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Colombia Presentation December 2015

The document provides an overview of Colombia's investment environment and business opportunities. Some key points: - Colombia has a growing economy, reducing poverty and expanding middle class. GDP growth was 5.8% from 2010-2014, second highest in Latin America. - Major sectors for investment include infrastructure, agriculture, mining, manufacturing, tourism and BPO. The country has free trade agreements with over 60 countries. - Colombia has a low level of restrictions on foreign investment and has undertaken reforms to improve its business environment, being ranked among the top 20 destinations for foreign direct investment.

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Investment environment and business opportunities in Colombia December, 2015
We promote exports We promote tourism We promote investment and industrial expansion for internationalization We promote country brand
PROCOLOMBIA AROUND THE WORLD United States / Canada / Mexico / Guatemala / Costa Rica / Caribbean / Venezuela / Brazil / Ecuador / Chile / Peru / Argentina / Spain / Germany / Portugal. / United Kingdom / France /Turkey / United Arab Emirates / India / China / South Korea / Russia / Japan / Singapore / Indonesia. 26 commercialoffices 30countries
CONTENT Colombia´s Economic Overview Colombia´s Investment and Trade Investment Opportunities 1 2 3
Colombia´s Economic Overview
Around 1.0 million of oil barrel per day 3rd oil producer in the region COLOMBIA’S GENERAL FACTS Fifth coal exporter worldwide First exporter in Latin America Fourth largest producer of crude palm oil in the world Over 1.0 million tons produced Country with the highest biodiversity per km2 Among the 17most megadiverse countries of the planet
LESS THAN 6 HOURS TO THE MAIN CAPITAL CITIES IN LATIN AMERICA * This information takes into account the routes departing from international airports in Barranquilla, Bogota, Cali, and Medellin. Source: Routes and Tariffs- Tools for the Colombian Exporter, Processed by Proexport Colombia. New York (5hr 35min) Los Angeles (9hr 25min) Mexico City (4hr 20min) Paris (13hr 20min) Madrid (9hr 40min) London (14hr 05min) Tokyo (25hr 05min) Beijing (24hr 40min) Dubai (19hr 40min) Moscow (17hr) Miami (4hr 30 min) Lima (3hr 10 min) Santiago de Chile (6hr 55 min) Berlin (14hr 10 min) Hong Kong (24hr 15min) Toronto (8hr 54 min) Mumbai (24hr 30min) Seoul (23hr 35min) Sao Paulo (5hr 50min) 878 INTERNATIONAL DIRECT FREQUENCIES PER WEEK. MORE THAN 4,500 DOMESTIC FREQUENCIES PER WEEK.
A country with multiple development poles and regions Caribbean Region Andean Region Pacific Region Orinoco RegionAmazon Region  Agribusiness  Automotive  Infrastructure  BPO & KPO  IT Services  Hotel & Tourism Infrastructure  Agribusiness  Oil Goods and Services  Automotive  BPO  Hotel & Tourism Infrastructure  Shared Services Centers  Agribusiness  Metalworking  Chemicals  Automotive  Hotel & Tourism Infrastructure  Agribusiness  Hotel & Tourism Infrastructure  Agribusiness  Hotel & Tourism Infrastructure Colombia has 9 cities with over 500,000 inhabitants and 37 with more than 250,000 inhabitants. It is expected that by 2020, 14 cities have more than 500 thousand inhabitants. Cartagena 990,179 hab. Medellín 2,441,123 hab. Cali 2,344,734 hab. Ibagué 512,631 hab. Bogotá 7,776,845 hab. Bucaramanga 527,451 hab. Cúcuta 643,666 hab. Barranquilla 1,212,943 hab. Soledad 599,012 hab.
The second largest spanish speaking country in the world and among the 30 most populated 255,07 204,5 121,1 101,4 91,6 68,8 50,6 48,2 42,4 31,9 30,8 18,0 9,8 8,6 8,4 8,2 7,3 5,5 5,2 4,6 Population 2015* (millions) * Estimated. Source: IMF, 2015. Latin America economies
Colombia is within the largest economies in the world and one of the largest non-OECD economies 190 192 204 250 296 307 308 310 328 332 381 386 421 487 563 688 896 1,232 1,435 1,904 Peru New Zealand Vietnam Chile Singapore Israel Philippines Hong Kong Malaysia Colombia Austria Thailand Norway Sweden Argentina Switzerland Indonesia Mexico South Korea Brazil GDP current prices 2015* (US$ billions) * Estimated. Source: IMF, 2015. Latin America economies
GDP per capita in Colombia had a threefold growth in just a decade, going from US$2,200 in 2003 to US$8,000 in 2014 2.053 2.865 3.534 5.445 6.458 8.076 10.715 10.804 11.604 12.873 14.447 28.101 36.991 39.871 43.837 51.307 56.319 58.491 87.475 97.013 Vietnam Philippines Indonesia Thailand Peru Colombia Mexico Malaysia Brazil Argentina Chile South Korea Israel Hong Kong New Zealand Austria Singapore Sweden Switzerland Norway Source: IMF, 2015. GDP per capita, current prices 2014 (US$) Latin America economies
During the past five years, Colombia ranked second in terms of economic growth, among the largest countries in the region Gross Domestic Product, average growth 2010 - 2014 Colombian growth drivers according to OECD For Colombia data, corresponds to real GDP growth reported for 2014 according to DANE. For the rest of L.A data corresponds to the estimated growth for 2014 according to IMF (World Economic Outlook Update – July 2014). 100 5,8% 4,8% 4,4% 4,6% 3,7% 1,1% 3,3% 3,2% Colombia Peru Mexico Chile LATAM Brazil Argentina Venezuela High investment in housing and infrastructure (12% growth) Growth in private consumption (4.6%) Solid labor market Public expenditure
Among the largest Latin American countries, Colombia has the highest forecasted growing rate in 2015 Source: IMF (World Economic Outlook – October 2015) e = estimated Gross Domestic Product Average growth 2015 Image taken from: http://www.agenciadenoticias.unal.edu.co/typo3temp/pics/e16bc4deb4.jpg 100 Peru Colombia Mexico Chile LatinAmerica Brazil Venezuela 2,5% 2,4% 2,3% 2,3% -0,3% -3,0% -10% Argentina 0,4%
Inflation in Colombia shows a downward trend for over 2 decades Source: Banco de la República. 32,36% 26,82% 25,13% 22,60% 22,59% 19,46% 21,63% 17,68% 16,70% 9,23% 8,75% 7,65% 6,99% 6,49% 5,50% 4,85% 4,48% 5,69% 7,67% 2,00% 3,17% 3,73% 2,44% 1,94% 3,66% 4,00% 00% 05% 10% 15% 20% 25% 30% 35% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Inflation, annual variation 1990 – 2014 Target inflation range 2015: 2% - 4% Image taken from: https://blog.mint.com/wp-content/uploads/2013/12/Can-Peer-to-Peer-Lending-Save-the-Economy.jpg
Colombia, an investment-grade country with positive outlook Source: S&P Ratings; Dinero magazine, Colombian Treasury. RatingPerspectiveTerm Long Term – Foreign currency BBB BBB Baa2 Stable PositiveStable In July 2014, Moody´s was the last rating agency in improving Colombia´s rating due to two key drivers: 1. Positive growth forecast thanks to 4G infrastructure. 2. A sound fiscal management that will continue in the future. Long Term – Foreign currency Long Term – Foreign currency
50% 31% 28% 18% 9% 8% 16% 30% 2002 2003 2004 2005 2008 2009 2010 2011 2012 2013 2014 Agrowing middle class Source: Poverty: National Administrative Department of Statistics – DANE Middle class: The gained decade: the evolution of the middle class in Colombia between 2002 and 2011. Documento CEDE # 50. Universidad de los Andes. And RADDAR for 2013 data. Percentage of people in poverty 2002 – 2014 Poverty Middle Class Extremely Poverty Image taken from: https://encrypted-tbn2.gstatic.com/images?q=tbn:ANd9GcQ79OzZHG0AAyCQ8zoXkPS0SP4MuUBsz16sgncuMCIT7Vo5iH2R Colombia has continuously decreased its poverty levels
16% 25% 37% 46% 2002 2012 2020 2025 In 2025, the middle class will account for 46% of the population Average real growth of consumer expenditure, 2014 – 2018 Middle class* in Colombia as a percentage of total population (Millions inhabitants) * Calculus based on a 4.6% GDP growth Middle class: Monthly household income between 3.2MW and 13MW (MW) Minimum wage in Colombia 2014: USD 320. Source: Fedesarrollo (2013) and Euromonitor 19.0 11.6 6.7 24.7 2.9% 4.1% 4.2% 4.7% 5.5%PER COL CHI MEX BRA Imagen tomada de: http://www.sen-soyle.com/g/1modern_wall_texture_30.jpg
