Procter & Gamble Invests $25 million USD in Colombian Distribution Center

Procter & Gamble, the world's biggest consumer-products manufacturer and maker of household brand names, such as Duracell, Pantene and Gillette, is betting on Colombia as a strategic location to help grow its market position in South America with a $25 million USD investment in a new distribution center in the region. The project, which will add 500 manufacturing jobs, is part of P&G’s vision to become the largest consumer goods company in Colombia by more than doubling its business in the country in the next few years.


P&G has been in Colombia for more than two decades and chose Rionegro, Antioquia, for the site of its new distribution facility based on a variety of factors, including proximity to the company’s existing production plant in Medellin, as well as the nearby location of a major highway that runs between Medellin and Bogota, allowing for direct access to the rest of the country. The nearly 500,000-square-foot center is scheduled to open in April 2011 and will accommodate the distribution of P&G staple products, as well as introduce new products to Colombia and nearby countries.

The company’s choice to grow its business in Antioquia extends beyond just strategic location. P&G is also heavily invested in the surrounding community, supporting programs that benefit the region’s citizens, including donating $750,000 USD to be put toward the construction of an aqueduct, giving away 350 computers to increase the quality of education in the area’s public schools, and assisting in building a toy library. It has also helped create a soccer field for local residents to use and has distributed large amounts of drinking water to the region through P&G’s PUR brand.

P&G’s facility was also designed with sustainability in mind. The company plans to install solar panels and energy efficient heaters in the coming months that will reduce its energy consumption by 28 percent each year, as well as fit the building with rainwater collection techniques and devices for treating wastewater, thus reducing sewage system output by more than 50 percent.

FORTUNE, Newsweek and The Huffington Post Report that Colombia is a Country to Watch

The eyes of the world are on Colombia, with its limited debt, growing incomes and young population. Foreign direct investment is flooding into the country. Analysts looking to capitalize on this boom are calling Colombia the “country to watch in the hemisphere” and “a bright star in the Latin American constellation.”

Below are just a few recent stories featuring Colombia’s economy -- ripe for foreign investment -- in the some of the top business outlets in the U.S.:

* In an August 2010 article called, “Snapshots of the Frontier,” FORTUNE says Colombia is among five countries that are “veritable powder kegs of economic growth.” The article says, “A new-found stability, combined with sweeping privatizations in the export sector and the existence of valuable natural resources…translated into GDP growth averaging over 5% per year between 2004 and 2009.” Click here (http://money.cnn.com/galleries/2010/fortune/1008/gallery.frontier_markets.fortune/2.html) to read the full article.

* Newsweek’s July 16, 2010, article headlined, “Colombia Becomes the New Star of the South,” reports that “…against all odds Colombia has become the country to watch in the hemisphere,” adding that the country is…“gaining kudos and clout. Prospering, democratic, and pro-Western – and with a new leader [newly elected President Juan Manuel Santos] known more for his achievements than for his aura – the most conflicted nation in the hemisphere is now coming into its own.” Click here (http://www.newsweek.com/2010/07/16/colombia-becomes-the-new-star-of-the-south.html) to read the full article.

* The Huffington Post featured a July 6, 2010, piece written by Colombia’s Minister of Commerce, Industry and Tourism Luis Guillermo Plata Paez, titled “Colombia’s New Economic Reality.” In it, Paez outlines 10 things that American investors might not know about Colombia’s economy and business atmosphere, including that the “country expects to see a record 10 billion in total foreign direct investment in 2010...” Click here (http://www.huffingtonpost.com/luis-guillermo-plata-paez/colombias-new-economic-re_b_636384.html) to read the full article.

* On July 2, 2010, a Newsweek article titled “Colombia Unleashes the Civets,” said, “…it’s no accident that Colombia gets lead billing [among the CIVETS countries]. In the past eight years, the Andean nation has gone from dud to dynamo: foreign investment has risen 250 percent. Its stock index is up 15 percent this year, and 35 percent (versus Brazil’s 14 percent) over the decade.” Click here (http://www.newsweek.com/2010/07/02/colombia-unleashes-the-civets.html) to read the full article.

McKinsey Quarterly Showcases Colombia’s BPO Sector as a Model for Emerging Countries

In a recent article in McKinsey Quarterly, McKinsey & Company’s business journal, the publication highlights Colombia’s success in helping its business process outsourcing (BPO) sector become more globally competitive in a case study titled, “Colombia’s lesson in economic development.” As part of the country’s Productive Transformation Program begun in 2007, Colombia aims to assist not only traditional commodity-based industries, but also value-added sectors, such as BPO.

