This show is a co-production between the El Tesoro Theater and the Colombo Americano of Medellín.

Founded in 2012, The Jeremy Winston Chorale has left an indelible mark on the music community. The choir’s inaugural performance was at the world’s largest choir competition: “Cincinnati International Choir Competition in Ohio. Competing against choirs of international stature from different parts of the world, they were decorated with the gold medal for the best Gospel group, and silver medals in the categories of Mixed Choirs (Classical Music) and Spiritual.

Since winning the international competition, the choir has had high-profile performances, including a performance for Former President Barack Obama and First Lady Michelle Obama at the White House in December 2012 and then a second performance in 2015. They have also been invited to perform with the Czech National Symphony in their Prague Proms concert series during the summer in several years, including June 2025.

Buy your tickets at tuboleta.com or the box office of the Theater, El Tesoro Parque Comercial, Plaza Teatro, level 3 (above H&M).

Photo: El Tesoro Theater.

Correa was arrested on April 19, 2024, at Miami International Airport as he was preparing to board a flight to Medellín. Nine cell phones were found in his luggage, containing 58 videos and more than 100 photographs of child abuse, as well as explicit conversations with local pimps in which he expressed interest in “virgins.” A search of one of the cell phones also revealed a text message exchange with a sex trafficker in Colombia, who Correa agreed to pay $300,000 Colombian pesos (the equivalent of $75 USD) to arrange for commercial sex with children who were 10 to 12 years old.

The evidence was gathered through an investigation led by the Transnational Homeland Security Investigations Group (TCIU – SIJIN DIPRO), the Attorney General’s Office, HSI, and with support from the Mayor’s Office of Medellín through Operation Hunter.

“This sexual predator will face a long prison sentence in his country for crimes committed in Medellín. The sentence is the result of Operation Hunter, an example of what can be achieved with intelligence, international cooperation, and, above all, the determination to combat this crime. This is a historic result, the product of a parallel investigation conducted in both Miami and our city. The capture and conviction of both ends of a criminal network, the sexual offender and the pimp were achieved in both countries. We will not allow Medellín to be seen as a destination for sexual crime,” stated Mayor Federico Gutiérrez.

“Predators such as Correa are a scourge upon humanity, and must be dealt with accordingly.” – US Attorney Hayden P. O’Byrne

The investigation also led to the identification of six direct victims in Medellín, who provided valuable testimony during forensic interviews conducted by HSI in Colombia. The minors recounted how Correa, who called himself.
“Cris” offered them money, lodging, clothing, and electronic devices in exchange for sexual acts. Two women who were part of his network, Lina Marcela Velázquez Maldonado and María Camila Cuervo, were also arrested and convicted of pimping and sexual abuse of a child under 14 years of age.

“This conviction is just one step. We are making progress in criminal proceedings against Correa’s accomplices and will continue collaborating to capture all those involved. Our commitment is absolute: to protect our children. Many more arrests are coming, and the investigation continues,” the president stated.

Stefan Correa will be imprisoned in a United States prison. Meanwhile, in Colombia, a mirror investigation is progressing that could lead to new arrests and expand the judicial siege against those who facilitated these crimes. The Mayor’s Office of Medellín reiterates its unwavering commitment to the defense of children, effective international cooperation, and a zero-tolerance policy against the sexual exploitation of children.

“The United States of America will always seek to protect children near and far,” said US Attorney Hayden P. O’Byrne for the Southern District of Florida. “This prosecution and this sentence should serve as a warning to any predator who is trying to travel through our district to prey on children. We will find you and prosecute you to the fullest extent of the law. A life sentence for this conduct is entirely appropriate. Predators such as Correa are a scourge upon humanity, and must be dealt with accordingly,”  Hayden added.

“To the brave survivors, your courage was the driving force in this case, and I hope that the life sentence of this predator brings you some measure of justice and relief,” said Jose R. Figueroa, Acting Special Agent in Charge of Homeland Security Investigations (HSI) in Miami. “This investigation underscores the global and horrific nature of child sex trafficking and the importance of international cooperation to end it. I thank our federal and Colombian counterparts for their steadfast dedication and reiterate HSI’s continued commitment to holding those who prey on minors fully accountable,” Figueroa continued.

HSI Miami investigated the case with assistance from HSI offices in Cleveland, Ohio, and Bogotá, Colombia, as well as US Customs and Border Protection (CBP).  The Narcotic and Dangerous Drug Section’s Office of the Judicial Attaché in Bogotá, Colombia, also provided critical assistance. Major Crimes Deputy Chief Assistant US Attorney Lauren Astigarraga prosecuted the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by US Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

To report suspected human trafficking or to obtain resources for victims, please call 1-888-373-7888; text “BeFree” (233733), or live chat at HumanTraffickingHotline.org. The toll-free phone, SMS text lines, and online chat functions are available 24 hours a day, 7 days a week, 365 days a year. Help is available in English, Spanish, Creole, or more than 200 additional languages. The National Hotline is not managed by law enforcement, immigration, or an investigative agency. Correspondence with the National Hotline is confidential, and you may request assistance or report a tip anonymously.

To report online child sexual exploitation, visit https://report.cybertip.org/ or call 1-800-843-5678. The Cyber Tip Line is operated by the National Center for Missing and Exploited Children (NCMEC) in partnership with HSI and other law enforcement agencies.

To learn more about the National Resource Hotline, visit https://www.humantraffickinghotline.org. To learn more about the US Department of Justice’s efforts to combat human trafficking, visit www.justice.gov/humantrafficking.

Headline video credit: Law & Crime Network YouTube, Featured image credit: City of Medellín.

Gisela Cardozo: Good afternoon, I am Gisela Guijarro Cardozo. I am currently the coordinator of the Medio Magdalena group of the National Environmental Licensing Authority (ANLA). I am a chemist specializing in laboratory management, financial management, and organizational development. I have a master’s degree in leadership design and project management.

Finance Colombia: And Mr César.

César Zárate: Good afternoon. My name is César Zárate, and I am vice president of development for Wattle Petroleum. I thank you for the time you are giving me here. I am a business administrator with an emphasis in marketing management and a master’s degree in senior management from the University of Disney. I am a project structure for commodities. Whether it is oil, gas, or any mineral. We are now focused on natural gas in Colombia.

Finance Colombia: Thank you, and we must give thanks to the support of the Ministry of Mines and Energy, the National Agency for Hydrocarbons (ANH), as well as the gold sponsor in the event, OCP Ecuador. Well, then I think we have, if I am not wrong, in the presentations. No? Well, then let’s get started. Ah, yes, okay. Okay, to make it more interesting, we are going to make it more interactive, so with our speakers and also with you guys, with questions about the talks. So I want to start with César. And my question is, what do you think can be done in the short term to improve the charging factor in the gas fields here in Colombia?

César Zárate: Well, basically, it is to allow access to marginal fields or minor fields that companies like Ecopetrol have, which are not operating because they have them there without putting them into production. It is no secret that the operating cost of large companies can, not can, but it does impact the management of small fields. So, what the big companies do is simply: “Oh, it’s a small little field, leave it there.” For a small or medium-sized company, it may already be interesting. So, allowing access to those fields. But in the short term means the short term. What for? So that we can access and be able to manage any form of business that is interesting to the owner of the field too, to access and be able to start working those fields to generate not large quantities of natural gas, but it can impact production if there are plenty of them.

“We are talking about a very good quality crude. But in both places, something very important happens. The communities open the door to the companies.” – César Zárate

Finance Colombia: Gisela, is environmental management an investment or an expense for hydrocarbon projects?

Gisela Cardozo: That is a question where I have the ideal audience here to answer it, but well, I would like to give a general outline in this sense: How do we, as the National Environmental Licensing Authority, see the investment made in environmental management? Everyone here has talked about many very interesting lines, about clean production, about reducing CO2 emissions. All this is excellent for the environment. But why? Companies do it because it is beneficial for their accounting and financial balance, right? Of course, tax regulations benefit them, excellent, and then the company says, “Yes, we are going to make cleaner production”, but because it is profitable for the business. But they do not see environmental management that way. They see environmental management as “Oh, that’s what we have to do to comply with the authorities. That thing we have to do because it is an obligation.”