Source: World Bank. Doing Business 2016. *Positive numbers indicate an improvement in the business environment In 2016, the World Bank changed its methodology including new variables for 5 topics: Dealing with construction permits, getting electricity, enforcing contracts and labor market regulation. Photo taken from: http://orig12.deviantart.net/1026/f/2008/176/b/4/brick_road_2_texture_by_jay_b_rich.jpg Colombia with the most reforms in Latin America towards the improvement of Business environment Country Ranking 2016 # de reforms 2006 - 2016 Mexico 38 23 Chile 48 13 Peru 50 21 Colombia 54 30 Panama 58 13 Brazil 116 11 Ecuador 117 23 Argentina 121 5 Ranking Doing Business* 2007-2016 Change in positions 25 23 12 6 5 5 3 -20 Colombia Panama Chile Ecuador Mexico Brazil Peru Argentina
COLOMBIA WAS OFFICIALLY INVITED ON MAY 2013 TO INITIATE THE PROCESS TO BECOME FULL MEMBER OF THE OECD “The OCDE investment policy review examines Colombia's achievements in developing an open and transparent investment regime and its efforts to reduce restrictions on international investment” OECD Colombia is implementing the roadmap to become full member of the OECD PROCOLOMBIA.CO
Colombia´s Investment and Trade
0,00 0,05 0,10 0,15 0,20 0,25 0,30 0,35 0,40 0,45 China Myanmar SaudiArabia Indonesia Jordan India NewZealand Malaysia Mexico Tunisia Russia Canada Iceland Kazakhstan Korea Australia Israel Ukraine Austria Brazil Mongolia UnitedStates Norway Switzerland Kyrgyzstan Peru Poland Morocco Egypt UnitedKingdom Turkey Sweden Chile SouthAfrica Italy Japan CostaRica SlovakRepublic France Ireland Belgium Argentina Latvia Lithuania Denmark Greece Hungary Colombia Germany Spain Finland Estonia Netherlands CzechRepublic Romania Slovenia Portugal Luxembourg FDI Regulatory Restrictiveness Index Closed = 1 - Open = 0 COLOMBIA Low barriers to FDI FDI Restrictiviness index 2013 Source: OECD Image taken from: http://www.murando.es/mediacache/catalog/product/cache/6/5/32856/image/5e06319eda06f020e43594a9c230972d/32856_1.jpg Latin America economies Average OECD Average
Developed economies 2014 Developed economies 2013 Developing and transition economies 2014 Developing and transition economies 2013 Colombia remains as one of the top 20 destinations for FDI Source: UNCTAD – World Investment Report 2013 and 2014 Top 20 host economies in 2014 (USD billion) 0 43 16 -5 69 -23 19 45 42 17 32 28 52 54 64 65 48 231 74 124 14 15 16 19 21 22 23 23 2323 30 34 54 71 62 68 72 92 103 129 Rank18
Colombia recorded US$16,257 million of inward FDI in 2014 3.391 4.675 6.201 6.432 6.612 7.607 8.682 9.200 9.899 10.036 10.799 12.566 16.257 21.914 22.580 22.795 22.949 62.495 67.523 103.254 New Zealand Austria Philippines Israel Argentina Peru Norway Vietnam South Korea Sweden Malaysia Thailand Colombia Switzerland Indonesia Mexico Chile Brazil Singapore Hong Kong FDI inflows 2014 (US$ millions) Source: UNCTAD – World Investment Report 2015. Latin America economies
NON OIL AND MINING SECTORS ARE TAKING A LARGER SHARE OF INWARD FDI Source: Balance of Payments - Banco de la República. Share of all countries with positive cumulative investment, The information includes reinvested profits or investments in the oil sector Note: the list of the top countries investing in Colombia does not include Panama. Top Investing Countries in Colombia 2000– 2015 IIQ FDI Inflows. 2008 –2015 II Q US$ million UNITED STATES •22% UNITED KINGDOM •13% SPAIN •8.5% SWITZERLAND •6.2% TOTAL 2005 – 2015 IIQ: US$ 131,733 4,197 7,095 8,120 9,838 4,646 4,328 5,722 7,945 8,809 6,313 4,169 2,507 Promedio 2008-2011 2012 2013 2014 2014 II Q 2015 II Q 6,835 8,815 16,209 15,039 9,919 16,151 Oil and mining Other sectors
COLOMBIA HAS ACCESS TO MORE THAN 45 COUNTRIES AND 1,500 MILLION CONSUMERS THROUGH ITS NETWORK OF TRADE AGREEMENTS Source: Colombian Ministry of Commerce, Industry and Tourism. 2015. *These are Partial Scope Agreements (PSA) - - - The dotted line refers to member countries of The Pacific Alliance other than Colombia. – Chile, Peru and México. Canada United States Mexico Guatemala Honduras El Salvador Ecuador Brazil Peru Argentina Paraguay Uruguay EFTA European Union Turkey Israel Japan Panama Chile Bolivia Costa Rica Venezuela* Pacific Alliance South Korea Cuba* Nicaragua* In force Signed In negotiation
Colombia: A gateway to the Pacific Alliance Source: IMF – UNCTAD, 2015. Mexico Colombia Peru Chile GDP of US$2,129 billion The members generate 37% of the region´s GDP Population of 219 million More than Brazil´s population FTAs with 60 countries Access to benefits of markets that represent 86% of the World GDP MILA is the first cross border initiative to integrate equities markets, without any sort of merger or global corporate integration, using only technological tools along with. Listed companies: 590 44% of the regional FDI Total FDI of US$69,608 million (2014)
38.432 16.363 54.795 - 10.000 20.000 30.000 40.000 50.000 60.000 2014 US$millions Non mining Mining 15% 8% 6% 5% 4% 4% 58% Non mining exports by subsector Coffee Fresh flowers Plastics in primary forms Banana Cosmetics and toiletries Confections Others 23% 10% 6% 5% 5% 51% Non mining exports by country United States Venezuela Peru Brazil Mexico Others In 2014, 30% of Colombian non mining exports were concentrated in coffee (15%), fresh flowers (8%) and plastics (6%) Source: DANE. 29.9% Colombian Exports
7.551 53.536 61,088 - 10.000 20.000 30.000 40.000 50.000 60.000 70.000 2014 US$millions Non mining Mining 9% 8% 8% 7% 5% 63% Non mining imports by subsector Vehicles Telecommunications and sound Industrial machinery Other transportation Manufacturing of iron or steel Others 21% 20% 9%5% 4% 41% Non mining imports by country China United States Mexico Germany Brazil Others In 2014, more than 30% of the Colombian non mining imports came from China and United States Source: DANE. 87.6% Colombian Imports
4.590 43,561 1994 - 2003 2004 - 2015 IIQ The stock of investment flows from Colombia to the world had a twelvefold growth since 2002 Source: Banrep, 2015 Source TOP three Latin American investors: EIU, 2015 Stock of outward FDI 1994 – 2015 IIQ, US$ million Top Latin American investors to the world (2014) USD million BRAZIL • US$ 26,020 CHILE • US$ 11,949 MEXICO • US$ 7,610 COLOMBIA • US$ 3,899
10,0% 4,0% 4,0% 4,0% 4,0% 5,0% 6,0% 7,0% 8,0% 11,0% 28,0% Other sectors Pharmaceuticals Petrochemicals Hotels and tourism Construction materials Chemicals ICT Utilities Financial services Processed foods Apparel retail We have identified more than 45O expansion operations overseas, driven by 123 Colombian companies which have undertaken an internationalization process through investments abroad Source: fDi Markets, EMIS and mass Agribusiness 12% Manufacturing 23% Services 39% Fashion industry 26% Distribution of companies by sector Main subsectors % of companies THE EXPANDING ROLE OF COLOMBIAN “MULTILATINAS”
We have identified more than 500 operations, with different international expansion models, around the globe Number of Operations 50-60 40-50 30-40 20-30 10 and 20 Peru Panama U.S.A México Main investment destinations
Investment cases of Colombian companies Alpina has 3 production plants in Ecuador, Peru and the United States. The latter plant has created 50 new direct jobs and has a yearly production capacity of 4,000 tons of yogurt. Nutresa is a multinational company with investments in Malaysia, Chile, Dominican Republic, Mexico, Nicaragua, Peru, Panama, Costa Rica and Puerto Rico. In 2014, Nutresa invested in the construction of a new factory of crackers in Texas. Argos has become one of the largest concrete producers in the state of Florida and the southeastern region. The company also has invested in Puerto Rico, Honduras and French Guyana. Corona has invested in Brazil, Mexico, China and the United States. The reinvestment objective of its plant in Perrysville (Ohio) was to increase its production of plumbing products by 50% in the upcoming years. Source: DINERO Magazine, July 2014 Grupo Phoenix has emerged as the Latin American leader in packaging solutions. With 5 production plants: Virginia, Arizona, México, Venezuela and Ecuador.
