Colombia is stepping out of the shadows and into the limelight for Georgia companies realizing opportunities in a land was once considered unsafe and simply not worth the trouble.
When Georgia officials opened what they call the first state trade office in the country earlier this year, they were responding to an increase in export inquiries. With the office open for 11 months now, they’ve proliferated even further. This year alone, the GDEcD team on the ground has served 90 Georgia companies and has contacted or introduced Georgia products or services to more than 1,300 Colombian firms.
After visiting Colombia in October to see its promise for ourselves, we caught up with Juan Carlos Lopez Gutierrez, Georgia’s Bogota-based managing director for Colombia and Mexico, to discuss why it’s now catching investors’ eyes, and how the office can help companies enter the market.
Global Atlanta: What has your activity been like since the Georgia office opened earlier this year? What are your day-to-day activities and how have you seen demand for your services increase?
Juan Carlos Lopez: We have been thrilled to see Georgia companies showing an increased interest in Colombia and the opportunities that a 45 million-person market with 4.7 percent GDP growth may bring to their businesses.
From January to November 2014, more than 90 companies have received support from the Georgia Department of Economic Development team. From identifying potential partners and clients in Colombia, to reviewing the opportunities for products in the market and facilitating trade missions in the country, the GDEcD team has been hard at work this year.
Our day-to-day activities include identifying and executing strategic meetings and spearheading conversations with authorities, influencers and business managers, promoting Georgia and Georgia companies in Colombia.
Global Atlanta: Colombia and the U.S. enacted a free trade agreement in 2012. How have Georgia firms been taking advantage of this, and where do you see the most potential for future trade?
Mr. Lopez: The United States-Colombia Trade Promotion Agreement entered into force on May 15, 2012. On the day of implementation, more than 80 percent of U.S. industrial goods exports to Colombia became duty-free, including agricultural and construction equipment, building products, aircraft and parts, fertilizers, information technology equipment, medical and scientific equipment and wood. Since then, several products have had proportional tariff reductions and will be duty-free by 2016.
An additional number of goods will have reduced tariff rates of 0 percent by the time the TPA is fully implemented by 2021. Most of Georgia’s products are already duty-free or are part of the 2016 duty-free plan, and now have duties as low as 3 percent.
For Colombian companies in many industries, products manufactured in the U.S. have a solid reputation for quality, service and reliability. In the past years, this has become critical for buyers in sectors where products from China and other origins do not measure up.
Among those sectors, we could also see information technology and military equipment offering great potential. These sectors, along with the automotive parts and accessories, construction equipment, transportation and infrastructure, packaging and food processing equipment and mining, are all industries that show significant improvements in Colombia.
Global Atlanta: You mentioned in February the fact that Colombia is embarking on a massive infrastructure spending plan that calls for expansion of the nation’s road networks, ports and airports. How can Georgia-based companies capitalize off this plan? Why do you think few American firms bid on the 4G projects so far?
I encourage Georgia companies to visit the National Infrastructure Agency in Colombia online, www.ani.gov.co, where they can find information about the infrastructure projects that have been planned and are still looking for public-private partnerships to develop and operated the required infrastructure.
The opportunities include construction of new road networks and maintenance of old ones, massive airport upgrades in big cities, port enhancements and new port construction in both the Atlantic and the Pacific. National railway systems are to be rebuilt and river navigation is to be improved. All these projects need financing, public works subcontracting, logistics, construction equipment, water treatment, water supply, electric power generation, pollution control equipment, air navigation and port security aids, railway construction, transportation equipment, security and defense items and services and mass-transit systems. Georgia companies have access to these opportunities through the Trade division.
I think one of the reasons few American firms bid on 4G projects in Colombia is because of Colombia’s history and the stereotypes it has created. Many companies are still afraid to take a look into this market and haven’t noticed the huge opportunities that are there.
Global Atlanta: Colombia is a very different country than a few decades ago. How do their stereotypes change when Georgians visit the country?
There is a saying now in Colombia about visitors that is: “The risk is you want to stay.”
This is what has happened to many foreigners who visit Colombia. They realize that the good people outnumber those who have contributed to the bad reputation we have had in the past.
People, culture, food, landscapes, and growing businesses are just part of the portfolio of alternatives that a Georgian will find when visiting Colombia.
Once you decide to come, your insecurity goes away and you will fall in love with places such as Bogota, Medellin and Cali where business opportunities, culture, modern cities and fun activities are found; Cartagena, with its history, beaches and colonial beauty, will fascinate you; and regions such as the Coffee Triangle, with a rich cultural heritage, will draw you in.
Global Atlanta: Much of Colombia’s economic growth comes from minerals and oil – how is the country diversifying away from these sources of growth, and what opportunities are there for service providers in the country?
Innovation has been one of the key milestones for the current Colombian government and private sector in Colombia to spur growth. Government agencies such as “Innpulsa Colombia” have been created to promote fast, profitable and sustainable business growth. Many other programs, both regional and national, have promoted local and foreign direct investment into sectors such as agriculture, IT, manufacturing, clothes, auto parts and tourism – sectors that encourage opportunities for additional market growth.
When you consider all the work required by Colombian companies and the government in order to achieve and keep up this growth, there are countless opportunities for service providers. Knowledge, technology, processes, best practices, education, experience and market understanding, are just some that need to be implemented in the country’s business culture, and this is where service companies will have the option to add value.
Global Atlanta: In the other direction, what are the advantages that Atlanta and Georgia have to offer from a Latin American perspective?
Atlanta and Georgia’s logistics infrastructure is one of the most important advantages right now. There are many Colombian companies looking to distribute their products beyond Miami and Florida and have started to look for solutions such as warehousing, transportation, ports, air cargo, etc.
From my perspective, from a commercial and logistics standpoint, when a cargo airplane or ship full of Colombian goods arrives in Georgia, we can and should think that the same airplane or ship will go back to Colombia packed full of goods from Georgia. These alternatives will increase trade opportunities between Colombia and Georgia.
Juan Carlos López Gutiérrez is managing director for Colombia & Mexico for the State of Georgia. He is based in Bogota.
Editor’s note: This interview has been edited for clarity and flow.