And it’s a nuisance. “Oh, they’re coming to follow up on us again this year. What a drag.” No. Environmental management has to be seen by the companies… and well, please help your CEO, your executives see it; it is an investment. An investment because every peso that you put into your environmental management, if you look at it carefully, is a peso that you are going to avoid spending on socio-environmental events that will bring you much more serious consequences in terms of investment. Every peso that you invest in knowing your environment and your context and managing it is a saving for the company in all its operations.

But sometimes it is not comprehensible to us why it is not seen that way within the companies. It is seen as if the operation is completely disconnected, environmental investment is something, and complying with environmental regulations is a nuisance. No. If you look at it, all your licenses and all your environmental control and monitoring tools give you the guidelines to be more and more operationally efficient. They give you the guidelines to avoid social conflicts and environmental conflicts. That can stop a project, and it can make you lose an investment.

It has happened with many projects. For example, you sometimes, when you are going to do a workover in your wells you say, you deceive yourselves, I think, you say, “Oh, no, this is going to be a very short-term thing. So we are not going to temporarily relocate a community that lives very close, or it is not necessary to have the equipment in case there is a spill. No, no, that’s all under control.” It should not be like that. You have some management and control measures that tell you that you have to follow them; however, you ignore them, sometimes because of costs, I think. But the worst saving that a company can make is the saving in its environmental management, that’s the wake-up call we make to you.

Finance Colombia: It’s true. It makes me think of Deepwater Horizon. Right? So if you do it, it’s cheaper to do it correctly. It’s cheaper to do it right, okay, and if not, you’ll pay.

Gisela Cardozo: Twice, thrice, and much more.

Finance Colombia: Yes, right, it’s true. Well, César, what medium-term policy do you think the government should implement?

César Zárate: The government could help the industry from a tax point of view and improve conditions, especially in the area of recovery. Why? Because that discovery has already been made, it has already been produced, it has already been paid for, right? And if an additional investment is made, more crude can be produced, more gas, without the need for having such high additional investments in exploration, in environmental licenses, in general, in the costs of an initial project. If there is a recovery, I, as a government, encourage the recovery of that crude and gas from the tax point of view or the point of view of return on investment. We are going to struggle with these years of natural gas shortage that we are experiencing. Because there is no shortage of crude oil, but with natural gas, the price is already showing a shortage.

We see that the Henry Hub in Alabama is at $2.15 USD, $2.20 USD, and has gone down to $1.80 USD. Here we have gas contracts of $8, $9, and $10 USD. That impacts the country’s finances and impacts the families because of the high costs. But if there are a series of tax benefits in the medium term by the government, many companies will be interested in working on recovery and production will increase.

Gisela Cardozo: Loren, if I may? César had said something in the previous question that I found very interesting, regarding the small fields, and that this could be an economy. And I was thinking about it from ANLA’s point of view; there are many of those small fields where we’ve asked the owners 5 years after they obtained the environmental license, and they have not started operations.

We ask them because the regulation says that the license may expire in a certain sense, right? And we ask the companies and we say to the owner, “Well, let us know if you want to continue if you are interested,” and most of them say, “Yes, but I am raising investment, I am doing something else.” Look, they are fields that already have an advanced process, an environmental knowledge of the territory, and they have already invested. It seems to me that the way to encourage, precisely, to increase this hydrocarbon production would be that. It would be very good. But bear in mind that after several years, the information must be updated, right?

Finance Colombia: Speaking of which, how to optimize. Or did you want to answer?

César Zárate: No, what Gisela says is something that would complement this process. We are wasting a lot of resources in the country, as you said yourself, there are many minor fields that the companies have abandoned. Now, are they economically viable for small companies? We have to evaluate it, but now is not the time to think, “Are they economically viable? Are they not economically viable?” No, we have to encourage that increment in production.

Finance Colombia: You talk about something very interesting. I’m from Ohio, and in the United States, the oil industry started in Pennsylvania, where the oil is very much like.

Gisela Cardozo: Shallow.

Finance Colombia: Yes, yes, and well, and also Ohio and Pennsylvania are neighbors. Standard Oil and the Rockefellers that was all in Ohio and Pennsylvania. And when they discovered oil in Oklahoma and Texas, which was like much better quality because we have a lot of sulfur, and it’s also a bit heavy. And when they had that light crude there, everybody left and left Ohio with corn and cows. But the industry almost died in its birthplace, where it was born, in Ohio and Pennsylvania. But something interesting happened, using technology and mostly small producers.

The structure is a little different here; the State owns the subsoil resources. In the United States, for example, it’s like Mom and Dad who have two avocados and two wells. Not avocados, but basically, you own the oil, and so then there are many producers, micro-producers. Like I have a friend who has an estate and they have four wells there, and every two weeks the tank truck comes, and it’s like it is here with the cows. I live in Antioquia, and there, those Colanta trucks always pass by.

Gisela Cardozo: Instead of milk, they take oil.

Finance Colombia: I understand that the legal structure is different here, but basically, I understand that in the short term, there is not going to be fracking here in Colombia. I understand that there is no desire from the government for that. But basically, what happened there? It was reborn by using that technology, and now that it has the technology that removes sulfur, the oil sector has been reborn in states such as Ohio, Pennsylvania, and West Virginia.

But not with Chevron, but with small producers. And so adapting to those things. Okay, if there is no fracking in the short term, there is no fracking, but there are many things that can be learned to make the small fields viable, not micro fields, but small fields here in Colombia. It is interesting and it’s worth looking into, not only the mega fields, right?

César Zárate: Correct. Because in the American case, and allow me to go a bit deeper, it’s the type of formations. The Utica Formation, which is the one in Pennsylvania, is a formation of heavy crude oil with sulfides, where not necessarily, but fracking kills, even if they are small producers.

The Eagle Ford formation in Texas is completely different. We are talking about a very good quality crude. But in both places, something very important happens. The communities open the door to the companies. What happens here in Colombia? No matter where you go, the community sees the operator as an enemy, right? Because they go, “Here come these guys, they take, and how does it benefit me?” Over there, it is the opposite, there it’s, “Come over, I welcome you because I am the owner of this farm and this subsoil is mine, and the money is for me, and the company is going to pay taxes.”

Here, the community sees the company as, “What are we going to get out of the company?” And so the company is strangled between, obviously, the taxes, between the royalties that have to be paid to the ANH for factories, that have to be paid to the ANH for the visits, right? All that economic burden is very heavy.

And the risk increases. Besides, when you drill and you make a mistake, 3 or 4 million are thrown away in the wells. Right? And if you hit a well, whatever it may be, a thousand, ten thousand barrels, whatever, then it’s, “Oh no, those bastards, of course they are taking it all.” So the issue is we have to change that paradigm, we have to look at how the communities can benefit more, but all this has to go hand in hand with a series of tax benefits for small companies, those that take the risk, and not all of them. For midstream and downstream, the risk is nothing. I already have something that I transport, or there is already something, so I set up the compression if it is natural gas. But upstream is: find, drill, have that frustration of if it was good, if it was bad, tell a story to the investors. That big factor, I would think that if we want to increase the production of both gas and crude oil, it is necessary to give more opportunities in terms of tax benefits, and opportunities in general, to small companies.

Finance Colombia: You talk about something important, it’s like the importance of safety for drilling technicians, and to do it, taking the environment into account, lowering the risks. And in that aspect, Gisela, how does uncertainty affect the knowledge of the physical, biotic, and social context for an environmental procedure, or in the productive stage of a project?

Gisela Cardozo: Very relevant to what we have been talking about, right? What is uncertainty? It is a lack of knowledge. When I do not know, the less knowledge I have, the more uncertainty I have, and uncertainty is a hidden cost. Uncertainty is error, so how do we remedy that? Uncertainty is always remedied with knowledge. What happens, and why do they fail? Many, or well, not many, fortunately, only some environmental procedures here, from the licenses, from the modifications requested by the sector, fail. Because even though there are some terms of reference that, as the authority we consider, are very clear, and are already well-known by the companies in the sector, they submit the minimum information possible.

The shortest. Careful, if it says scale 1 to 100,000, and we, and I mean, you, have information, you must have much more information at smaller scales, but you are not going to present it. It only says 1 to 100,000, and we are not going to have it ready either. So, what happens? They present insufficient information if we value the impacts of the zones. Understand that the contexts, due to anthropic interventions, especially now, have changed a lot and change very easily.