Investment Opportunities
Source: Ministry of Transport - The annual avarage exchange rate for 2014 US$=2.001,1 Sectors of opportunity – Infrastructure: A major drive for growth Airports Interventions US$ 1.8 Bill (10 projects) and constructions US$ 2.3 Bill (2 projects). (2015-2018) Ports US$ 2.1 Bill. (2015-2018) Roads US$ 24 Bill. Fourth Generation of PPP’S (4g) Intervention of 8.000 Km of Roads 1.300 Km of new Roads 40 new concessions River Navigability US$ 1.3 Bill. Improvement of the Magdalena Step Rail Ways US$ 4.2 Bill. Concession Program (feasibility study – step 2)
0 Sectors of opportunity – Infrastructure: A major drive for growth Source: DINERO Magazine, July 2014 In 2014, Iridium awarded two road concession projects in the government’s “highway concession program (4G)”. Those projects sum 78 Km long and will help with the strengthening of the transportation infrastructure. Strabag will participate in a highway project in the country. it involves the completion of 75 km of new highway, the modernization of a 65 km section and the construction of numerous bridges and tunnels. In 2015, Ferrovial has awarded the design, construction, financing, operation and maintenance of a road concession of 152 km long. They have also developed other projects such as tunnels in Ituango hydroelectric plant and some other highways. OHL is participating in the construction and future operation of a highway of 144 km long. The project will include the construction of 2 tunnels and 79 bridges; it will reduce the transport time between the center and the north coast of the country. Spain Austria Spain Spain
Sectors of opportunity – Energy: a diversified source base and a pivotal location in the Americas Source: World Economic Forum 2014 and UPME * UPME (Colombian Planning Unit of Mines and Energy). MW approx. 0,66 0,67 0,67 0,7 0,71 0,72 0,72 0,72 0,73 0,75 Latvia Costa Rica Spain Colombia Denmark Switzerland Sweden France New Zealand Norway The Global Energy Architecture Performance Index 2014Colombia was ranked first in Latin America and seventh in the world according to the “Energy Architecture Performance Index 2014”. WEF, 2014. 103Power Generation projects in different stages: Installed capacity of 4,974 MW* 13power transmission projects in different stages* High potential in Biofuels and alternative energies Wind GeothermalSolarBiomass Solid Residues Gas Some niche with oportunities
0 Source: DINERO Magazine, July 2014 Endesa, subsidiary of the Italian group Enel, acquired participation in Emgesa and Betania power generation companies with 2,895 MW of installed capacity. The company has also investment in Codensa, main power distribution and trading Company in Bogota and other cities. Union Fenosa bought " Electricaribe and Electrocosta " and became the main power distribution and trading company in the north coast of Colombia. Fenosa also manage natural gas and currently has more than 4 million users through the country. Colombia subsidiary of AES Corporation (Applied Energy Services). Chivor is one of the country's largest generator with a total effective installed capacity of 1,000 MW. The low-grade coal-fired power plant Termopaipa in Paipa (Colombia) was the first power plant abroad which was planned, financed and built by Steag. Spain Spain United States Germany Sectors of opportunity – Energy: a diversified source base and a pivotal location in the Americas
Sectors of opportunity – Oil and gas goods and services South American oil production in 2014 KBPD Brazil 2,346 Argentina 629 Peru 110 Ecuador 556 Colombia 990 Venezuela 2,700 Colombia is within the top twenty oil producing countries in the world Source: BP Statistical Review of World Energy 2015. Goods and services for the Offshore industry Exploration: 23 blocks. Round 2014 results: 5 blocks awarded. Offshore potential resources would multiply by 6 oil reserves in Colombia; gas reserves would triple as well. Non-conventional resources 7 shale gas and oil gas basins. Colombia is the third country in South America with the greatest potential in Shale gas and Shale oil after Brazil and Argentina. ACP (Colombian Oil Association): 36 oil wells are expected between 2014 and 2016.
0 The group of companies specializing in services for the oil industry, since 2007 have been seeking new strategic partnerships with Colombian companies to expand its coverage in the domestic market. The Company arrived to Colombia in 1943. They offer general provision of services for the oil industry and develop several projects related with and supporting the oil sector process The Peruvian company, leader in fixed and temporary building solutions, has developed projects in temporary housing and other infrastructure for the oil and mining sector. The Canadian signed an agreement to acquire all of the shares of SAI Colombia. This will take control of 37% of oil platforms in the Colombian market and become the largest operator of holes in the country. China United States Peru Canada Sectors of opportunity – Oil and gas goods and services
Sectors of opportunity – Manufacturing: manufactures for the local and foreign markets Some niche with opportunities Domestic market with potential growth • Colombia's middle class will triple in the next ten years. • Colombia's purchasing power has doubled in the last 10 years. • According to Fedesarrollo, the expected growth will be higher than 5% in the next three years. Capable workforce and reliable business network • More than 400,000 graduates and specialists in engineering related areas between 2000 and 2013. • More than 3,700 industrial companies with export experience. A well-established exporting platform for the manufacturing sector • 13 Trade Agreements granting tariff-free access to a market with approximately 1.5 Billion consumers. Automotive Ceramic Metalworking Architectural glass Fertilizers Plastic Packaging Natural ingedients for consmetics Pesticides
0 Source: DINERO Magazine, July 2014 Its factory in Colombia is among the three most efficient in the world due to its results in productivity and competitiveness. The new factory is one of its three most modern factories in the world. The products manufactured there are free of phosphates, which shows its modern approach and care for the environment. The factory located in Colombia is the most efficient and ranks first (it has 8 in total) by its good performance in production processes and high international standards of manufacturing. In 2014, Mexichem opened the most modern and automated plant in Latin America to manufacture pipes made of polyester resin reinforced with fiberglass. Germany Netherlands & United Kingdom Germany Mexico A regional platform for manufacturing activities with high standards of productivity
0 Source: DINERO Magazine, July 2014 Its factory in Colombia is one of the most productive and sustainable and is listed as one of the 'focus factories' for the group, which has operations in more than 130 countries. French company Saint Gobain set up in Colombia one of the most modern plants in the region to supply glass to the automotive industry market. The French cosmetic producer acquired the Colombian company Laboratorios Cósmeticos Vogue in 2013. With this acquisition the multinational has positioned its brand locally and regionally. The company begun operations in Colombia in 2008. UPL Colombia is the group's exporting platform in the Americas, exporting more than 95% of its production towards major markets like United States, Mexico, Brazil and Argentina. Switzerland France France India A regional platform for manufacturing activities with high standards of productivity
Sectors of opportunity – Automotive Sales of vehicles in Colombia. Thousands of unitsIn 2014, Colombia set a new record in car sales with more than 328,000 units. 8 OEM´s (Original Equipment Manufacturer) have facilities in Colombia. 73% of cargo is transported by road. Colombia is the second largest producer of motorcycles in the region. The production of auto parts has doubled in last ten years. Assembly of passenger vehicles Some niche with opportunities Assembly of cargo vehicles Assembly of motorcycles Manufacture of auto parts 253,9 324,6 316,0 293,8 328,5 350,9 362,8 381,0 398,7 436,0 2010 2011 2012 2013 2014 2015e 2016e 2017e 2018e 2019e Source: ANDI and Business Monitor International Source: ANDI.
