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> Antioquia, Colombia
TRADE AND INVESTMENT > Made in Antioquia
Writer: Helen Jones   |  September 16, 2011

Antioquia is one of Colombia’s most productive regions. Agriculture, mining and textile production make the region a leading exporter, but new challenges to competitiveness are constantly arising, not least the need for better working conditions, sustainability and added value services.

TRADE AND INVESTMENT > Made in Antioquia

 

MadeIn Flowers Flowers

It’s no surprise that among Medellin’s main tourist attractions is its annual flower festival, which honours Antioquia’s heritage as one of Colombia’s main flower producing regions. From roses to carnations, cut flowers are definitely one of Antioquia’s major export areas.

After Holland, Colombia is the world’s second largest exporter of flowers. While the US market is the dominant destination, with Colombian flowers accounting for an estimated 60-70% of those sold in the US, the European Union also receives a significant share of Colombian flowers, with exports valued at £78.8 million in 2010, according to the Colombian association of flower exporters, Ascolflores. Antioquia’s contribution to this leading national industry is considerable, thanks to the work of companies such as chrysanthemum-exporter Capiro, and flower growing is the main industry in many towns in the west of the region. After the Bogota Savannah, Antioquia is the country’s second largest flower producing region, accounting for 19% of growing area.

MadeIn Bananas Bananas

When you next buy bananas, take a look and see where they come from. While the label may say simply Colombia, the fruit may well be from Antioquia, given that the region is a Colombian leader in the export of bananas.

According to Augura, the association of Colombian banana companies, 95% of bananas from Uraba in western Antioquia are exported to the European Union and the United States. And bearing in mind that Colombia is the world’s second largest exporter of the fruit, it’s quite possible you will have eaten a banana from Antioquia at some time. Furthermore, considering the special relationship Antioquian companies like Banafrut have with the British market, the presence of Colombian bananas is no surprise. This company in particular exports its bananas, grown on 3,100 hectares of land in Uraba, to large supermarket chains in the UK. But exporting to the UK is not an easy task, as fair trade requirements from retailers such as Sainsbury’s and Marks & Spencer mean strict standards must be complied with, not only in terms of how the fruit is grown, the techniques used and its quality, but also workers’ conditions and how the company is run. “In Colombia, 95% of banana workers are members of a trade union and we have an excellent relationship with the union,” says Nicolás Echavarría, managing director of Banafrut. While neighbouring countries have little union representation for workers, says Echavarría, Banafrut's situation "helps us show our demands in terms of social and labour relations to Europeans, making us more competitive." After contributing to major economic development in the last ten years in Antioquia and especially in Uraba, infrastructure demands are now becoming more urgent for the sector, as businesses not only look to fill ships leaving port, but also supply their high quality fruit inland to Colombia’s larger cities.

MadeIn Coffee Coffee

Of all the products exported from Colombia, coffee is possibly the most popular. Introduced into the country in the 18th century, the favorable land conditions create a smooth, world renowned coffee. Antioquia is one of Colombia’s traditional coffee farming regions.

Much of the region’s early railway infrastructure was built to support the sector and nowadays coffee from Antioquia accounts for almost 10% of exports, making it Colombia’s leading region in terms of shipping coffee abroad. Almost 100,000 families live from coffee farming in Antioquia, but while it harvests the greatest amount of coffee of all the Colombian regions, output levels cannot be guaranteed. For example, challenging weather conditions in 2011 may lead to a drop in the amount of sacks produced when harvesting begins this month (September). Meanwhile, sector developments include the production of specialty coffee in Antioquia in order to emulate the success of the competing Quindio region.

MadeIn Gold

Gold

While the current mining boom is focusing on coal and limestone discoveries in western Antioquia, gold, the metal on which the region was founded, remains a staple.

Today, gold accounts for 40% of exports. Mineros S.A. is Colombia’s largest gold mining operator in Colombia and is committed to bringing quality to the industry. “We have made the strategic decision to undertake socially and environmentally responsible mining,” says Beatriz Uribe, the company’s chairwoman. With rising gold prices, Mineros S.A. has increased its revenues by more than 50% in the first half of 2011. However, while business is booming, Antioquia is also facing the challenge of increased illegal mining, posing problems not only to companies like Mineros, but more importantly to the safety of workers, as shown by an accident in August 2011 that killed 3 people in Antioquia.

MadeIn Textiles

Textiles

Approximately 40% of Colombia’s textile factories are based in Medellin and the city is home to international trade fairs that attract buyers from all over the world.

Medellin has been a textile industry powerhouse since the beginning of the 20th century, with some of the country’s biggest textile companies, Coltejer and Fabricato, both founded in Antioquia in 1907 and 1920 respectively. According to Inexmoda, the textile/apparel industry in Antioquia generates around 170,000 jobs and exports of textiles and apparel from Antioquia account for 50% of the national total. However, most companies are microenterprises, rather than larger corporations. The Colombian textile industry is being actively promoted by the national government to become a world class sector by 2032, with added value areas such as fashion (which currently accounts for 5% of total exports in Colombia), high-quality apparel and technological innovation as key strategic elements.


RIONEGRO FREE TRADE ZONE

zonafrancaAn income tax rate of 15% - less than half that generally in Colombia - and no VAT or Import Duty on capital goods is a big attraction for investors.

At Rionegro Free Trade Zone, these conditions are available just a short distance from Medellin. Establishing a free trade zone “is a project that takes time and for which you need to bring together different elements,” says Carlos Mesa, managing director of the Rionegro Free Zone, just some 20 miles to the south-east of Medellin and a few minutes away from the regional capital’s main airport.

“It’s not just about attracting the company, but also about being able to provide a space and for that you need the investor who will build you the space.” The country’s free zones were privatised from state ownership in 1991 and Rionegro Free Zone was established in 1993. Thanks to the support of major companies like Suramericana de Seguros and Coltejer, and the backing of favourable policies from the national government from 2003, this free trade zone now has 120,000 metres of undercover space and is home to 80 companies. A recent development is the San Vicente de Paul Hospital Rionegro, a modern facility classed as a permanent special free trade zone, enjoying the benefits of importing equipment VAT- and duty-free.


 

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