You may have done an environmental impact study two years ago, and now you submit it, and that context is already changing. We go to the field, we encounter different things, and as a rule, there is a time for the gathering of additional information, you are asked for that additional information, and you do not have time to present it. Why? Because you had planned that it would be easier to spare that environmental cost. For what? So always think about that, that the investment you are making in information in the context of your projects is not only environmental, it is operational, because it is information on geology, hydrogeology, geochemistry, animal habitat context, forestry, etc., where you are going to have to intervene.

A real-life case, as we call it, right? What happens? Well, a company has its environmental license, has its environmental management zoning, and says, “Done, the authority told me that I could put my platform on this site, it is within my permitted zoning.” And they go there and start building it, when the obligation, as you know, is to have a specific EMP when the platform’s intervention is going to be made. What is the objective of that specific EMP? To land on the current context and to a much greater level of detail. It is not a scale of 1 to 100,000 or 1 to 50,000. You already have it, because you should have gone to see where to build, what the land is like, “Is it geotechnically stable? What do I have nearby?” And you didn’t identify that some of the rivers that we have are very meandering.

Especially in the plains, in the valleys, the river moved its course, from when it was assessed, to the time when they were going to build the platform. And before they were outside the river’s course, when they started to build the rails, the platform, they were already drilling the well, with how much it cost to move the drills. All of us understand the high costs of the sector. And we get complaints, environmental complaints, we go to the area, no, the river changed its course, and now they were already in the area, in the protected zone. How can such a crass investment error be possible? All the lost investment, why? Because it cannot be allowed in our environmental regulations, they are resources.

It means continuously exposing yourselves to flooding on that platform, to contamination of a river, of an environment, and to social conflict. So, notice why I told you at the beginning, look at it as an investment. Environmental management is an investment. It saves costs, and all that waste of resources just because someone did not pay attention to something that, well, you could say was obvious, right? But no, look, and we miss it.

Finance Colombia: Right. And César, in the case of security in the areas, what could be improved?

César Zárate: Well. A few years ago, specifically three years ago, in our case and the case of the majority, the operators had agreements with the army for the protection of course of the workers’, of the infrastructure in general. Two years ago, we tried, not tried, it was time to renew that agreement with the army, and the army said, “No, the agreements are over.”

And they put us in a pretty difficult position. Especially the operators that are in areas that. Almost 99% of the operators are in difficult areas, in complex areas such as Catatumbo, it is pretty special because of the type of social conflict as all the outlaw groups are in that area. Having this type of contract with the army is key to being able to protect the investment, protect the workers, and protect the communities themselves.

We had a very sui generis case, where the army was passing through our lot, and there was fighting with the outlaw groups. And these groups decided to put dynamite where the army was going to pass. They did not care. Next to a gas pipeline.

You can imagine the kind of catastrophe that would have occurred if those fights had exploded at any moment. Think of a house, in your house, those who cook with natural gas, I think most of you here, right? You open the natural gas a little bit, and if you take too long to put a match… if it is automatic, well, it’s on, but if you take a little too long to put the match, it goes boom, and it explodes. And we are only at 120 PSI pressure. Do you know what a truck at 3600 PSI is like? Or a gas pipeline at 1200 PSI if you put something in it? So this type of protection in the case of hydrocarbons is key.

The government has to understand that this private investment must be protected, but more so that it is an investment in the life of the communities as well as of the workers. So, in my opinion, these types of agreements have to return; the government must understand that this is a key part of developing the industry. Added to the fact that nobody wants to put their money at risk in an area where the outlaw groups are putting pressure.

Finance Colombia: Wow. I imagine that risk, what that explosion would be like, about 3600 from here to Bogotá.

César Zárate: Exactly. The gas pipeline goes at more or less 1200 PSI. But let’s say, let’s put it at 800, 1000, but in the time the valve closes, that is a catastrophe. We have to solve the issue here in Colombia ourselves as a country, right? Solve this problem. But until that happens, the protection of the state, especially the military forces, is important.

Finance Colombia: Right. Well, another little story. In the same estate of my friend that I told you about, once a friend of mine came, she was Dominican, but well she was born in Manhattan, in New York. Many of you who have visited New York know that there is not a single tree.

César Zárate: Rich girls.

Finance Colombia: Exactly, basically Washington and all that. And there isn’t a single tree in New York. I couldn’t live there because there’s no green, nobody has a garden, or anything like that. So what happened? She won a scholarship or something to study at Ohio State, in my state. And then we went to southern Ohio, where the farms and all that are. And that was all exotic for her, because there like you have to go to a park to see a tree, like going to a zoo for us. And I was showing her, “Look, here that tree is a walnut tree and that’s a maple tree, and so on.” But she was like somebody super-very much an activist, very anti-oil, those people who are always doing shows in front of the bombs and stuff. And she’s like, “No, you have to do away with oil because look, it’s going to damage all of that.” And I set a trap. We are walking on the trail, on the estate, okay? It’s all forest because my friend didn’t plant anything; he only earned it through the oil, and they used the farm to escape from the city. So we are walking. She was telling me all about how if there is oil, we are not going to have any of the forest that we have. And I set up a trap very well.

So, walking and walking, we get to the first well. And that well the problem was that it was flooded by all the like, plants and bushes, and almost nobody came, because the forest was assaulting the well, not vice versa, and there were rabbits, raccoons, and things there. And I said, “Such as this one?” And, if she hadn’t seen a tree, it was her first time seeing an oil well. Okay, so I was like, “Tell me what you were saying?” and well, obviously she went quiet.

But my point is that there is a deficit, that there is a failure in education. You are from the industry, you understand the good and also the bad, the good and also the challenges. But I think, and I have noticed here, well, everywhere, when there is an emotional reaction about oil issues. And very few of the people have any direct experience or understanding of how the industry works. They only see it like once every 10 years, when there’s a big tragedy like Deepwater Horizon, or yesterday, a ship went down in a cyclone that’s happening now in the Philippines. So my question, Gisela, is, talking about education, okay, how to optimize the generation of environmental knowledge in the development of the projects? That doesn’t mean being “Oh, you have to be 100% pro-oil in all cases,” but having a balance and not letting fear and ignorance manage everything. What is the role, the part that education plays in this aspect?

Gisela Cardozo: Very much about this part you were mentioning, knowledge, and I say that the sector has the responsibility not only to consolidate that knowledge in the three basic components that, well, at least from the authority we handle: the abiotic, biotic, and social components, which are the main identified ones. They have to be reinforced. How can this knowledge also be strengthened? Look, when we talk about science, technology, and innovation, we have always identified three basic pillars to support it, which are the state, the companies, and the academy.

I mean, the academy, well, here it’s you, Loren, let’s say, right? Here are the three pillars that support this knowledge, and the three pillars that can help you reach the communities. Look, if there is a good environmental management group in a company, I insist again that it is an investment; it should not work as that accessory group that they have there, because the norm requires it, and then we must have it. No, it must be a group that must interact permanently with the operational part.

The operational part has to be nourished by what the environmental parts gather from monitoring and making decisions as well. Because investment decisions, as we were saying, if it is not viable environmentally, they stop them in time. But if nobody tells the environmental group, the environmental group is isolated, and so on. If you do not interact with the academy, the academy is an independent actor that the communities believe in.

We see many conflicts in the territory, and we see very responsible companies in the hydrocarbon sector. I would say that it is one of the sectors. Well, ANLA changed it to regions. And we had to take on in each region all the other sectors: infrastructure, energy, and we even manage zoo-breeding. So, if you compare the sectors, the hydrocarbon sector is one of the most organized in mining in general. There are some black sheep, right? But in general, they do a good job, they are responsible for the environment, and with the communities.

But I don’t know, it is as if they aren’t preoccupied with taking this knowledge to the communities. What we talk about, man, partner with the academy, reach out to them, explain to them. The communities, well, we go with you, and they say, “Oh no, right, you are from X company, you are going to defend your company.” Whereas if you take someone from the academy who is independent and objective, and most of them can be environmentalists, let them be objective and reasonable, and convey the reality, the truth. Do that exercise.