0 The North American company General Motors, invested to create its own Industrial Free Trade Zone for stamping processes. Daimler, along with DANA, invested in a plant for the assembly of passenger vehicles. An estimated 3,000 unit per year will be assembled by 2015. The North American company Johnson Controls made an alliance with Baterías Mac for lead batteries production destined to the local market, Central, South America and The Caribbean. Foton recently invested in a new assembly facility for its SUV models. United States Germany United States China Sectors of opportunity – Automotive
Source: MinTic and IDC Sectors of opportunity – Services IT, BPO, ITO, Shared Services, Apps Colombia is one the three major providers of IT services in the region. The broadband connections increased from 2.2 to 8.8 millions between 2010 and 2014 In the next 4 years, the broadband connections will be tripled reaching 27 million connections Available labor force of more than 1,200,000 professionals graduated in fields related to financial and value added shared service operations Some niche with oportunities Cloud computing Big data Software develpment Innovation and development centers Agregated shared services centres for diverse industries
0 Source: DINERO Magazine, July 2014 In September of 2014 the assembly of IBM’s third Data Center in Colombia was made official, with a processing capacity of 5 petabytes, makes it one of the most advanced centers for Cloud Computing and Big Data Analytics in the country It has two operations centers in Bogota where it manages a diversified portfolio of blue ribbon clients, with the capacity for up to a thousand positions. In Colombia the operation currently has more than 1,400 active work positions in credit processes, customer service, and document management, attending and responding to clients in sectors that include banking, manufacturing, mining, mass consumption, among others The Operation of the Diageo Shared Services Center in Bogota serves 12 markets in the region and has about 110 positions. Software & IT Services United States BPO Spain BPO & IT Japan Shared Services United Kingdom Sectors of opportunity – Services IT, BPO, ITO, Shared Services, Apps
 Projects that increase availability of convention centers, exhibition centers and corporate hotels. Colombia ranks 25th in the ICCA ranking (International Congress and Convention Association) Sectors of opportunity Tourism infrastructure, real estate and retail  Increase availability of Hotel rooms in secondary cities.  Projects that develop adequate infrastructure and that take advantage of Colombia´s nature and wellness potential, reflected in the countries biodiversity and the quality of it´s health services.  Investment in luxury hospitality. Investment Opportunities in: Nature & Adventure Wellness City HotelsEntertainment Some niche with oportunities 2012 2013 2014 3.5 3,7 4,2 Inbound tourist* 2012 – 2014 (millions of people) * Inbound tourist includes: resident Colombians abroad, foreign non resident in Colombia, special cross borders, and cruise visitors. Source: Migration Colombia and MinCIT. ProColombia calculations.
Sectors of opportunity Tourism infrastructure, real estate and retail Source: DINERO Magazine, July 2014 This American chain opened its first hotel in Bogota's financial district (73rd Street), with approximately 240 rooms focusing on business tourism. Hilton operates in the Caribbean region of Colombia through the Hampton brand in Cartagena and Barranquilla. Holiday Inn hotels opened in Bogota and Cartagena, and combined provide 331 rooms. Also, there is a Holiday Inn Express in Bogota with 76 rooms, one in Cucuta with 98 rooms, and one in Bucaramanga with 170 rooms. Currently, there is an Intercontinental hotel under construction in Cartagena. The American company Marriott International operates in Bogota with a 239-room hotel located in the southern section of El Dorado Avenue, 15 minutes away from the international and domestic air terminals. Also, the prestigious 264-room JW Marriott hotel opened in Bogota’s financial district (72nd Street), and a 182-room Marriott hotel will soon open in Cali. Ibis Bogota is located in the International Center (one of Bogota’s business districts), close to the National Museum, 15 minutes from the Colonial Candelaria district and 45 minutes away from the airport. Medellin also has an Accor hotel brand which has added 216 rooms to the city. United States United Kingdom United States France
Rubber Biofuels  Build specialized industrial facilities to transform natural rubber into value-added items.  Build biorefineries, biomass plants and / or development of transesterification intended to transform the palm oil into biodiesel.  Establish local partnerships and invest in biotechnology laboratories to develop quality seeds.  Build cocoa plants to process cocoa byproducts such as cocoa butter, cocoa liquor and chocolate products. Sectors of opportunity - Agribusiness Forestry Some niche with opportunities Investment Opportunities Aquaculture Cacao Cereals Fruits and vegetables Meat Processed food
Source: DINERO Magazine, July 2014 Sectors of opportunity - Agribusiness 0 Dole, the North American multinational, began to operate a plant of salads and a distribution center of production in Colombia, projects in which the company had to invest around US$15 million. Smurfit Kappa is one of the leading providers of paper- based packaging solutions in the world, with around 43,000 employees in approximately 350 production sites across 33 countries and with revenue of €8.1 billion in 2014. Entered the country in 2007 as a result of a joint venture with the Colombian company Alquería, combining the international experience and the innovation capacity and development of Danone with the know how and knowledge of the local market of Alquería. Chile Ireland France
Sectors of opportunity – Oil palm and rubber Agricultural GDP in Latin America 4th country in the world with higher oil palm production: 1.2 million tons (3.1% of the global demand). Colombia produces 20% of the South American rubber: 44,100 tonnes/year. High potential tire demand: between 2008 and 2013, sales in excess of 6.4 million tires were estimated and the figure could be higher. Oil and fat processed food Rubber auto parts Biofuels Some niche with opportunities 4% 4% 5% 6% 6% 6% 7% 9% 0% 2% 4% 6% 8% 10% Venezuela Mexico Brazil Ecuador Latam Peru Colombia Argentina Source: FAO, Ministry of Agriculture.
0 Mitsubishi has become partner with Ecopetrol in the project Bioenergy (Ethanol Production, 2012). Likewise, Mitsubishi aqcuired a part of Colombian BioOriente (which is building the largest biodiesel plant of Colombia) A factory of radial tires for trucks and neumatic tires, among others, operates in Yumbo (Valle del Cauca). The first air-retreading plant for Latin America will begin operations in Colombia. Merhav produces more than 376,000 lt/daily in a 10,000 hectares plant of sugar cane located in Magdalena. Merhay contributes to generate around 1.000 direct jobs in Colombia. AAK has acquired the Fabrica Nacional de Grasas S.A. (FANAGRA), a Colombian company that specializes in vegetable oils and fats for the bakery segment. The company has 155 employees and an annual volume of production of 30,000 tonnes. Japan United States Israel Sweeden Sectors of opportunity – Oil palm and rubber
No import duties. VAT exemption for goods sold from Colombia to FTZ. Benefit from international trade agreements. Allows sales to the local market. Free trade zones for different investor styles. REDUCED INCOME TAX AND SALES ALLOWED TO THE LOCAL MARKET Free Trade Zone (102) “Special Standing Uniempresarial” (FTZ) (62) Permanent Free Trade Zone (40)
Investment cases in colombian free trade zones Source: DINERO Magazine, July 2014 Teleperformance Colombia has 11 campuses and approximately 10,000 employees in its offices in Bogota and Medellin. The company stands out for providing nearshore services in Colombia (United States) and Offshore (Spain). In 2015, opened a precision component factory in the country. It’s the first midsize Japanese company who decides to invest in Colombia. Through the construction of the largest assembly plant in Latin America, Hero MotoCorp serves the markets of Central and South America. Mexican Coca-Cola Femsa bottling plant in Tocancipá free trade zone is the starting point of FEMSA Industrial Park, the first cluster of soft drinks in the country. France Japan India Mexico
Summing up, Colombia offers: A dynamic and stable and economy An agency, PROCOLOMBIA, ready to assist you in assessing investment opportunities A solid base of expanding Colombian companies to partner with to reach the local and regional markets Diverse Opportunities for investment in a wide variety of sectors A platform to reach third markets through a network of FTAs A very interesting and expanding market
THANK YOU

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Colombia Presentation December 2015

  • 1.
    Investment environment and businessopportunities in Colombia December, 2015
  • 2.
  • 3.
