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Success sees Santander Free Trade Zone make growing plans

Success sees Santander Free Trade Zone make growing plans

Enero 17, 2018

fDi Magazine, Jason Mitchell:  Colombia’s Santander Free Zone is benefiting from its excellent logistics and good supply of graduates, while its ability to attract international initiatives in life sciences and medical services also means it is outpacing the national performance.

Santander Free Zone, located close to Bucaramanga city in the central-northern part of Colombia, would like to double the number of companies it hosts from 51 to more than 100 in the next five years. 
The free-trade zone – whose main buildings were constructed in 2013 – is situated just a 20-minute drive from the city’s international airport. This has connections to the capital of neighbouring Panama, and plans to introduce regular flights to Fort Lauderdale in Florida soon (there are also 590 flights a week to other cities in Colombia).
Bucaramanga – with a metropolitan area of 1.2 million people – is the biggest city in Santander, one of the 32 states (known as departments) that make up Colombia. The department, which has a total population of 2.3 million people, is located in the Colombian Andes, close to the border with Venezuela. That country’s severe economic crisis has prompted many people from there to flee to Santander.
 
A self-contained department
 
“A lot of Venezuelans have moved to Santander,” says César Andrés Hernández, the general manager of Invest in Santander, the state’s inward development agency. “Some of them work in the informal sector but many have set up their own businesses and are helping the department’s economy to grow.”
In fact, in total more than 16,000 new companies are established every year in the state, according to official figures. At 7%, it has one of the lowest unemployment rates in Colombia. About 15 million people from northern and central Colombia – not just Santander department – view Bucaramanga as the main big city closest to them. The city has a total of 17 universities and higher education institutions, with more than 120,000 students.
“One of the biggest advantages of our free-trade zone is the pool of talented people who live close by,” says Nívea Santarelli Franco, the general manager of Santander Free Zone. “There are many qualified postgraduates, for example. Recently, Cecropia Solutions, a software company from Costa Rica, established itself in the zone and we were able to help it recruit suitable staff.
“It used to be said that people had to leave the department to further their careers. But nowadays they do not have to do so. We are creating opportunities in the free-trade zone and they are able to stay in the state.”

Bucking the national trend
 
Colombia’s central bank expects the country's economy to grow by a meagre 1.8% in 2017, following an expansion of 2% in 2016. However, Santander Free Zone continues to expand at a healthy pace. In 2016, the size of its occupied space rose by 6% to 54,500 square metres and its total SMEs and large companies rose by six to 50. The zone now employs about 1500 people and that is expected to rise to 2500 within five years. 
Santander department makes up a 7.7% share of the national economy, up from 5.7% at the start of the century, while it contributes 15% of all the taxes collected in the country. Average annual income is 33m pesos ($11,400), the second highest in Colombia after Casanare department (which has an important oil and gas industry). It is also higher than Bogotá’s 18m pesos, and Antioquia’s 17m pesos. Medellín, Colombia’s second city, is located in Antioquia. 
Agriculture, farming, services, commerce and banking are important business sectors in Santander but manufacturing and construction have been the strongest motors of economic growth during the past few years. 
The department expects its tourism industry to start to expand rapidly too. Barichara, an attractive colonial town, is located there, while San Gil, another town in the Andes, has become Colombia’s main centre for adventure tourism. 
 
 
Medical tourism hopes
 
Santander has also become one of the country’s most important centres for medical tourism because of the high quality of its hospitals and clinics, especially the Fundación Cardiovascular (FCV) – one of Colombia’s best cardiac centres – and Foscal Internacional.
In 2015, FCV teamed up with the University of Pittsburgh Medical Center to develop the first private oncology centre in Colombia at Piedecuesta, a city that forms part of the Bucaramanga metropolitan zone. The initial stage involves an investment of $200m, which is backed by the International Finance Corporation, part of the World Bank. The centre will have a total capacity of 1192 beds.
Foscal Internacional is a 187,000-square-metre international medical centre being created through a strategic alliance between the Fundación Oftalmológica de Santander, a private clinic, and the Universidad Autónoma de Bucaramanga, a private university. 
“Life sciences is now one of the most important clusters at the free-trade zone,” says Ms Santarelli Franco. “It includes pharmaceutical companies and medical laboratories.” For example, Unidrogas, a retail distributor of pharamaceutical, hygiene and beauty products, has started to construct a 5100-square-metre warehouse in the free-trade zone. 
 
Three main sectors
Santander Free Zone has three main strategic business axes: logistics and distribution; high-value-added manufacturing; and global services (knowledge process outsourcing, BPO and IT outsourcing). Energy and agribusiness are also important sub-sectors. Bucaramanga is located close to one of Colombia’s main oil and gas centres and traditionally the department has been a major centre for cattle raising, poultry farming and farming generally. 
Major companies located in the park include Surtitex, a material fabrics importer; E-Dina Zona Franca, a natural sciences and engineering company; Mantilla Marketing, an online advertising company; Construcciones Y Soluciones Modulares, an advanced engineering company that provides solutions in architecture and modular construction; and Financiera Comultrasan, a financial institution.
The zone is also home to Zenith Tower, a four-storey office centre with lower level parking space, suitable for large companies that require high-quality office space. Its tax incentives include a 20% income tax rate, zero VAT and customs duties on primary material imports and inputs, and no VAT on goods and imports purchased within Colombia. 
“Santander has one of the highest qualities of life in Colombia,” says Ms Santarelli Franco. “The climate is very pleasant, averaging around 22 degrees year-round, and the education system is of a high standard.”
 

 

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