For the BPO industry, the program promoted the formation of public-private partnerships, as well as government reforms and initiatives that will help the sector go head-to-head with other countries looking to service Spanish-speaking markets, such as Colombia’s domestic market, Spain, Hispanic consumers in the U.S. and multinational companies operating in Latin America.

After studying various countries with comparative opportunities and examples, McKinsey concluded that Colombia offered lower costs for business processing outsourcing than other Latin American countries and could thus “serve the U.S. Hispanic market and multinationals in the region competitively.” These analyses also revealed that BPO could potentially account for roughly 300,000 jobs in the country before 2020.

McKinsey says that initial results from the Productive Transformation Program for the BPO seem to show that system is working and could serve as a model for other emerging markets, thanks in part to some of the steps that have been taken in Colombia with regard to this sector. McKinsey Quarterly reports several examples, such as:

* Developing the country’s human resources: Colombia has worked with the BPO industry to create a national registry for certified speakers of the English language (www.ispeak.gov.co) to make it easier for companies to find qualified employees; and the city of Bogotá, in partnership with several companies, has created a program to finance English-language education for call center employees.

* Reforming Colombia’s taxes and regulation: In May 2010, the country eliminated the value-added tax on BPO service exporters, getting rid of a disincentive to create offshoring services in Colombia. The country is also expected to approve a new data protection bill that would align Colombian law with stricter European and U.S. data security requirements, making the country a more attractive BPO destination. Colombia also adopted International Financial Reporting Standards, an important step; because financial accounting is one of the processes developed countries are offshoring.

* Promoting the industry within the country: Colombian executives in the sector have established a local chapter of the International Association of Outsourcing Professionals—the first in Latin America—which will help managers stay connected to their peers abroad and keep up-to-date on global trends.

* Increasing BPO infrastructure: Local governments are developing two free-trade zones near Bogotá and Medellín, specializing in BPO. State-of-the-art infrastructure and services will be available to companies that settle there. In addition, the government has already granted free trade–zone status to three new BPO facilities, and three others are under consideration.

Colombia Real Estate gets its share of Investor’s Attention

Bogota, Colombia - August 30, 2010 -- International Real Estate Listings.com was keenly watching and analyzing the real estate in Colombia for the last two decades. With the internecine wars between cocaine smugglers and the government coming to an end and the growth rate of Colombia being quite impressive, International Real Estate Listings.com decided to launch a separate website to assist the Colombia property owners, real estate agents, and developers in selling, renting, or exchanging their properties in the Colombian and international real estate markets. It came as no surprise that the Colombia real estate stakeholders responded immediately in large numbers to utilize the golden opportunity provided by the new website. They have been opening accounts and posted multiple listings of properties to get local and international exposure for profitable deals without the hassle of middlemen.

The Republic of Colombia is situated in the northwestern region of South America. Colombia is the second largest country in South American after Brazil and the fourth largest in Latin America in economic terms. Bogota is the capital of the country and the official language is Spanish. Official data reveal that around 46% of the population has been estimated to live below poverty line, with about 17% classified as extremely poor. Still, the recent economic growth of Colombia has been quite impressive, with the rate rising to 8.2% in 2007. The growth rate has been among the highest in Latin American countries. The frequent wars between the government and the cocaine warlords have been discouraging tourists and foreign investors for several decades but the situation has changed at present. In 2006, Lonely Planet ranked Colombia among the top ten tourist destinations in the world. The ecotourism industry has been thriving enormously in recent times, providing indirect boost to the Colombian real estate market development and international real estate investment in Colombia.

The analysis of the Colombian real estate market was done by the veteran international real estate specialist, Mr. Taylor White, PHD, who has create, a global platform to bring together property holders, developers, agents, and international real estate investors together. His aim was to cut across the linguistic, economic, and cultural barriers between various countries and facilitate real estate transactions across borders. During our discussion with him, Mr. White stressed that the launch of the new website for Colombia was an important stride in his efforts to integrate the global real estate industry. He revealed the major features of the website in promoting Colombia real estate listings, Colombia real estate for sale, Colombia rentals, and enabling international property transactions and exchanges.