    PROCOLOMBIA AROUND THEWORLD United States / Canada / Mexico / Guatemala / Costa Rica / Caribbean / Venezuela / Brazil / Ecuador / Chile / Peru / Argentina / Spain / Germany / Portugal. / United Kingdom / France /Turkey / United Arab Emirates / India / China / South Korea / Russia / Japan / Singapore / Indonesia. 26 commercialoffices 30countries
  • 4.
    CONTENT Colombia´s Economic Overview Colombia´sInvestment and Trade Investment Opportunities 1 2 3
  • 5.
  • 7.
    Around 1.0 million of oil barrel perday 3rd oil producer in the region COLOMBIA’S GENERAL FACTS Fifth coal exporter worldwide First exporter in Latin America Fourth largest producer of crude palm oil in the world Over 1.0 million tons produced Country with the highest biodiversity per km2 Among the 17most megadiverse countries of the planet
  • 8.
    LESS THAN 6HOURS TO THE MAIN CAPITAL CITIES IN LATIN AMERICA * This information takes into account the routes departing from international airports in Barranquilla, Bogota, Cali, and Medellin. Source: Routes and Tariffs- Tools for the Colombian Exporter, Processed by Proexport Colombia. New York (5hr 35min) Los Angeles (9hr 25min) Mexico City (4hr 20min) Paris (13hr 20min) Madrid (9hr 40min) London (14hr 05min) Tokyo (25hr 05min) Beijing (24hr 40min) Dubai (19hr 40min) Moscow (17hr) Miami (4hr 30 min) Lima (3hr 10 min) Santiago de Chile (6hr 55 min) Berlin (14hr 10 min) Hong Kong (24hr 15min) Toronto (8hr 54 min) Mumbai (24hr 30min) Seoul (23hr 35min) Sao Paulo (5hr 50min) 878 INTERNATIONAL DIRECT FREQUENCIES PER WEEK. MORE THAN 4,500 DOMESTIC FREQUENCIES PER WEEK.
  • 9.
    A country with multipledevelopment poles and regions Caribbean Region Andean Region Pacific Region Orinoco RegionAmazon Region  Agribusiness  Automotive  Infrastructure  BPO & KPO  IT Services  Hotel & Tourism Infrastructure  Agribusiness  Oil Goods and Services  Automotive  BPO  Hotel & Tourism Infrastructure  Shared Services Centers  Agribusiness  Metalworking  Chemicals  Automotive  Hotel & Tourism Infrastructure  Agribusiness  Hotel & Tourism Infrastructure  Agribusiness  Hotel & Tourism Infrastructure Colombia has 9 cities with over 500,000 inhabitants and 37 with more than 250,000 inhabitants. It is expected that by 2020, 14 cities have more than 500 thousand inhabitants. Cartagena 990,179 hab. Medellín 2,441,123 hab. Cali 2,344,734 hab. Ibagué 512,631 hab. Bogotá 7,776,845 hab. Bucaramanga 527,451 hab. Cúcuta 643,666 hab. Barranquilla 1,212,943 hab. Soledad 599,012 hab.
  • 10.
    The second largestspanish speaking country in the world and among the 30 most populated 255,07 204,5 121,1 101,4 91,6 68,8 50,6 48,2 42,4 31,9 30,8 18,0 9,8 8,6 8,4 8,2 7,3 5,5 5,2 4,6 Population 2015* (millions) * Estimated. Source: IMF, 2015. Latin America economies
  • 11.
    Colombia is withinthe largest economies in the world and one of the largest non-OECD economies 190 192 204 250 296 307 308 310 328 332 381 386 421 487 563 688 896 1,232 1,435 1,904 Peru New Zealand Vietnam Chile Singapore Israel Philippines Hong Kong Malaysia Colombia Austria Thailand Norway Sweden Argentina Switzerland Indonesia Mexico South Korea Brazil GDP current prices 2015* (US$ billions) * Estimated. Source: IMF, 2015. Latin America economies
  • 12.
    GDP per capitain Colombia had a threefold growth in just a decade, going from US$2,200 in 2003 to US$8,000 in 2014 2.053 2.865 3.534 5.445 6.458 8.076 10.715 10.804 11.604 12.873 14.447 28.101 36.991 39.871 43.837 51.307 56.319 58.491 87.475 97.013 Vietnam Philippines Indonesia Thailand Peru Colombia Mexico Malaysia Brazil Argentina Chile South Korea Israel Hong Kong New Zealand Austria Singapore Sweden Switzerland Norway Source: IMF, 2015. GDP per capita, current prices 2014 (US$) Latin America economies
  • 13.
    During the pastfive years, Colombia ranked second in terms of economic growth, among the largest countries in the region Gross Domestic Product, average growth 2010 - 2014 Colombian growth drivers according to OECD For Colombia data, corresponds to real GDP growth reported for 2014 according to DANE. For the rest of L.A data corresponds to the estimated growth for 2014 according to IMF (World Economic Outlook Update – July 2014). 100 5,8% 4,8% 4,4% 4,6% 3,7% 1,1% 3,3% 3,2% Colombia Peru Mexico Chile LATAM Brazil Argentina Venezuela High investment in housing and infrastructure (12% growth) Growth in private consumption (4.6%) Solid labor market Public expenditure
  • 14.
    Among the largest Latin American countries, Colombiahas the highest forecasted growing rate in 2015 Source: IMF (World Economic Outlook – October 2015) e = estimated Gross Domestic Product Average growth 2015 Image taken from: http://www.agenciadenoticias.unal.edu.co/typo3temp/pics/e16bc4deb4.jpg 100 Peru Colombia Mexico Chile LatinAmerica Brazil Venezuela 2,5% 2,4% 2,3% 2,3% -0,3% -3,0% -10% Argentina 0,4%
  • 15.
    Inflation in Colombiashows a downward trend for over 2 decades Source: Banco de la República. 32,36% 26,82% 25,13% 22,60% 22,59% 19,46% 21,63% 17,68% 16,70% 9,23% 8,75% 7,65% 6,99% 6,49% 5,50% 4,85% 4,48% 5,69% 7,67% 2,00% 3,17% 3,73% 2,44% 1,94% 3,66% 4,00% 00% 05% 10% 15% 20% 25% 30% 35% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Inflation, annual variation 1990 – 2014 Target inflation range 2015: 2% - 4% Image taken from: https://blog.mint.com/wp-content/uploads/2013/12/Can-Peer-to-Peer-Lending-Save-the-Economy.jpg
  • 16.
    Colombia, an investment-grade country with positiveoutlook Source: S&P Ratings; Dinero magazine, Colombian Treasury. RatingPerspectiveTerm Long Term – Foreign currency BBB BBB Baa2 Stable PositiveStable In July 2014, Moody´s was the last rating agency in improving Colombia´s rating due to two key drivers: 1. Positive growth forecast thanks to 4G infrastructure. 2. A sound fiscal management that will continue in the future. Long Term – Foreign currency Long Term – Foreign currency
  • 17.
    50% 31% 28% 18% 9% 8% 16% 30% 2002 20032004 2005 2008 2009 2010 2011 2012 2013 2014 Agrowing middle class Source: Poverty: National Administrative Department of Statistics – DANE Middle class: The gained decade: the evolution of the middle class in Colombia between 2002 and 2011. Documento CEDE # 50. Universidad de los Andes. And RADDAR for 2013 data. Percentage of people in poverty 2002 – 2014 Poverty Middle Class Extremely Poverty Image taken from: https://encrypted-tbn2.gstatic.com/images?q=tbn:ANd9GcQ79OzZHG0AAyCQ8zoXkPS0SP4MuUBsz16sgncuMCIT7Vo5iH2R Colombia has continuously decreased its poverty levels
  • 18.
    16% 25% 37% 46% 2002 2012 20202025 In 2025, the middle class will account for 46% of the population Average real growth of consumer expenditure, 2014 – 2018 Middle class* in Colombia as a percentage of total population (Millions inhabitants) * Calculus based on a 4.6% GDP growth Middle class: Monthly household income between 3.2MW and 13MW (MW) Minimum wage in Colombia 2014: USD 320. Source: Fedesarrollo (2013) and Euromonitor 19.0 11.6 6.7 24.7 2.9% 4.1% 4.2% 4.7% 5.5%PER COL CHI MEX BRA Imagen tomada de: http://www.sen-soyle.com/g/1modern_wall_texture_30.jpg
  • 19.