I was listening here to some of the previous speakers talking about their corporate social responsibility programs, environmental issues, and so on. But it seems that these communities never speak out. When does one hear this positive news? I don’t know if the sector is lacking, I don’t know if it needs more unity to, well, make a better use of joint resources and tell the communities the reality. Loren is right, someone who is here in Bogota, I remember because we also have a small farm, and once we took the children from my son’s kindergarten. Many years ago, right? And they arrived and saw a cow and those children: “Ah!” They had seen them in photos, but you don’t believe it. I was like, but what? The chickens ran away, scared of seeing the chickens, the chickens were chasing the little boy, and they were all like this.

They had never seen it; they are very much city kids. That’s what happens to us. And where is the public opinion, which carries more weight? Also in the cities. In the rural communities, anyone who comes along gives them false news. Or they think it is true that because you have an oil well next to you, you are going to get sick, you are going to contaminate everything you grow around you. Disprove that. With what? With knowledge, with science, with education. Invest in that, it will be more profitable.

It is something that, many years ago, I visited Panaca for the first time, there in the Coffee Axis, with my daughter, who is now 22 years old, but at that time she was 14 years old, and she spent 2 years here in Colombia. And I loved the purpose that Panaca has, and that is to teach people from the city about the importance of the countryside. And I don’t know if it’s very feasible to put an oil amusement park, that would be something. But that was something. Because it was entertainment, but also didactic.

Finance Colombia: Like okay, families who go to the coffee parks come and also visit Panaca, and people, like your son’s classmate, know nothing about the countryside. I am also from a big city, but I was lucky enough to spend summers working on a farm in the countryside, so it is so important to start with young people.

Gisela Cardozo: Exactly.

Finance Colombia: Okay? To have… my point isn’t one side or the other. I think of myself as an environmentalist, but I am not an extremist. I understand the importance of Colombia having self-sufficiency in its resources. Ok? Yes, we need to preserve, we need to advance, to evolve, but that doesn’t mean that tomorrow we cut everything.

And who is going to suffer the most? The people with fewer resources, if we do that. Yesterday I took a picture and sent it to my wife and about 20 of my best friends here. Because the EPM guy came over, and I am an EPM customer, he told me that the price of natural gas is going up by 100%, okay? And I already pay for EPM, I pay for gas, and I thought, wow. I said to my wife, “Look, we are going to complain and be angry, but either way, we are going to pay the bill.” But there are people in Comuna 13, in Tricentenario, in Santo Domingo, there in Medellín or in Soacha or Usme or here, where it is a struggle, where if they raise the prices 100% because of shortages, okay, for an idea up in the clouds, they are the ones that are going to suffer the most. And what is going to happen? What happened in the Dominican Republic and Haiti? In Haiti, where they do not have natural gas distribution in the tanks like here in the Caribbean, people continue burning firewood, ok? Talking about deforestation, talking about the loss of the Amazon and the forests here, if people don’t have access to natural gas, they are going to go back to burning.

César Zárate: The forests.

Finance Colombia: Exactly, something we are fighting against. So, you have to think about the effects and the consequences beyond the next step. That is one reason why I think education is so key. I understand if, in Colombia, you as a country say, “We don’t want fracking.” Super, that’s fine. But what I don’t agree with is, like, about 3 years ago, this was in the news, in the last administration, and there were protests and such. And I said I’m going to do a survey. I asked five people, my wife and a few others, “Okay, are you for or against fracking?”, “Against.”, “Okay. What is it?”, “Something gringo.” “Well, I’m something gringo, but.” But really, they had no idea what it was. But we’re against that because they heard, I don’t know, over protests, that it’s something bad. And, well, I don’t take a position like should have it or shouldn’t have it. But when you are making decisions from a point of ignorance, from a point of fear of not knowing, at least. Make your decision, be against fracking, but be against fracking because you know what it is. You already know what it is. But with the people who vote, people like the public, it’s important to have democracy; it doesn’t work like that. The people are ignorant. So, talking about the processes, on the environmental aspect, how do those processes influence the development that you do?

César Zárate: Well, the environmental issue it’s as far as it is wide. But usually, the people who are involved in making the environmental laws are well prepared, while others we consider lack a little bit of knowledge to be able to make this regulation.
The topic of fracking, for example, is something that the country needs. And the decision is very simple. How do we want the gallon of gasoline? Do we want it at 40 or 50 thousand pesos? And I don’t know any environmentalist who doesn’t love to fly in an airplane. They all love to fly in an airplane. Everybody loves to travel, don’t they? From what the price of JP54 is, 80 or 90 dollars a barrel, to how we want it? Do we want it at 200 a barrel? So that the ticket to Medellin costs (unintelligible) pesos? The decision is in our hands.

The issue that Loren and Gisela brought up, we just have to teach them. You have to take the children and show them the reality. Of course. Hydrocarbons produce CO2, the molecule. well, I have the best solution of all. Nature itself invented the most beautiful machine to capture CO2. They are called trees. It is simple. We are going to compensate for the emissions with trees until a definitive solution comes out.

Everyone has their own opinion, but on my part, if you are in an electric car, you pollute more. Hydrogen is the way. I think that the countries that are as advanced as Japan and Germany, with the hydrogen issue, will reach a solution very quickly; the United States, too, and that is the final solution. Because hydrogen is the most abundant element in the universe. So, I know that there will come a point when hydrogen will replace hydrocarbons, little by little. Because hydrogen cannot make plastics. The hydrocarbon part is the plastics and many industrial processes. But yes, with hydrogen in 20, 30 years, we are going to get to the point where we’ll say, “Okay, no more exploitation.” In the meantime, we have to be realistic. For one, we have to control climate change, and governments have to commit to a minimum amount of tree planting. We are wiping out our rainforests. What is the biggest polluter? The Chocó mafias take all the trees.

Let me tell you about a specific case. In the Andoas base, in Peru, where one of the largest oil fields in Peru is, the most shocking ecological crimes imaginable were committed. The first one: the operating company at that time would take the contaminated water and dump it into the jungle. We have 500,000 hectares; if we dump 2000, 3000, nobody notices. After a solution was found and the Peruvian government noticed and stopped this type of thing, the communities appeared. It is the communities themselves that pollute. When they were told the same thing, “We are not going to give you a contract,” The contract for the oil pipeline that goes from here, from the jungle to Talara. What happened? They put a pump on the pipeline every two months, every month, why? Because it was the communities who went, cleaned, fixed up, whose business it was. They would put it in a pump.

Then, when the government figured it out, they took it away. But today, a field of 180,000 barrels from here could solve the energy issue in Peru. It produces 8000. The infrastructure is completely disarticulated, and the communities are destroying the jungle. If an operator comes and cuts down a tree, they all go, “You are destroying the jungle”. But they, the communities, cut down the trees, they sell them, they don’t reforest. The operator tells them, “Here I have plastic bricks; let’s use the plastic that has been collected to make houses.” No.

All this is the result of ignorance. I think it is the only way. Education with children from a young age, showing them that it is a resource, that we need the energy, we need to move the ships, so that the global supply chain doesn’t collapse. We saw it with COVID-19. It more or less stopped, and the world collapsed. We need the plastics, we need to live; we need the gasoline; we need the jet fuel; we need that energy. And that comes from oil and gas. The rest is lies. The rest is demagoguery.

Tell me, when have solar panels replaced power generation? They replace a part of it, but look at the problem in Chile, they are stuck with thousands of meters of unusable solar panels. What do they do with that? They pollute. How do you think the electric car works? It works with the worst stabilizer of all. You have to remember when these mobile phones came out in the ’90s, when everyone would say, “Ah, it explodes!” And it was true. You plugged in the phone, and it was a lottery whether it exploded or not. Because lithium vibrates at very high frequencies. Then they figured out, you know what, there are stabilizers, like cobalt. “Ah, cobalt is the solution, yes.” Who takes the cobalt ores? They are this small. I invite you; you can go to Africa and see the disaster the companies left there. Children between 5 and 11 years old take the copper ore.

Finance Colombia: In Congo, yes.

