according to Nutresa.

Financial expense rose 6.1% “derived from the greater indebtedness for the acquisition of Cameron’s Coffee in 2019 and new loans for working capital taken during the period,” according to the company.


The Medellin Chamber of Commerce for Antioquia (CCMA) just revealed a new study indicating that the Coronavirus quarantine costs the local economy here at least COP$170 billion (US$42 million) every day -- and 95% of businesses have seen sales drop anywhere from 80% 100% during the crisis.

As a result, Antioquia regional gross domestic product (“PIB” in Spanish initials) likely will come in at a net-negative 1.5% to 2% this year -- barring some dramatic reversal, according to CCMA.

To get an idea of this impact, Antioquia’s GDP in December 2019 alone was COP$134 trillion (US$33 billion), according to CCMA.

“Of the 3 million employed persons in Antioquia department, close to 1 million work in activities at high risk of Covid-19, and losses of between 112,000 and 131,000 jobs are projected, which implies an increase in the unemployment rate close to 15%,” according to the trade group.

Because of quarantine rules to date, “55% of the companies in Antioquia are not currently operating. These represent 41.2% of formal jobs,” according to CCMA.

The controlled reopening of construction and manufacturing sectors on April 27 will help industry and employment -- but won’t solve all the current problems, the group added.

What’s more, 88% of companies only have enough cash-on-hand to survive a maximum of one to two months, CCMA’s survey found.

Meanwhile, ANDI – Colombia’s biggest national industrial/commercial trade association – on April 23 released findings of its second survey on cash liquidity among 238 member companies.

“Compared to the results of the previous survey, it can be seen that the liquidity situation of companies today with updated information as of April is more critical to the extent that the vast majority of companies have not received income and have had to continue to cover their expenses,” according to ANDI.

“In effect, with updated information, companies only have 11 days to operate if they allocate the entire cash flow of the company to fulfill all their obligations -- that is, the entire payroll including social security, suppliers, financial sector, contracts and Dian [taxes].

“In the case of manufacturing companies, they have 12 days to operate” if cash-on-hand were disbursed to cover all outstanding expenses, ANDI found.

“In the manufacturing industry, there is an average of 42 days in cash to cover the salary of employees, 31 days to meet the full payroll including social security payments, 15 days to pay suppliers, 38 days to cover fixed expenses associated with contracts and loans acquired with the financial sector, 43 days for the payment of withholding tax and 42 days for the payment of VAT [value-added tax] withholding.

“However, the situation is much more complex for a large number of companies: 38.7% of the companies surveyed only have sufficient cash to cover between one and eight days if they meet all their obligations of payroll, suppliers, fixed expenses, financial sector and Dian, while 17.1% only have between nine and 15 days left, while 27. 6% have between 16 and 30 days. Thus, 83.4% have cash to operate for a month or less.”


AngloGold Ashanti Colombia announced April 23 that its proposed “Quebradona” copper-gold mine project near Jerico, Antioquia soon will get a second information-gathering visit from Colombia’s Agencia Nacional de Licencias Ambientales (ANLA, the environmental permitting agency).

Commenting on the news, company president Felipe Marquez added that the upcoming site visit “is very positive because it will enable [ANLA] to get more information for a licensing decision that will enjoy absolute transparency, technical rigor and opportune citizen participation.”

“The second visit will be made once the national government lifts the restrictions that were established before the health emergency that the country is experiencing due to the spread of Covid-19,” according to AngloGold Ashanti.

On a parallel front, AngloGold announced that as of April 21, the company restarted some preliminary works at the site – following new Colombia Health Ministry biosafety protocols to protect workers and people near the site from contracting Coronavirus.

“Quebradona resumes some of its activities in the field with the purpose of reactivating the work and advancing the activities that are essential for the continuity of the project,” according to AngloGold.

“The restart of priority activities is carried out within the framework of a strict biosecurity protocol that seeks to protect the health and life of its collaborators, contractors, suppliers and inhabitants of its area of influence.

“There are some tasks and activities that, by their nature, require to be carried out on site and which are not a source of risk for community contagion, since they do not crowd large numbers of people around one site, they do not take place in closed spaces and they do not imply interaction with people who come from the outside.

“In line with the regulations of the Ministries of Health and Social Protection, Labor and Mines and Energy, which established the conditions under which the mining sector can operate and complying with the recommendations of the Jericho Ministry of Health, AngloGold Ashanti designed complete and detailed operating protocols aimed at minimizing the risk of spreading the Covid-19.

“The protocols include provisions related to the control and rapid detection of possible cases, mandatory hygiene measures for people, sanitation processes for facilities, measures for the transport of personnel, recommendations for extra-occupational care, guidelines for health personnel, among others.”


The east-of-Medellin “Oriente” region -- second only to Cundinamarca in Colombia’s gigantic cut-flower export industry – aims for a sales rebound for the upcoming May 10 annual “Mother’s Day” demand surge typically seen in North America, Europe and parts of Asia.

As noted in an April 14 bulletin from Asocolflores (the national flower-producers’ trade association), the Colombian government granted flower producers and exporters some limited exemptions from the national Coronavirus quarantine.

However, these partial exemptions also include extra-strict health protocols for workers at production and shipping sites, as well tougher restrictions on the number of workers allowed on company buses typically used for transport.

“President Iván Duque extended mandatory preventive isolation until April 27 due to Covid-19, but maintained the exceptions that allow the floriculture sector to operate,” noted Asocolflores president Augusto Solano.

“Our farms continue to work under strict health and hygiene measures, which implies higher operating costs because, for example, company buses are traveling with half the number of people they normally transport,” Solano said.

Meanwhile, latest figures on the evolution of the Coronavirus crisis indicate that Colombia is not only doing better than many other nations, but also beating its earlier, more pessimistic projections. Because of this, “the government hopes to begin a gradual and careful opening of the rest of the economy” in the coming months, Asocolflores noted.

In the meantime, “Colombian flower growers already have production and logistics in place to meet demand from different countries, which for the most part continues to be the United States, Japan and now some European countries,” according to the trade group.

Beyond preparing for the annual export surge for Mother’s Day, Colombia’s flower producers are also helping to address the Coronavirus crisis in Antioquia and elsewhere in Colombia, according to the group.

Among those efforts: donation of four Intensive Care Units (ICU) for Cundinamarca and Antioquia; donations to subsidize the purchase of an ambulance for Rionegro, Antioquia; delivery of Coronavirus detection tests for the small tropical-flower-growers’ region; and distribution of food packages for poor families.

In addition, “Asocolflores also delivered 120,000 stems of flowers to nine hospitals in Bogotá, Medellin and small towns in Cundinamarca to celebrate International Health Day on April 7,” according to the trade group.


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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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