    Source: World Bank.Doing Business 2016. *Positive numbers indicate an improvement in the business environment In 2016, the World Bank changed its methodology including new variables for 5 topics: Dealing with construction permits, getting electricity, enforcing contracts and labor market regulation. Photo taken from: http://orig12.deviantart.net/1026/f/2008/176/b/4/brick_road_2_texture_by_jay_b_rich.jpg Colombia with the most reforms in Latin America towards the improvement of Business environment Country Ranking 2016 # de reforms 2006 - 2016 Mexico 38 23 Chile 48 13 Peru 50 21 Colombia 54 30 Panama 58 13 Brazil 116 11 Ecuador 117 23 Argentina 121 5 Ranking Doing Business* 2007-2016 Change in positions 25 23 12 6 5 5 3 -20 Colombia Panama Chile Ecuador Mexico Brazil Peru Argentina
  • 20.
    COLOMBIA WAS OFFICIALLY INVITEDON MAY 2013 TO INITIATE THE PROCESS TO BECOME FULL MEMBER OF THE OECD “The OCDE investment policy review examines Colombia's achievements in developing an open and transparent investment regime and its efforts to reduce restrictions on international investment” OECD Colombia is implementing the roadmap to become full member of the OECD PROCOLOMBIA.CO
  • 21.
  • 23.
    0,00 0,05 0,10 0,15 0,20 0,25 0,30 0,35 0,40 0,45 China Myanmar SaudiArabia Indonesia Jordan India NewZealand Malaysia Mexico Tunisia Russia Canada Iceland Kazakhstan Korea Australia Israel Ukraine Austria Brazil Mongolia UnitedStates Norway Switzerland Kyrgyzstan Peru Poland Morocco Egypt UnitedKingdom Turkey Sweden Chile SouthAfrica Italy Japan CostaRica SlovakRepublic France Ireland Belgium Argentina Latvia Lithuania Denmark Greece Hungary Colombia Germany Spain Finland Estonia Netherlands CzechRepublic Romania Slovenia Portugal Luxembourg FDI Regulatory RestrictivenessIndex Closed = 1 - Open = 0 COLOMBIA Low barriers to FDI FDI Restrictiviness index 2013 Source: OECD Image taken from: http://www.murando.es/mediacache/catalog/product/cache/6/5/32856/image/5e06319eda06f020e43594a9c230972d/32856_1.jpg Latin America economies Average OECD Average
  • 24.
    Developed economies 2014 Developedeconomies 2013 Developing and transition economies 2014 Developing and transition economies 2013 Colombia remains as one of the top 20 destinations for FDI Source: UNCTAD – World Investment Report 2013 and 2014 Top 20 host economies in 2014 (USD billion) 0 43 16 -5 69 -23 19 45 42 17 32 28 52 54 64 65 48 231 74 124 14 15 16 19 21 22 23 23 2323 30 34 54 71 62 68 72 92 103 129 Rank18
  • 25.
    Colombia recorded US$16,257 millionof inward FDI in 2014 3.391 4.675 6.201 6.432 6.612 7.607 8.682 9.200 9.899 10.036 10.799 12.566 16.257 21.914 22.580 22.795 22.949 62.495 67.523 103.254 New Zealand Austria Philippines Israel Argentina Peru Norway Vietnam South Korea Sweden Malaysia Thailand Colombia Switzerland Indonesia Mexico Chile Brazil Singapore Hong Kong FDI inflows 2014 (US$ millions) Source: UNCTAD – World Investment Report 2015. Latin America economies
  • 26.
    NON OIL ANDMINING SECTORS ARE TAKING A LARGER SHARE OF INWARD FDI Source: Balance of Payments - Banco de la República. Share of all countries with positive cumulative investment, The information includes reinvested profits or investments in the oil sector Note: the list of the top countries investing in Colombia does not include Panama. Top Investing Countries in Colombia 2000– 2015 IIQ FDI Inflows. 2008 –2015 II Q US$ million UNITED STATES •22% UNITED KINGDOM •13% SPAIN •8.5% SWITZERLAND •6.2% TOTAL 2005 – 2015 IIQ: US$ 131,733 4,197 7,095 8,120 9,838 4,646 4,328 5,722 7,945 8,809 6,313 4,169 2,507 Promedio 2008-2011 2012 2013 2014 2014 II Q 2015 II Q 6,835 8,815 16,209 15,039 9,919 16,151 Oil and mining Other sectors
  • 27.
    COLOMBIA HAS ACCESSTO MORE THAN 45 COUNTRIES AND 1,500 MILLION CONSUMERS THROUGH ITS NETWORK OF TRADE AGREEMENTS Source: Colombian Ministry of Commerce, Industry and Tourism. 2015. *These are Partial Scope Agreements (PSA) - - - The dotted line refers to member countries of The Pacific Alliance other than Colombia. – Chile, Peru and México. Canada United States Mexico Guatemala Honduras El Salvador Ecuador Brazil Peru Argentina Paraguay Uruguay EFTA European Union Turkey Israel Japan Panama Chile Bolivia Costa Rica Venezuela* Pacific Alliance South Korea Cuba* Nicaragua* In force Signed In negotiation
  • 28.
    Colombia: A gateway tothe Pacific Alliance Source: IMF – UNCTAD, 2015. Mexico Colombia Peru Chile GDP of US$2,129 billion The members generate 37% of the region´s GDP Population of 219 million More than Brazil´s population FTAs with 60 countries Access to benefits of markets that represent 86% of the World GDP MILA is the first cross border initiative to integrate equities markets, without any sort of merger or global corporate integration, using only technological tools along with. Listed companies: 590 44% of the regional FDI Total FDI of US$69,608 million (2014)
  • 29.
    38.432 16.363 54.795 - 10.000 20.000 30.000 40.000 50.000 60.000 2014 US$millions Non mining Mining 15% 8% 6% 5% 4% 4% 58% Non miningexports by subsector Coffee Fresh flowers Plastics in primary forms Banana Cosmetics and toiletries Confections Others 23% 10% 6% 5% 5% 51% Non mining exports by country United States Venezuela Peru Brazil Mexico Others In 2014, 30% of Colombian non mining exports were concentrated in coffee (15%), fresh flowers (8%) and plastics (6%) Source: DANE. 29.9% Colombian Exports
  • 30.
    7.551 53.536 61,088 - 10.000 20.000 30.000 40.000 50.000 60.000 70.000 2014 US$millions Non mining Mining 9% 8% 8% 7% 5% 63% Non miningimports by subsector Vehicles Telecommunications and sound Industrial machinery Other transportation Manufacturing of iron or steel Others 21% 20% 9%5% 4% 41% Non mining imports by country China United States Mexico Germany Brazil Others In 2014, more than 30% of the Colombian non mining imports came from China and United States Source: DANE. 87.6% Colombian Imports
  • 31.
    4.590 43,561 1994 - 20032004 - 2015 IIQ The stock of investment flows from Colombia to the world had a twelvefold growth since 2002 Source: Banrep, 2015 Source TOP three Latin American investors: EIU, 2015 Stock of outward FDI 1994 – 2015 IIQ, US$ million Top Latin American investors to the world (2014) USD million BRAZIL • US$ 26,020 CHILE • US$ 11,949 MEXICO • US$ 7,610 COLOMBIA • US$ 3,899
  • 32.
    10,0% 4,0% 4,0% 4,0% 4,0% 5,0% 6,0% 7,0% 8,0% 11,0% 28,0% Other sectors Pharmaceuticals Petrochemicals Hotels andtourism Construction materials Chemicals ICT Utilities Financial services Processed foods Apparel retail We have identified more than 45O expansion operations overseas, driven by 123 Colombian companies which have undertaken an internationalization process through investments abroad Source: fDi Markets, EMIS and mass Agribusiness 12% Manufacturing 23% Services 39% Fashion industry 26% Distribution of companies by sector Main subsectors % of companies THE EXPANDING ROLE OF COLOMBIAN “MULTILATINAS”
  • 33.
    We have identifiedmore than 500 operations, with different international expansion models, around the globe Number of Operations 50-60 40-50 30-40 20-30 10 and 20 Peru Panama U.S.A México Main investment destinations
  • 34.