César Zárate: In Congo. Digging out the little ores. At 11 years old, with leukemia. So, that whole tale about ethics and this and that, no. It is action. You have to overcome ignorance. We have to do research. We have to advance on hydrogen, but in fast steps, and we have to overcome ignorance. And children have to be educated so they understand we are in a world where electricity is not free. This is being transmitted by copper, isn’t it? We have to find the copper. Or we can bring a nuclear plant here to generate electricity. The decision is ours as a country, but we have to make it with knowledge, not assumptions. The road to hell is full of good intentions. The road to heaven is full of actions. It is to act. To overcome ignorance. That is what we have to do.

Finance Colombia: You’re right. Yesterday I was walking around the exhibitions, and we had some very, very interesting companies. I saw a company that does like geolocations, using the readers of where the oil pipelines are and things like that; there is one that has the high voltage cables that they need, that are resistant to high temperatures and such, like Distribution Plus, SIS MARCO, Promat, and Target Horizon. There’s another one there where they do like mapping, oh, I didn’t understand very well, I wanted to ask them because they do like very advanced things about what seems like mapping, or saying where we are going to map things. Talking to others like you guys, like my friend Slava, who does testing, non-destructive testing, he has to go over all that high-tech stuff. And the good thing about that is that it’s making the industry more efficient.

I think part of what we’re fighting for, of all this anti-oil sentiment, is because of history. In Cleveland, Ohio, where Standard Oil was for many years, in 1970, the river caught fire. Cuyahoga River, which runs through Cleveland, caught fire twice because of so much pollution. And at that time, when Rockefeller and those started, it was senseless, and all the factories, not just oil, but anything, dumped their stuff in whatever river was closest. We still have problems with PCBs. And they are still debating with General Electric about what happened in the Hudson River, which runs through New York. The debate was like, “Should we dredge and remove them, or should we just leave them alone?” General Electric wanted to leave it alone because they didn’t want to pay like 3 billion dollars. And it was for damages that they did, not now, but like 100 years ago in history, when it was a legacy. But even now, we’re still paying the price. We don’t want to, nor can we, eat oysters from the bay or anything like that. And my question then, Gisela, is what role does technology play? How can we take advantage of technology to enhance the environmental management of the sector?

Gisela Cardozo: We go back to this topic of the academy, innovation, science, and technology. We have to implement it. All of you have been talking here in this congress about having developed more clean technology, new systems for exploration, exploitation, refining, etcetera. But technology is also in the environmental part, please do not forget about us. The monitoring that you do is more effective when… Now the equipment, we have equipment that sends transmissions in real-time. They give you the alerts. The alerts, if they are having some kind of failure in the piezometric wells, tell you, “Hey, my concentration changed, I have hydrocarbons, or at least my conductivity changed.” And you go, “Oh, how come the conductivity changed?” Well, there must be some leakage, of what? Of deeper groundwater that is getting there, right?

But this transmission in real-time is fundamental. Look, ANLA is making a very big effort, it has been doing it for a while, 5, 6 years now, in generating a technological monitoring center that we have, where we are going to ask all of you to please go in. Now, report to us in a more, let’s say, standardized way, so we can feed from that data. That data is going to be available to all of you. Note that it’s going to be cost-saving in knowledge. Somebody has to submit an AI, somebody has to submit something from a region that has data. This tracking monitoring is more extensive than what you do for a license; it’s time data, and it’s multi-temporal. You can look at trends. You can get so much information from that in very large territories, all the ones that you report to us. And not only from the hydrocarbon industry, but we also ask that from the rails, well, the ones that we manage, 4G, hydroelectric plants, thermoelectric plants. We have information on air, emissions, and noise in the regions, and that data.

An institutional base is being consolidated, and it will be accessible – you know that all of ANLA’s data is public, and you will nourish from it. Please present us with the complete environmental compliance reports with good traceability. Not, “Yes, the information is in file X,” and file X never appears; it does not even have the name file X somewhere. You are going to be able to nourish yourselves from that. Knowledge is for everyone to reuse. But technology is very important; we all have to advance. The faster the data transmission, the more agile the media; artificial intelligence allows us to make projections, models, hydrogeological models, geological models, and geotechnical models.

We all nourish from that, and it will give us security, especially in an issue that is fundamental for this industry, to avoid events that give a negative impression of the sector. You can work very well, a single event occurs, and you know that’s when there will be national relevance. That single event already brings negative attention, doesn’t it, to the industry? So, be aware that a company speaks for the whole sector. So, please, let’s appropriately use technology, and it is excellent. Let’s apply it. ANLA is committed to that, we want you to learn that you can always go and see our monitoring center, and our databases, always.

You know that we have modernized a lot, we hold our meetings virtually to save you what? Costs. We no longer ask you to come to us from your headquarters. We do the oral meetings and the follow-up administrative acts virtually. But whenever you want any face-to-face meeting, you are welcome to come to our facilities. If we talk to each other, we understand each other. And I wanted to take a minute to come back to something that César said, which I thought was fundamental. And I agree, the best CO2 recycler factory and taster is the trees. That’s the reason for the environmental compensation; that is why it is logical that the compensation starts as it should.

From the moment the environmental license is issued, you are required to have a compensation plan. Look, we now have cases of companies that drilled, did not find oil, or for x or y reason at the time, public order or something like that, they decided to close operations. 10 years, 15 years, and 20 years later, they have not made the environmental compensation. They even closed their trading house and their Colombian branch, and they want to leave that environmental debt with the country. This speaks very badly of the sector. Look, the communities are asking for this.

They often do not know that if you cut down a tree, you have to pay 5 or 10, depending on the species. They don’t know the important biological corridors that are being generated because now we are looking for eco-connectivity, especially for mammals: tiger cats, leopards, jaguars, and pumas; pumas have been seen again in our areas. A video that was sent to us in the Topocoro reservoir, which is the one in Hidrosogamoso, really caught my attention. A puma swimming. So we are seeing fauna again that we hadn’t seen for many years. Why? Because the authority seeks that these compensations are located in the best sector. But please, environmental responsibility is also about that. It is not only about “Oh, I use clean technology, try to recycle.” No, it is a very important environmental commitment.

Finance Colombia: Of course. Here in Colombia, as you well know, you have something special. In this country, one thing that I love is that a person could spend their life here and still not see all the natural wonders. From the Amazon rainforest, to. I went to Nevado del Ruiz, there in Manizales, now it is rough, but before, when you could go up, it was like another planet. And so many things. Or you are in the Tatacoa desert, or I went to the Guajira one. And it is important to protect that. I don’t think there is anyone who doesn’t believe that. Well, yes, some criminals are destroying with mercury, like in illegal mining and those things. But there are also responsible companies.

One thing I have seen in the mining sector is that there are some companies, well, there are some bad ones, but some very responsible companies, not just on the environmental aspects, but also the social ones. When they arrive in a town and before starting anything, they look at what they need there, and they talk to the local NGOs there. And like they do social and educational programs and things like that. I hope we have time for a couple of questions. I don’t want just us to be talking. I hope this can be interactive. Does anybody have any questions for the panel? For them, they’re the experts, not me.

Well, I have a question for you guys, so I want to ask, well, the same issue, but how can the need to increase oil production be balanced with climate and environmental sustainability commitments? It’s broad, but what are some ideas for that balance?

Gisela Cardozo: You start, César.

César Zárate: I agree with Gisela. The environmental issue is critical for the country. It is simple to comply with the requirements. But that increase in production will only happen if a suitable environment is found. The communities, so that they don’t oppose, I don’t know, these are ideas that we all throw in the air, “Plant a seed.” Because the communities don’t like to be scolded. The royalties come from the central government, and we see where they are going. Just open the newspaper, and we know where our money is going. Why not let the communities manage a part of it, the municipalities? So that in the industry,y they see a friend, not an enemy. And that fact alone, that they open the doors for us, in compliance with environmental requirements, makes a much better climate flourish. The oil is there.

If you notice, all the formations from Colombia, from Ecuador, even, we are talking about Northeast 22 degrees. It is there. If we explore, we are going to find it all there. From Putumayo, passing Cali, Magdalena Medio, upwards, Catatumbo, and obviously Venezuela, and this part of Casanare, yes? Everything. Just past Venezuela, that imaginary division we have as a country, it is possible that the largest oil reserve in the world is there. But it passes the line to Colombia, and they disappear.

