TBY talks to Luz María Correa Vargas, Corporate President of El Condor, on market opportunities, current projects, and the challenges in the infrastructure sector.

Luz María Correa Vargas
Luz María Correa Vargas studied Business Administrator and Finance Specialist at Universidad EAFIT and later went on to study Leadership at Harvard Business School. Since 2002, she has served as Chairman of the Corporate Organization. Since 1986, she has held the positions of Administrative and Financial Manager, and General Manager before finally becoming Corporate President at El Condor. She participated on the Board and Councils of Consortia Builders.

How would you assess the development of the infrastructure sector in Colombia, and what role do public-private partnerships (PPPs) play in that context?

Colombia has huge challenges ahead, especially regarding the infrastructure sector. For that reason, the country has ambitious investment plans to boost the development of infrastructure projects in the mining, road, energy, and logistics segments. Colombia plans to invest Ps99 billion over the next 10 years, and transportation infrastructure projects comprise around 60%-65% of that investment. I believe that many of these infrastructure projects will contribute by reducing transportation costs in the country, making the logistics sector (and the country overall) more competitive at the international level.

How has El Condor evolved over the years, and what sectors are you most active in?

El Condor was born as a construction company based in the Department of Antioquia. We began by developing construction projects in the region, and little by little we went national. In order to better compete with foreign companies in Colombia, we, along with a number of other relevant players in the infrastructure industry, set up a holding. This step enabled us to develop an investment portfolio in the infrastructure industry, alongside our construction business line. Construction work is very much linked to political and economic cycles, and our current investment portfolio makes us less dependent on the construction business line. At the same time, these investment projects provide us with enough cash flow to grow our construction activity. Overall, our construction company is totally consolidated today; we develop all types of infrastructure projects at the national level, and in terms of investments, we have mining, airports, and road concessions, as well as interests in other construction companies.

How relevant is the Transversal de las Americas project for the country?

It is a project of around Ps1.5 billion that covers over 700 kilometers, spread across almost the entire country. The project aims to provide infrastructure solutions to areas with high levels of traffic and road activity, contributing to their economic and social development. These areas are very rich in terms of natural resources, but lack the tools to extract them out of these regions. Although a number of legal and bureaucratic issues slowed down its development, the project will finally take off in 2013. We own a 33% stake in the consortium behind the project, and Transversal de las Americas represents the most important project in terms of business activity for us.

What results did the IPO in 2012 yield for the company?

The company needed to strengthen its financial side because of the fast pace of growth it experienced over the last few years. At the same time, we foresaw the need for the country to have a reliable and economically strong company for the development of infrastructure projects. The stock market offered many opportunities for us, especially in the context of giving continuity to the growth of the company, which was ready to take the next step in terms of its own development. The IPO was envisaged as the next natural step to consolidate our activities in more significant projects. The IPO was extremely successful, as we attracted international investors, Colombian pension funds, individuals, and corporations. The bid-to-cover ratio was 2.15 times; therefore, we increased the initial stake offer (Ps150.00 million) up to Ps162.58 million. The company plans to use the funds raised from the IPO to finance its growth plan for the coming years.

What are some of the greatest challenges facing the infrastructure industry in Colombia?

I believe that national companies need to consolidate their activities because there are many companies operating in the market right now. The current boom will contribute to the consolidation of some of them, whereas others will continue with a small part of the cake. Overall, the current level of infrastructure development in the country will contribute to make the industrial and enterprise network within the infrastructure industry much stronger. In the near future, I see many Colombian companies going abroad. Companies need to be ready to access financial tools to take on infrastructure projects.