How is the Free Zone Tayrona (FZT) contributing to national development?
One of the most important functions of an FTZ is its catalyzing effect on the development of a country. These zones play a role in generating employment, improving industry, and bringing investors to the country. Our advantage is the ability to produce new products that can compete on the international level, which in turn develops Colombia in broader terms. We intend to take greater advantage of related free trade agreements, and of our geographical position. In May 2008, the process started with the adequacy of lots and enclosures, and was finished in 2010. In 2011 we began operations and began to seek out clients. The FZT invested around $11.5 million in roads, public services, and amenities for clients, such as industrial and commercial services to help them settle.
How credible an alternative is Tayrona Steel Pipe, which has made a huge investment here, to more conventional US investments?
Tayrona Steel Pipe is an excellent investment opportunity because it has plants here and is able to leverage its access to Santa Marta and Colombia. Meanwhile, the company is based in Houston, giving it access to an international market of international clients, while this location is better suited to accessing the overall international market. The plant is located just 12 kilometers from the ports, enabling it to also service the US market from the home-base location. The climate in Santa Marta is also much more conducive to companies that need to operate in all weather conditions. Even compared to the other FTZs in the Caribbean and Central America, the climate here is unique, and the wind comes from the Sierra Nevada, which means that there is less corrosion. This is because of the lower salinity in the air, which is why there is such high demand for the services of metal mechanics, industry, alimentation, and logistics. Knight was our first major industrial player here. Its export/domestic operational ration was 60%. This trend has repeated itself in other production as the company imports 100% of its primary materials.
That is a high export ratio. Are you focusing on bringing in companies with a high export ratio to the Santa Marta Free zone?
The companies we are keen on should primarily be oriented toward exporting, although we do want a significant presence in national distribution, so as not to neglect Colombia. Ultimately, the role of these FTZs is to generate national growth and development. We are in the process of encouraging national companies based in Bogotá and central Colombia to relocate to the coast. We are noticing with the relocation of the industries that currently are centrally located that they are migrating here because of the climate. For example, Knight, and another European company that we are currently in negotiations with is contemplating an investment of €80 million for a special project, which would involve relocation to Colombia. We have other clients that are hoping to relocate from other countries, such as Venezuela, Italy, and the US, to dedicated 20-30% of production to the domestic market, with the remainder given over to export. We have a Spanish company that is undertaking the development of the logistics cluster.
Logistics is your most significant cluster. How has it attracted companies?
This is a perfect example of how clients are specifically drawn to the FTZ on the merits of its logistics cluster. Many companies have decided to relocate based on two criteria; firstly Santa Marta was a good location in terms of equipment durability, and secondly the FTZ's proximity to the port. This cuts out a significant logistics headache for producers. A good example of this is Auto Germana, a company that distributes BMW and Audi in Bogotá. Auto Germana made an investment in Tayrona and relocated its distribution center to the FTZ in Tayrona. It obtained the related benefits, and at the same time forged links with various dealerships around the country that require clients. VG is an important brand in Spain and Europe, and currently it is consolidating vehicles that are imported from Europe in the FZT. It is using the zone to offer special services, and is managing various brands from its Colombian base.
© The Business Year - February 2015