A little further, Northeast 22 degrees, are the reserves of Guyana. There, they are fighting and killing each other over it. We are talking about unimaginable reserves of crude oil and gas that bring a lot of progress to a country, money that we need to lift 20 million people out of poverty, right? But everythingis  in that balance. Exploration, production, communities, and environmental compliance.

That balance is very complex. Because speaking of NGOs, I’ll steal a minute, the American NGOs, the Norwegian NGOs, and the Nordic European ones come and tell the indigenous people of the area that the oil companies are taking away the blood of the Earth, of the Pachamama, etc.; the indigenous people oppose. But in northern Europe, those same NGOs say nothing about the production of crude oil in the North Sea. So we produce less oil, and they keep prices high. And who wins? That is why we are the ones who must provide the solution as a country. In that delicate balance that must be in place so that everyone in that chain is well off. The investor, the community, and the environmental side. And the money that must flow to continue investing in education and lift poverty.

I think it is that very delicate balance. And put a large part of that money into research of all kinds of alternative energies. That is the priority.

Gisela Cardozo: Yes, and I would also think that, if we consider what we have at the moment, of course, the sector can try to manage with the State this type of changes in taxation, in benefits. But that is something more in the long term, right? Let’s talk about what we have now and what they can do. You said it, Loren said it; at this moment, what is lowering the hydrocarbon production, simply? The social conflict, the social blockades, and all of this is what we have been talking about. I think the companies can manage it with good social relations. We, as an authority, experience it. Sometimes a company arrives and let’s say they are going to open a well that, yes, they already had it authorized, they have the license, they have the permit, it is within their zoning, but they had thought about it in their plans for three years from now. When they went to that community three years ago, they said, “Oh, done, here, such and such.” And the community, “Ah, well, yes, we know,” and so on. In three years, those people who live there will no longer be the same.

Or there are more already, but the company doesn’t put in the work. How hard is it to hire some professionals, please, who know how to manage communities? And before the community sees the drill coming, and sees all the people raising dust, making noise, putting out emissions. Environmental management is not a big investment, but please, the advances should always be on this level. We have seen that the communities are receptive, there are communities and communities, I agree. Some are also manipulated, but that should also be perceived by their relations group. From what side do we approach them?

There are some we can talk to, and there are some we cannot. Let’s reach out to the most reasonable people, have friends there, and listen to them. Sometimes it is simply a matter of having a post or giving them a channel where they can put their requests, petitions, complaints, requests, etcetera, etc., etcetera, etcetera. This social relationship, just from the social conflict in the country, a change in perspective towards the hydrocarbons sector? You are already going to improve production by at least 10%, I tell you.

The second point is that there is a law on science and technology in the country, on innovation, science, and technology, which allows you to be exempt from your taxes 100% of what you invest there. This gives you proximity with the academy and developments, developments that you can use in your operational part, and so on, and it gives you the proximity with the academy, so that the academy gets involved with the sector, feels more involved, and educates the generations it is already educating the way it should be. I don’t know if you know much about science and technology law, but it has some impressive tax benefits. Check them out and see that it is profitable, I would say, from what is available at the moment, right?

Finance Colombia: Yes, and I think, listening to the entire talk, it seems to me that the key is not to be, like, antagonists, like ‘The government versus the private sector.’

Gisela Cardozo: Let’s be synergistic.

Finance Colombia: That, that. And also, it’s very important to involve the town, the people. Like, everyone here is from within the industry, so you already understand what the sector is like and the importance of oil. But some people haven’t thought much about that, and public opinion is very easily swayed by a controversial article or something like that, or when a tragedy or an accident happens. However, it is like in the airlines, that 10,000 days can go by with nothing happening. But when there is a first accident, everybody is afraid to fly, okay? But when they go in their car, where there are crashes, they can’t even leave the house without seeing a crash in Rio Negro. But people are like, I don’t know, it’s fascinating how the mind works.

So, the important thing is that we need to work together. It’s not that we always agree, like there’s always going to be disagreement on issues like what should, I don’t know, the government policy should be, or fracking or no fracking, or more drilling or not… But to not be enemies, but working; “Look, we have the same goal, we work together even when we disagree, we are civil and think more in the long term.” So this has been very fascinating for me to listen to the opinions of you, the experts. And well, so now I invite you to take half an hour, a break, here with coffee and everything. Ah, we have a question. I don’t know if we have time for a few moments. I hope so.

Marielita Miga: Hello, good afternoon. This is Marielita Legardes Miga, an oil and gas lawyer from the Mompos Oil Company. I have a question for the panel. All three of you have an interesting view of the country and outside of it. And it is that, as a lawyer, well, what I notice, which I believe may affect production a lot, at least the investment in the country, is excessive regulation. Of course, it is necessary to regulate this sector, to avoid the tragedies of the past, to be more and more strict in what the best practices of the hydrocarbon sector are, and to bring them to the economy. However, I believe that many times we sin by wanting to replicate models from other places, where perhaps here we do not have sufficient technology, and we have not yet reached a level of progress that allows us to make radical decisions.

For example, in the case of the non-conventional, non-conventional resources. So I would like to ask you to tell us a little bit ab is your vision of this regulation. And I do not mean for you to tell it to us as lawyers, independent of your profession; what do you think can be done about regulating, and regulating with more and more restrictions, a sector that needs wings to fly in innovation? Because we are one of the sectors with the most innovation, with the most resources to be able to, with science, as the doctor said, overcome uncertainties.

So, what strategies do you think can be taken? I mean from a point of view, beyond the legal aspect, if those roundtables could not only be work roundtables with the communities but also with those who make the decisions in the country, with those who generate the regulations. And how willing are they? That is where government policies come in, right? Because the executive is the government. The one who generates the regulation is the government; the laws are from congress, but our regulation comes from the ministries. So I wanted to ask you about that. So sorry if I went on too long.

Gisela Cardozo: Well, yes, indeed, I am not as strong legally as you said, but perhaps from my point of view, it does not seem to me that the current environmental regulation is very complex, or very complicated to comply with. It is clear. It has been updated on some issues where the very knowledge from them has led us to it. Because, especially on the topic of emissions, the regulation has been evolving, and it is restrictive in certain aspects, but it is not so much about that. I don’t know, I insist that the sector should be underpinned much more by the academy.

Because you know that regulations always go out for public consultation. At this moment, Decree 10-76 is in a revision process. It is made available to all to receive feedback, and such. In the same way, the ANH and the ANM have also recently put forward different regulations for discussion. If you look, what do you see is of deep relevance in the country? The opinion is also of the scientific experts, of the experts from the universities. They move the thinking of our youth, of those who take to the streets to protest or support, they are the ones who convince them even. Their teachers, in the sense of the guru of an environmental issue, are the super-experts in something.

And they are the ones who give the most opinions when regulations are put out and such. Most of the comments come from experts from the universities because they are also the ones who provide the best basis for their comments. I would say that there should be more interaction between the sector and these academic groups. If they understand better… because it is very different to have a professor in the theoretical field at the university than for them to experience the reality with you, to go and get to know what it is, and apply their knowledge there.

I mean, science must be applied to become technology, to become innovation. But I see a lot of this distancing. The Academy is over there at their desks, in their laboratories, but not as a pilot plant, but very isolated. So, when they give their opinion on regulations, they are very theoretical. So we want to have Norwegian regulations, we want to have something that is not in our context, not our environment, and that is why we make mistakes that have been made in the environmental area. As you know, 30, 40 years ago, the very corporations and the nation said, “We are going to reforest with eucalyptus and pine.” Because they are the ones that successfully reproduce the fastest, right?

And what did we see, “Let’s harvest trout in our rivers,” and the intentions were very good, but it is this detachment, let’s say, in the regulations. We contribute from the authority, we have very competent people who have worked with you many times. Sometimes they move from one sector to another, and that is good because they get to know the sector, which lets us work as you said, in synergy. Let’s work together. When those norms go out for consultation, please also speak out, but in a well-founded manner, get your opinion, and give it. I do think that you are being listened to. I believe that society, the Colombian authorities, has usually been very democratic; they have listened. Let’s keep trusting that this will be so, let’s do our part.