Can it Get Any Hotter in Colombia? Convergys Commits to Bogota

Nearshore Americas has learned that global contact center giant Convergys, which serves half of the Fortune 50, is setting up a BPO service center in Bogota after receiving clearance to operate in a new free trade zone in the northern part of Bogota.
As many as 2,500 seats will occupied at the center within three years, according to two reliable sources. The center, which should be operational in June, will also offer financial back-office support services.
Colombia is without question one of the hottest outsourcing destinations in Latin America, and its transformation has been one of the biggest stories to hit the headlines in the Nearshore community in the last several months.
Convergys spokesperson John Pratt declined to comment late today on our report.
“This does not come as a surprise, really,” says lead BPO and call center analyst Peter Ryan, of DataMonitor, commenting on the development. “There is a lot of capacity in Colombia and the country has the potential to become the next big thing in South America,” said Ryan, comparing its rise to Chile and Argentina, which have become globally recognized outsourcing centers.
Pace of Growth: A Critical Question
Another major global BPO player to jump into the Colombian market is Teleperformance, which recently acquired Teledatos, which generated about $75 million in 2009. Teledatos operates six delivery centers in Bogotá and Medellín, employing over 5,000 workers.
The big question facing Colombia over the near term is whether BPO growth will come as a deluge or grow incrementally. If there is a huge spike in demand for call center services, for example, Ryan says this could trigger inflationary wages pressures. “It would be better if the growth is spread over the next 24 months,” he says.
The other question confronting the growing Colombia BPO sector is whether cities such as Medellin and Cartegna will be able to produce sufficient quantities of bi-lingual workers, says Ryan.
Convergys Retrofits
Convergys recently downsized in Canada, cutting over 800 workers, and shuttling those positions reportedly to the Philippines. The Cincinnati-based company says it expects to hire at least six thousand employees this year in the Philippines. The company employs over 20,000 workers in 12 sites in the Philippines.
Finally, Convergys also landed recently in Gartner’s Magic Quandrant, recognized for its service delivery in the CRM/Contact Center space.
“We believe that Convergys’ position in the Leaders quadrant for CRM Contact Center BPO providers is a positive validation of our leadership, execution abilities, and investments in our customer solutions portfolio. Our solutions, which include agent-assisted care, automation, self-service, and analytic services, enable our clients to stand ahead of their competitors based on the quality and consistency of the customer experiences we help them provide, and the customer intelligence we bring to them.” said Andrea Ayers, President, Customer Management, Convergys.

Source: Newsweek by KIRK LAUGHLIN.
http://bx.businessweek.com/global-outsourcing/view?url=http%3A%2F%2Fwww.nearshoreamericas.com%2Fexclusive-hotter-in-colombia-convergys-commits-to-bogota%2F2412%2F

JW Marriot opens luxury hotel in Bogota

As Colombia prepares for the inauguration of a new President and the Uribe Era comes to and end, major hotel brands continue to arrive to the country. This week JW Marriot opened for the first time in Bogota, Colombia.
Improved security, the dynamic economy and tax breaks for the industry are attracting the major international hotel chains that for decades shied away from Colombia. investors for the first time believe that Colombia is the place to be and the proof is on the creation of around 4500 new hotels rooms just in 2010. Hotel Brands like Hilton, Sonesta, Intercontinental, Marriot, Hyatt, Holiday Inn and many others currently have projects in cities like Medellin, Cartagena and Bogota.

The last eight years under the Government of President Uribe the amount of tourist that visit Colombia increased by 500%, just in 2009 along Colombia grew 17% in the amount of foreign visitors, making it the only country in Latin America that showed grow in this area during a global recession.

The dynamism of Colombia's economy, fueled by the boom in natural resources including coal, petroleum and coffee, is luring more business travelers. A special 20-year income tax exemption for new hotels that Colombia approved to counter the effect of the global financial crisis has been an important incentive.

To learn more about Colombia visit www.colombia.travel or www.investincolombia.com

Colombia’s lesson in economic development

A faster pace of economic development calls for microlevel reforms to help specific sectors and companies become more competitive in global markets.

Many developing countries are frustrated because better macroeconomic conditions haven’t led to faster economic growth. Clearly, earning an investment-grade rating on sovereign debt isn’t enough. Our work in Colombia creating and implementing an economic-development program, with a model focused on improving specific industry sectors, could provide useful lessons for a number of developing countries.
Colombia has enjoyed a surprising political and economic turnaround over the past decade. Nonetheless, many economists assert that the improvements in the business environment are necessary but not sufficient to ensure sustainable economic development. The country’s government concluded that to achieve enduring success, it would have to focus on making specific business sectors more competitive. Its Productive Transformation Program,1 launched in 2007, created a novel public–private partnership engaging eight industry sectors. Early results suggest that tighter collaboration has not only removed investment barriers but also built competitive advantages.

From:
JULY 2010 • Luis Andrade and Andres Cadena
McKinsey Quarterly, the business journal of McKinsey & Company.