    Investment cases ofColombian companies Alpina has 3 production plants in Ecuador, Peru and the United States. The latter plant has created 50 new direct jobs and has a yearly production capacity of 4,000 tons of yogurt. Nutresa is a multinational company with investments in Malaysia, Chile, Dominican Republic, Mexico, Nicaragua, Peru, Panama, Costa Rica and Puerto Rico. In 2014, Nutresa invested in the construction of a new factory of crackers in Texas. Argos has become one of the largest concrete producers in the state of Florida and the southeastern region. The company also has invested in Puerto Rico, Honduras and French Guyana. Corona has invested in Brazil, Mexico, China and the United States. The reinvestment objective of its plant in Perrysville (Ohio) was to increase its production of plumbing products by 50% in the upcoming years. Source: DINERO Magazine, July 2014 Grupo Phoenix has emerged as the Latin American leader in packaging solutions. With 5 production plants: Virginia, Arizona, México, Venezuela and Ecuador.
  • 35.
  • 37.
    Source: Ministry ofTransport - The annual avarage exchange rate for 2014 US$=2.001,1 Sectors of opportunity – Infrastructure: A major drive for growth Airports Interventions US$ 1.8 Bill (10 projects) and constructions US$ 2.3 Bill (2 projects). (2015-2018) Ports US$ 2.1 Bill. (2015-2018) Roads US$ 24 Bill. Fourth Generation of PPP’S (4g) Intervention of 8.000 Km of Roads 1.300 Km of new Roads 40 new concessions River Navigability US$ 1.3 Bill. Improvement of the Magdalena Step Rail Ways US$ 4.2 Bill. Concession Program (feasibility study – step 2)
  • 38.
    0 Sectors of opportunity– Infrastructure: A major drive for growth Source: DINERO Magazine, July 2014 In 2014, Iridium awarded two road concession projects in the government’s “highway concession program (4G)”. Those projects sum 78 Km long and will help with the strengthening of the transportation infrastructure. Strabag will participate in a highway project in the country. it involves the completion of 75 km of new highway, the modernization of a 65 km section and the construction of numerous bridges and tunnels. In 2015, Ferrovial has awarded the design, construction, financing, operation and maintenance of a road concession of 152 km long. They have also developed other projects such as tunnels in Ituango hydroelectric plant and some other highways. OHL is participating in the construction and future operation of a highway of 144 km long. The project will include the construction of 2 tunnels and 79 bridges; it will reduce the transport time between the center and the north coast of the country. Spain Austria Spain Spain
  • 39.
    Sectors of opportunity– Energy: a diversified source base and a pivotal location in the Americas Source: World Economic Forum 2014 and UPME * UPME (Colombian Planning Unit of Mines and Energy). MW approx. 0,66 0,67 0,67 0,7 0,71 0,72 0,72 0,72 0,73 0,75 Latvia Costa Rica Spain Colombia Denmark Switzerland Sweden France New Zealand Norway The Global Energy Architecture Performance Index 2014Colombia was ranked first in Latin America and seventh in the world according to the “Energy Architecture Performance Index 2014”. WEF, 2014. 103Power Generation projects in different stages: Installed capacity of 4,974 MW* 13power transmission projects in different stages* High potential in Biofuels and alternative energies Wind GeothermalSolarBiomass Solid Residues Gas Some niche with oportunities
  • 40.
    0 Source: DINERO Magazine,July 2014 Endesa, subsidiary of the Italian group Enel, acquired participation in Emgesa and Betania power generation companies with 2,895 MW of installed capacity. The company has also investment in Codensa, main power distribution and trading Company in Bogota and other cities. Union Fenosa bought " Electricaribe and Electrocosta " and became the main power distribution and trading company in the north coast of Colombia. Fenosa also manage natural gas and currently has more than 4 million users through the country. Colombia subsidiary of AES Corporation (Applied Energy Services). Chivor is one of the country's largest generator with a total effective installed capacity of 1,000 MW. The low-grade coal-fired power plant Termopaipa in Paipa (Colombia) was the first power plant abroad which was planned, financed and built by Steag. Spain Spain United States Germany Sectors of opportunity – Energy: a diversified source base and a pivotal location in the Americas
  • 41.
    Sectors of opportunity– Oil and gas goods and services South American oil production in 2014 KBPD Brazil 2,346 Argentina 629 Peru 110 Ecuador 556 Colombia 990 Venezuela 2,700 Colombia is within the top twenty oil producing countries in the world Source: BP Statistical Review of World Energy 2015. Goods and services for the Offshore industry Exploration: 23 blocks. Round 2014 results: 5 blocks awarded. Offshore potential resources would multiply by 6 oil reserves in Colombia; gas reserves would triple as well. Non-conventional resources 7 shale gas and oil gas basins. Colombia is the third country in South America with the greatest potential in Shale gas and Shale oil after Brazil and Argentina. ACP (Colombian Oil Association): 36 oil wells are expected between 2014 and 2016.
  • 42.
    0 The group of companiesspecializing in services for the oil industry, since 2007 have been seeking new strategic partnerships with Colombian companies to expand its coverage in the domestic market. The Company arrived to Colombia in 1943. They offer general provision of services for the oil industry and develop several projects related with and supporting the oil sector process The Peruvian company, leader in fixed and temporary building solutions, has developed projects in temporary housing and other infrastructure for the oil and mining sector. The Canadian signed an agreement to acquire all of the shares of SAI Colombia. This will take control of 37% of oil platforms in the Colombian market and become the largest operator of holes in the country. China United States Peru Canada Sectors of opportunity – Oil and gas goods and services
  • 43.
    Sectors of opportunity– Manufacturing: manufactures for the local and foreign markets Some niche with opportunities Domestic market with potential growth • Colombia's middle class will triple in the next ten years. • Colombia's purchasing power has doubled in the last 10 years. • According to Fedesarrollo, the expected growth will be higher than 5% in the next three years. Capable workforce and reliable business network • More than 400,000 graduates and specialists in engineering related areas between 2000 and 2013. • More than 3,700 industrial companies with export experience. A well-established exporting platform for the manufacturing sector • 13 Trade Agreements granting tariff-free access to a market with approximately 1.5 Billion consumers. Automotive Ceramic Metalworking Architectural glass Fertilizers Plastic Packaging Natural ingedients for consmetics Pesticides
  • 44.
    0 Source: DINERO Magazine,July 2014 Its factory in Colombia is among the three most efficient in the world due to its results in productivity and competitiveness. The new factory is one of its three most modern factories in the world. The products manufactured there are free of phosphates, which shows its modern approach and care for the environment. The factory located in Colombia is the most efficient and ranks first (it has 8 in total) by its good performance in production processes and high international standards of manufacturing. In 2014, Mexichem opened the most modern and automated plant in Latin America to manufacture pipes made of polyester resin reinforced with fiberglass. Germany Netherlands & United Kingdom Germany Mexico A regional platform for manufacturing activities with high standards of productivity
  • 45.
    0 Source: DINERO Magazine,July 2014 Its factory in Colombia is one of the most productive and sustainable and is listed as one of the 'focus factories' for the group, which has operations in more than 130 countries. French company Saint Gobain set up in Colombia one of the most modern plants in the region to supply glass to the automotive industry market. The French cosmetic producer acquired the Colombian company Laboratorios Cósmeticos Vogue in 2013. With this acquisition the multinational has positioned its brand locally and regionally. The company begun operations in Colombia in 2008. UPL Colombia is the group's exporting platform in the Americas, exporting more than 95% of its production towards major markets like United States, Mexico, Brazil and Argentina. Switzerland France France India A regional platform for manufacturing activities with high standards of productivity
  • 46.
    Sectors of opportunity– Automotive Sales of vehicles in Colombia. Thousands of unitsIn 2014, Colombia set a new record in car sales with more than 328,000 units. 8 OEM´s (Original Equipment Manufacturer) have facilities in Colombia. 73% of cargo is transported by road. Colombia is the second largest producer of motorcycles in the region. The production of auto parts has doubled in last ten years. Assembly of passenger vehicles Some niche with opportunities Assembly of cargo vehicles Assembly of motorcycles Manufacture of auto parts 253,9 324,6 316,0 293,8 328,5 350,9 362,8 381,0 398,7 436,0 2010 2011 2012 2013 2014 2015e 2016e 2017e 2018e 2019e Source: ANDI and Business Monitor International Source: ANDI.