Finance Colombia: Thank you. Well, that was very interesting, and thank you for the question. I felt bad, like “Ah, we’re boring people because nobody’s asking anything.” But that was very interesting. Thank you so much. If there’s anything else, we’ll be around to talk more about this. Thank you.

Gisela Cardozo: Thank you.

But we would like to give some more context to the public opinion and to the country, and it’s that this case, of the US citizen Stefan Andres Correa, is related directly to the Timothy Alan case. This capture is a product of the investigation done in an inter-agency manner with the national police and the intelligence and justice agencies of the US government. Remember that approximately 10 days ago, I had a meeting with the ambassador of the United States, Francisco Palmieri, with his whole team. All the intelligence agencies of the US government were there. Regional director of the FBI for the region was there, the HSI directors for the region were there, the directors of all the customs, military and migration agencies; joined as well by our national police led by General Lamprea in said meeting.

See Also: Miami Pharmacist Captured Attempting To Fly To Colombia To Sexually Abuse Minors

The conjoined work between the Municipality of Medellín, the national police and all intelligence and justice agencies of the United States starts to take effect with the capture of Stefan Andres Correa. Part of the discussion was how to stop these people, from the US territory, and with other nationalities too, in other countries, where there is already information that they are involved in the sexual exploitation of children and teenagers, and make it so this network of degenerates can’t even get on a plane from their countries to get here to cause damage. And that is part of the information we have been sharing already with different agencies, and we want to expressly thank our national police; the American government, headed by (Ambassador) Francisco Palmieri; his whole team; the director and the entire HSI team for the region. And I want you and the country to know how we got to Stefan Andres Correa.

A criminal that had already entered our country 45 times, since 2022; how is it possible that a man like this had the capacity to cause so much damage for so many years against our children, and no one ever did anything? Why? Because this was a topic that was kept hidden during the four previous years (the administration of Daniel Quintero), while it grew dramatically. And there is not only irresponsibility and apathy, but also complicity with all these criminals. It was known they were coming into our city and into our country to abuse our children. When they had the responsibility to care for our children, they did nothing, they turned a blind eye and did nothing for our children. And what happened? The phenomenon grew. More and more of these people continued to arrive, who believed they could continue to come into our country and into our city to do whatever they wanted, and that’s how they treated it. Because for a long time, they did whatever they wanted. But their party is over now.

Because we are not going to hide the reality that we have started to fight since the 1st of January, which we have shown, and it is clear to us that it’s continuing to happen, and with a lot of intensity. But we are giving concrete results in the fight against the sexual exploitation of children and teenagers. We are not going to deny the problem. But the world can’t believe either that this only happens in Medellín. It happens in the whole world. The difference is that in Medellín we are already fighting it, and that’s why the eyes are on our city today. And yes, we are going to fight this battle to the end. Because this fight is just beginning.

And how did we get to Stefan Andres Correa? Thanks to our national police, thanks to the intelligence agencies of the US government, and thanks to this conjoined work with the Municipality of Medellín. It’s how the investigators directly, coming from Ohio as well, where Timothy Alan is, fully identified, with a blue notice; will be made to answer to the American and Colombian justice.  While doing the interviews, our national police, our national general prosecutors too, and also the American agents…In the last days, when the victims of Timothy Alan are interviewed, they reach this man’s information, Stefan Andres Correa, who was the one that paid to hire, who paid for the food for the girls, in different parts of the city, to continue to sexually exploit them.

We are not facing isolated cases here. We are facing a human trafficking network with the purpose of sexual exploitation of children and teenagers. And this is not just one more case, it is not an isolated case. It’s a network that has to be dismantled completely. And I want to tell you that thanks to this technical proof, thanks to the work of the police, the prosecutors, and of intelligence agencies of the US government, and justice agencies of several states, where Florida is included, where Cleveland and Ohio are included, what happens precisely is the capture of this criminal that is part of the network.

45 entrances into our country since 2022. You just have to look at the chats of this depraved man, that are sickening as a society. But I also want to make a call to society. Today we are all outraged reading these chats, but I ask, where have we been as a society? Where has society been, rejecting what was already going on, which everyone turned a blind eye to? Authorities turned a blind eye for four years, and they didn’t get involved in an issue that was evident in the streets of our city, and that happened frequently. This man would come not only with his cellphones, but with the cellphones that he had promised the victims as a form of payment. Where, depending on the level of aberration he could reach with our minors, he paid them more or less, or arranged 300,000 pesos plus the cellphones.

What was avoided here thanks to the articulated work we have been doing, with the police, with the prosecutors, with the municipality, and with international agencies of the US government, it’s that the abuse of a minimum of four minors was avoided. But this network has to fall apart completely. And the first thing I want to say is that the investigation is ongoing, and the investigation is really moving forward in an inter-agency manner.

And this is a two-sided investigation, carried out in Colombia and in the United States, where there are Colombian and American citizens. And this hit against this American citizen captured at the Miami Airport is part of an ongoing operation. There are many more people linked to this process, both American and Colombian citizens, people who would also help out here in Colombia, and directly in Medellin; some of them identified, who would help with the recruitment of children. The modus operandi is, once they start recruiting one, recruiting two, they start taking them directly from their homes. They become truant. They fall into so many issues related to addictions, drugs, all the harassment…and they end up being a part of this network. And at the same time, the same girls and boys that are exploited are the ones in charge of, in this dark network, of searching in parks, in different areas of the city, and in educational institutions, making offers to their friends and classmates for them to go with them to those same activities. This has to pain all of us. And this has to horrify us as a society. This is not just another case, this is a case in which we are discussing structural issues. And like we announced on the Timothy case, we are not going to rest, and that is why the American agents have already come to conduct the interviews, and thanks to that, the information on this other pervert is gathered; this Stefan Andres Correa, who is facing a sentence of a minimum of fifteen years in the US, and permanent surveillance for life.

But entrance has already been denied to this one. My message is very clear, I want to tell anyone who wants to come to our country, or any person or any Colombian that wants to come to our city, that they are very welcome, but not welcome to do that. That if they have the intention of jeopardizing our children, we are going to chase them relentlessly. That is a decision we have already made. These are trafficking networks, and do not forget many of them are linked to drug trafficking networks. And here come, within the operations, many forceful legal actions, within the investigations carried out by the police and the prosecution, headed by General Lamprea. Here come harsh topics. Not only are captures coming, but the extinction of domains (civil forfeiture) on those real estate properties that have been used for these human trafficking networks, exploiting our children and teenagers.

I want to send a message. And not only to the authorities; the authorities are already coordinated, and we are working together. I want to give a message to society: This cannot keep happening before all of our eyes. These strange behaviors of people who go looking for children in parks, schools…Someone must have seen something, and for so long nobody has ever said anything. We must be horrified as a society, but so as to take action. To get more reports, so that our police can continue to act. In the last few days, there have been more captures carried out by the police and the prosecution. Unfortunately, as for the case of the Chinese citizen (“David” Zhen Liu), he was set free, but the process continues. And we are not going to rest until we get all the evidence against these depraved people. And I want to make it very clear: Whoever messes with our children is messing with all of us as a society. And the last message is to the heads of the family. Mothers and fathers, where are you? Where are we, as a society? What needed to happen to get us to this point? And I want all of us to look out for our children together, and I want to thank you as media. Because you have spoken up too, because you need to help us a lot with this, because we need everyone to come together.

We came from launching the program ‘Tejiendo Hogares.’ (Sewing homes) Because today, this social decay has an origin, and it is the homes. And it’s time to invest not only in the front facade, but also the one inside. We need to restore the families; we need to restore the values. And let’s not keep the discussion as a country about left, right or center-wings, that’s useless. Ideologies divide, values unite. And, at least in this case, the youth should be the ones to unite us as a society. Let’s fight together. Political and social sectors, we may be different, but that does not contribute anything. We can have different ideas. But this is a battle we all need to fight.

What you have seen, and what society has seen surrounding a few chats, which have been of public knowledge, of these degenerates, like I’ve said, is just the tip of the iceberg. It is sad to see what we have come to as a society. It hurts. That’s why as a municipality and as administration, and like I’ve said, I am fighting this battle with the tools I have as Medellín’s mayor, but with the conviction of a citizen and a family man. And I know that is how my General is doing it too, I know that is how Manuel does it as Secretary of Security, and I know that all of you, who are with us today, from the media, who are also parents, uncles, aunts, grandparents, will help us fight that battle. And may those who are listening or watching us, also be convinced that this is a fight for all of us as a society.

