Opportunities in Colombia

The flag of Colombia.

The flag of Colombia. (Photo credit: Wikipedia)

COLOMBIA

Investment Opportunities in

Forestry

With 17 million suitable hectares for reforestation, scattered over different altitude levels, diversity of tree species, and important developments in the fields of genetics and biotechnology, optimal climatic conditions and tax benefits and incentives, Colombia is perfectly positioned as a destination for forestry investments.

  • Currently only 2.13% is used for 369,440 hectares forest plantations.
  • Technological packages for cultivation of several species of which pine and eucalyptus are for pulp production, sawmilling industries, construction, activated charcoal and boards. Teak, walnut, coffee and Acacia and mangium are used for saw timber and Melina for plywood.
  • Colombia’s year round photosynthesis due to its tropical location with high biomass production, produces higher yields for tree species and shorter life cycles.
  • Important biotechnology and genetic development has consolidated a higher quality forestry germplasm production with regards to plant material production.
  • Tax benefits and incentives including an exemption in income tax for new forest plantations and the Forest Incentive Certificate (CIF)

Manufacturing

Cosmetic and Toiletries

Cosmetics and cleaning products is one of the 12 priority sectors of government and private sector in Colombia. Due to the Program of Productive Transformation [1] the Government and private sector are working together to achieve and ensure that by 2032 Colombia is recognized as world leader in the production and exportation of cosmetics, cleaning products for the home and absorbents of high quality made from natural ingredients. Currently the country offers an opportunity for businesses in the sector interested in installing centers for research and development, and centers for logistics and production.

  • Colombia is the second country in the world in flower diversity, with more than 50.000 known species, of which 36% are endemic, meaning that they can be only found in Colombia.
  • With the project to create the Observatorio Nacional de la Biodiversidad Colombiana there will be an emphasis on sourcing all natural ingredients.
  • Protection of industrial property is fixed to international standards, granting an exclusivity of 20 years to the  patent holders.
  • A proposal for the Commercial Development of Biotechnology from the sustainable use of biodiversity was approved in June, 2011 allowing the creation of the economic, institutional and legal conditions to attract public and private resources for entrepreneurs in biotechnology.
  • Fifth market in Latin America with sales in 2010 of US$ 6.235 million.
  • With a compound annual growth of 8,7% between 2006-2014, Colombia will remain one of the growth drivers in the Latin-American market.
  • The Colombian production of cosmetics and cleaning products has doubled in the last 6 years from USD $1.588 million to US$ to US$ 2.730 million in 2010 (prices Ex–factory).
  • The exportation of cosmetics and cleaning products increased six times in the last ten years from US$ 114 million to US$ 683 million.

Building Materials

Dynamism of construction in Colombia which has increased more 100% in the GDP over the last 9 years and a growth of 29% in foreign investment over the last 6 years, turning it into the principal driver of materials for construction. In 2010 civil works grew 39%, buildings 29% in approved licenses and the hotel industry in 148%. (Source: DANE, Camacol). Positive behavior with growth consisted of exports of 16% and ian ncrease of 78% in investments. (Source: DANE).

  • Between January and June of 2011, the sales of housing grew 18% compared to the previous years, with 26% in non welfare housing and 9% in welfare housing, reaching a total of 56.859 units sold. (Source: Camacol, Portafolio 25 of July)
  • In the government’s development plan , by 2014 there are five driving elements, with an emphasis on Housing (goal of constructing 1 million Social Interest Housing), Infrastructure (Construction and remodeling of airports, ports, roads, etc.), which will generate an increase in demand for low, medium and high cost materials. (Source: Ministerio de Hacienda and crédito público).
  • The availability of qualified graduates numbering more than 119.000 technical professionals in the sector, 28 programs specialized in materials for construction. (Source: Ministerio de educación de Colombia).

Automotive

Colombia is the fourth producer of vehicles in Latin America, and the industry provides assembly, and manufacturing of parts and pieces used for OEM and secondary market purposes. The sector continues to experience a substantial growth, which exceeded 37% in 2010.

  • Assembly: Unification of the massive transport systems in the principal cities (Bogotá, Barranquilla, Bucaramanga, Cartagena, Cali, Pereira, amongst others), which will mean an increase in the purchase of new vehicles and a standardization of models, Bogotá alone needs 5.000 units in the next few years.
  • Heavy Duty Commercial Vehicles – Trucks: With the mining and petroleum industry’s growth in the country, in addition to further projects in infrastructure and the exploitation of biofuels there is a great demand for trucks to haul the loads which amount to approximately 2.730 units. According to the Asociación Nacional de Empresas Transportadoras de Carga –Asocarga, 2.300 fuel trucks will be needed to transport crude oil and a further 430 for the transportation of palm oil.
    Additionally, nearly 75% of all surface mail is sent by road in Colombia and therefore requires consistent updating of the fleets.

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