  • 47.
    0 The North American companyGeneral Motors, invested to create its own Industrial Free Trade Zone for stamping processes. Daimler, along with DANA, invested in a plant for the assembly of passenger vehicles. An estimated 3,000 unit per year will be assembled by 2015. The North American company Johnson Controls made an alliance with Baterías Mac for lead batteries production destined to the local market, Central, South America and The Caribbean. Foton recently invested in a new assembly facility for its SUV models. United States Germany United States China Sectors of opportunity – Automotive
  • 48.
    Source: MinTic andIDC Sectors of opportunity – Services IT, BPO, ITO, Shared Services, Apps Colombia is one the three major providers of IT services in the region. The broadband connections increased from 2.2 to 8.8 millions between 2010 and 2014 In the next 4 years, the broadband connections will be tripled reaching 27 million connections Available labor force of more than 1,200,000 professionals graduated in fields related to financial and value added shared service operations Some niche with oportunities Cloud computing Big data Software develpment Innovation and development centers Agregated shared services centres for diverse industries
  • 49.
    0 Source: DINERO Magazine,July 2014 In September of 2014 the assembly of IBM’s third Data Center in Colombia was made official, with a processing capacity of 5 petabytes, makes it one of the most advanced centers for Cloud Computing and Big Data Analytics in the country It has two operations centers in Bogota where it manages a diversified portfolio of blue ribbon clients, with the capacity for up to a thousand positions. In Colombia the operation currently has more than 1,400 active work positions in credit processes, customer service, and document management, attending and responding to clients in sectors that include banking, manufacturing, mining, mass consumption, among others The Operation of the Diageo Shared Services Center in Bogota serves 12 markets in the region and has about 110 positions. Software & IT Services United States BPO Spain BPO & IT Japan Shared Services United Kingdom Sectors of opportunity – Services IT, BPO, ITO, Shared Services, Apps
  • 50.
     Projects thatincrease availability of convention centers, exhibition centers and corporate hotels. Colombia ranks 25th in the ICCA ranking (International Congress and Convention Association) Sectors of opportunity Tourism infrastructure, real estate and retail  Increase availability of Hotel rooms in secondary cities.  Projects that develop adequate infrastructure and that take advantage of Colombia´s nature and wellness potential, reflected in the countries biodiversity and the quality of it´s health services.  Investment in luxury hospitality. Investment Opportunities in: Nature & Adventure Wellness City HotelsEntertainment Some niche with oportunities 2012 2013 2014 3.5 3,7 4,2 Inbound tourist* 2012 – 2014 (millions of people) * Inbound tourist includes: resident Colombians abroad, foreign non resident in Colombia, special cross borders, and cruise visitors. Source: Migration Colombia and MinCIT. ProColombia calculations.
  • 51.
    Sectors of opportunity Tourisminfrastructure, real estate and retail Source: DINERO Magazine, July 2014 This American chain opened its first hotel in Bogota's financial district (73rd Street), with approximately 240 rooms focusing on business tourism. Hilton operates in the Caribbean region of Colombia through the Hampton brand in Cartagena and Barranquilla. Holiday Inn hotels opened in Bogota and Cartagena, and combined provide 331 rooms. Also, there is a Holiday Inn Express in Bogota with 76 rooms, one in Cucuta with 98 rooms, and one in Bucaramanga with 170 rooms. Currently, there is an Intercontinental hotel under construction in Cartagena. The American company Marriott International operates in Bogota with a 239-room hotel located in the southern section of El Dorado Avenue, 15 minutes away from the international and domestic air terminals. Also, the prestigious 264-room JW Marriott hotel opened in Bogota’s financial district (72nd Street), and a 182-room Marriott hotel will soon open in Cali. Ibis Bogota is located in the International Center (one of Bogota’s business districts), close to the National Museum, 15 minutes from the Colonial Candelaria district and 45 minutes away from the airport. Medellin also has an Accor hotel brand which has added 216 rooms to the city. United States United Kingdom United States France
  • 52.
    Rubber Biofuels  Buildspecialized industrial facilities to transform natural rubber into value-added items.  Build biorefineries, biomass plants and / or development of transesterification intended to transform the palm oil into biodiesel.  Establish local partnerships and invest in biotechnology laboratories to develop quality seeds.  Build cocoa plants to process cocoa byproducts such as cocoa butter, cocoa liquor and chocolate products. Sectors of opportunity - Agribusiness Forestry Some niche with opportunities Investment Opportunities Aquaculture Cacao Cereals Fruits and vegetables Meat Processed food
  • 53.
    Source: DINERO Magazine,July 2014 Sectors of opportunity - Agribusiness 0 Dole, the North American multinational, began to operate a plant of salads and a distribution center of production in Colombia, projects in which the company had to invest around US$15 million. Smurfit Kappa is one of the leading providers of paper- based packaging solutions in the world, with around 43,000 employees in approximately 350 production sites across 33 countries and with revenue of €8.1 billion in 2014. Entered the country in 2007 as a result of a joint venture with the Colombian company Alquería, combining the international experience and the innovation capacity and development of Danone with the know how and knowledge of the local market of Alquería. Chile Ireland France
  • 54.
    Sectors of opportunity– Oil palm and rubber Agricultural GDP in Latin America 4th country in the world with higher oil palm production: 1.2 million tons (3.1% of the global demand). Colombia produces 20% of the South American rubber: 44,100 tonnes/year. High potential tire demand: between 2008 and 2013, sales in excess of 6.4 million tires were estimated and the figure could be higher. Oil and fat processed food Rubber auto parts Biofuels Some niche with opportunities 4% 4% 5% 6% 6% 6% 7% 9% 0% 2% 4% 6% 8% 10% Venezuela Mexico Brazil Ecuador Latam Peru Colombia Argentina Source: FAO, Ministry of Agriculture.
  • 55.
    0 Mitsubishi has become partnerwith Ecopetrol in the project Bioenergy (Ethanol Production, 2012). Likewise, Mitsubishi aqcuired a part of Colombian BioOriente (which is building the largest biodiesel plant of Colombia) A factory of radial tires for trucks and neumatic tires, among others, operates in Yumbo (Valle del Cauca). The first air-retreading plant for Latin America will begin operations in Colombia. Merhav produces more than 376,000 lt/daily in a 10,000 hectares plant of sugar cane located in Magdalena. Merhay contributes to generate around 1.000 direct jobs in Colombia. AAK has acquired the Fabrica Nacional de Grasas S.A. (FANAGRA), a Colombian company that specializes in vegetable oils and fats for the bakery segment. The company has 155 employees and an annual volume of production of 30,000 tonnes. Japan United States Israel Sweeden Sectors of opportunity – Oil palm and rubber
  • 56.
    No import duties.VAT exemption for goods sold from Colombia to FTZ. Benefit from international trade agreements. Allows sales to the local market. Free trade zones for different investor styles. REDUCED INCOME TAX AND SALES ALLOWED TO THE LOCAL MARKET Free Trade Zone (102) “Special Standing Uniempresarial” (FTZ) (62) Permanent Free Trade Zone (40)
  • 57.
    Investment cases incolombian free trade zones Source: DINERO Magazine, July 2014 Teleperformance Colombia has 11 campuses and approximately 10,000 employees in its offices in Bogota and Medellin. The company stands out for providing nearshore services in Colombia (United States) and Offshore (Spain). In 2015, opened a precision component factory in the country. It’s the first midsize Japanese company who decides to invest in Colombia. Through the construction of the largest assembly plant in Latin America, Hero MotoCorp serves the markets of Central and South America. Mexican Coca-Cola Femsa bottling plant in Tocancipá free trade zone is the starting point of FEMSA Industrial Park, the first cluster of soft drinks in the country. France Japan India Mexico
  • 58.
    Summing up, Colombia offers: Adynamic and stable and economy An agency, PROCOLOMBIA, ready to assist you in assessing investment opportunities A solid base of expanding Colombian companies to partner with to reach the local and regional markets Diverse Opportunities for investment in a wide variety of sectors A platform to reach third markets through a network of FTAs A very interesting and expanding market
  • 59.