BIGGER & BETTER

Colombia 2013 | ECONOMY | INTERVIEW

TBY talks to Felipe Arroyo Douat, General Manager of Zona Franca La Cayena, on the advantageous location of the country's free trade zones and the significance of Barranquilla as a trading hub.

Felipe Arroyo Douat
BIOGRAPHY
Felipe Arroyo Douat received a Master’s degree in Commercial Planning and Marketing from the University of Barcelona in 2007. He completed his Bachelor’s degree in Industrial Design at Javierana University in 2000. Prior to becoming General Manager of Zona Franca La Cayena, he worked as Director of Logistics and Maintenance at Industria Santa Clara during 2000-2001. He then went on to become Industrial Projects Assistant at Alfagres. He has also been Production Manager at Alfagres since 2001.

There are currently 113 free trade zones (FTZs) in Colombia. What has incentivized this rapid increase?

FTZs offer great benefits such as reduced taxes and logistical advantages. The first FTZs started in the main urban areas in the center of the country, in Bogotá, Cali, and Medellín. Now, there are more FTZs along the coast near the major ports, which reduces export and logistics costs dramatically. In the FTZs along the Pacific coast of Colombia, the major export market is Asia, obviously, whereas those along the Atlantic coast are mainly involved in trade with the EU and the US. That is why most FTZs are now based in or around Barranquilla, Santa Marta, and Cartagena. Most FTZs are along the Atlantic coast, especially the biggest.

La Cayena FTZ is mainly used by construction materials companies. What advantages does La Cayena offer?

It is meant to attract large industrial companies. There are only 40 or so lots in 1.5 million sqm, so it is designed for large industries. All public services are geared to this. Our slogan is “From industrials for industrials;" it is not geared so much to commercial companies. The workforce around Barranquilla is very good. La Cayena's infrastructure is very different from other FTZs. It is very modern, and it is built with the best materials, which reduces monthly maintenance costs. Logistics costs are also minimal as it is right by the port. Also, we buy energy in packages, both electricity and gas, which further reduces power costs in La Cayena FTZ. We buy gas directly from the producers. Our overall costs are quite low compared to other FTZs, and that is what differentiates us from the others.

What advantages do FTZs provide for the overall Colombian economy and also for Barranquilla in particular?

One advantage is that FTZs expand the production base of the economy. Instead of becoming highly centralized in the large cities, the industrial base moves to these coastal areas and cities, drawing labor, industry, and capital out to new regions. It thereby contributes to the spread of jobs and wealth in the country and also creates a skilled workforce, while also providing social and economic benefits to local areas where the FTZs are located. Industries and companies also benefit from cheaper labor and material costs in places like Barranquilla compared to Medellín, Cali, or Bogotá. It has social, demographic, and economic benefits for the country, both for the people and for businesses. Barranquilla in particular is a great base for various businesses, geographically speaking. You can export goods to Central America, Texas, or Florida within two days. Brazilian and various Asian companies also like to relocate to Colombia for this reason, and also to take advantage of exporting without being subject to taxes, thanks to Colombia's Free Trade Agreement (FTA) with the US.

How many companies are currently located in La Cayena?

We have 16 companies from Colombia and abroad, mainly from Venezuela, Spain, and Mexico. We are currently at 50% capacity. One Spanish construction company produces goods here using local raw materials and then exports them to Romania, for example. We are also open to other types of companies besides just the large construction firms, but generally each FTZ focuses on a specific industry and specific export market, so the other firms would also be more or less construction industry oriented, because they are the ones that would most benefit from being in this La Cayena.

What is your vision for the future of FTZs in Colombia, and for La Cayena in particular?

We need to increase the area of FTZs in Colombia in general, and La Cayena in particular, because there is more demand than supply. We need to expand. In a normal week, we have from six to 12 companies interested in locating here. We should expand to 2 million sqm, and maybe even more.