I want to thank my General, Lamprea; our national police…Greetings to General Salamanca; to Colonel Cubides, director of DIPRO, who is also at the head of these operations; to the US ambassador, Francisco Palmieri, thank you for the commitment; to all the directors of the intelligence and justice agencies from the United States, which are connected to this inter-agency work. Thank you. With timely and quick action, a lot of abuse against the children of our city was avoided. And this is just the beginning. This is a battle that is just beginning. But do me a favor, let’s not pretend, or let them say, that this only happens in Medellín. No. This happens all over the world. The big difference is that here we hit a nerve and we do not tolerate the sexual exploitation of children and teenagers.

I will give the floor to my General, and, as I’ve said, this has just begun. This is an ongoing operation, there are many people involved, and we are not going to rest. And to anyone, as has already happened with many of these guys, or like the one who was not even able to board the plane, many people who intended or intend to come to Colombia, to our city, Medellín, to do that: know that you cannot come here to do that. And let it be spread all over the world that this is not allowed here, and it is a crime penalized with up to 25 years in prison in Colombia. Go ahead, General.

General Lamprea: Well, thank you so much Mr. Mayor for this recognition to our national police. We are the ones who have been working hand in hand with different international agencies in order to achieve these results. At the same time, in conjunction and with all the support from this administration. I want to refer to this capture of the American citizen that took place in Miami, for sexual exploitation of children and teenagers in the city of Medellín; a result of the institutional strategy of the National Police, which we called “PAIS”, where the protection of safe adolescence and childhood is always a priority. In coordination with, I insist, with the support of the administration and also the different international agencies that support us and with whom we are coordinated to achieve these results.

This is how the investigation of this citizen, of this capture, is carried out. Because in the frame of the investigation that we carry of Timothy Alan, we are getting these results. This investigation is starting to pay off. This is how on the 18th of this month of April, in the frame of ‘Operation Cazador’, as we have named it, at the Miami Airport, the arrest warrant of this forty-two-year-old American citizen was generated, who also has Ecuadorian citizenship. As required by the US justice, for the crimes of attempting to travel with the intention of taking part in illegal sexual activities; that is the offense he is being charged with in this country. In Colombia, he is being investigated as well for the crimes of child pornography and a lawsuit for sexual exploitation of an underage person.

It also became known that he had over 45 migratory entries to Colombia, with the city of Medellín as his destination. This person intended to travel from Miami to Medellín precisely, or directly. At this moment he is requested by the authorities here, where a computer and nine cellphones were found in his possession, which are now part of the chain of custody, and probably from where they collected important evidentiary material. With all of this, the film content, implicit sexual abuse of minors is evidenced. These elements will be provided through judicial assistance too, to our Attorney General’s Office here in Colombia, to identify and protect the victims, and prosecute those responsible. This person took responsibility for the offenses he is being charged with there, in this country,  of which he has been accused of, and he is under security measures in a prison at this moment, there in Miami.

In the Metropolitan Police of El Valle de Aburrá this year, other details of importance: The National police have captured 80 people for sexual crimes, among which there are 49 that have just been registered in Medellín. It’s also important to point out to all of you that amongst those captures we have also registered six American citizens who came for those practices and have been prosecuted too in different activities and operations in the framework of the strategy we have with the Administration, in all the metropolitan area, and specifically in Medellín.

This is how the National Police has this information, it’s important to note that thanks to that joint work, support, and coordination with these inter-agency agencies in the US, and all the support from the Municipality of Medellin, we have achieved these results. The investigations continue. Probably in this two-side investigation, which we have with the North American authorities, we will continue to provide significant results, both in that country and in Colombia. That’s the information we have on this case, thank you.

Federico: Thank you very much, everyone.

Media: Mayor, a little question.

Federico: Unfortunately I have a meeting with Metro with governance…

Media: Just one. What happened with the person he was communicating with? The pimp. (The Colombian woman who was finding and providing the children as prostitutes)

Federico: It’s part of the investigation. As we said, more captures are coming…

Media: And the families?

Federico: It’s been said.

Media: In this case, are you going to look into them?

Federico: It will all be part of the investigation and also of the social work we have been doing from the mayor’s office. Understand that this has a line of reserve. Thanks to the work the Police have been doing, along with the agencies of the US. It’s a very clear line. This is just the beginning. I want you to understand something. We got to this man thanks to the investigation of Timothy Alan. And from there, all that was just discovered, all the information the intelligence and justice agencies of the US share with the police. All that investigation also comes in addition to structural blocks of trafficking networks that were already being analyzed.

Media: Did he know Timothy? Did they have any…?

Federico: They had the contact already, it was through…

Media: Was it the same one?

Federico: The contact comes thanks to the forensic interviews that the police, the prosecution, and the international agencies do. Keep this in mind. I have already said it all, I will simply explain it a bit here. Remember this guy lives in Ohio. Timothy. There is something that’s called extraterritorial offenses, which is what my general was talking about when finishing the press conference. Those extraterritorial offenses…It does not matter where the crime is committed, even if it is outside the American territory. If they commit a crime for purposes of the sexual exploitation of children and teenagers, they will be held accountable to the same legislation. To get the evidence against Timothy in this two-sided investigation my General mentioned, and the evidence Colombia has… It was necessary for the investigators in Ohio to come here, to Medellín, for the interviews with the girls. That was already done, we were with them already. We have been putting all of that together; everything has been done directly with the ambassador, with the FBI director for the region, Homeland Security, HSI, ICE Agency, INL…which one am I missing? Customs. Look, this is the first time…I say this from experience, with many of you who I got to be with…When we were together at the municipality. We were in a fight against all those drug traffickers alongside the (US) Embassy.

Not even then there was as much articulation as now. When we were in a meeting with the ambassador and General, there was not a single agency absent at that table. And they were the coordinators not only for Colombia, but for the whole region. I mean…This has just begun. Keep that in mind. This is a network that will start to fall apart. There are American citizens, there are citizens of other nationalities, there are Colombians who have lent themselves to this. And what we need to protect the most is having a very clear identity of the children, because in the videos, as my General said, there is explicit content of sexual abuse against them, and we need to identify these children very carefully in order to establish their rights. So this has just begun. What we wanted to make very clear is where this is headed and where it starts from. Remember one of the strategies with the US government is to ask for all the databases they have on pimps, pedophiles, people who sexually abuse, so they can’t even get on a plane from there. That they can’t get on it is already part of the result of the request. This…Understand my General has to maintain some reservations about that too.

Media: The General cannot say on camera all that about the interviews they came to conduct here and how they found Timothy?

Federico: No, I have already said so. I have already explained. I have explained it fully. Look what is in there. What I am saying is, and all I have said and want you to understand, is that this is going to be part of a structural thing: everything’s there. I said it. How we moved things forward, how we worked together with American agencies, but directly coordinated with the Police, with my General. How the tracking and the interviews conducted by the police and the prosecution start, and the justice and the investigators who come from Ohio. They interview the children and that is why we were able to get to this guy. The one they captured in Miami.

Media: Did the other guys have any relation to any structures in Medellín, would they be sponsored…?

Federico: Let that be continued in the investigation. Let that continue, because all sorts of things are coming. But yes, there is a relation with people who have lent themselves to this. In many areas of the city. The pimps.

Media: Mayor, do you know what this guy did in the US? For work?

Federico: I don’t know if you want to answer anything else, I think that’s everything…

Lamprea: Yes, well, let’s say, contextualizing a little bit what the Mayor was saying, it is important to to point out too that as a result of all that was done: the prevention part, control, dissuasion, the investigative part; all this coordination we have done. Even what we did a few days ago with the Mayor at the Rionegro airport. A preventive strategy was launched there. There we are joined by INTERPOL. We are there with them, and working alongside Migración Colombia, where they are already managing a series of databases to start not only identifying them since they leave from different countries, but also when they get here, to Colombia, and precisely to Medellín. This person’s profile…He’s a pharmacist that was there and worked at that directly in the US. Well, that’s as far as the context of the investigation. I do not know any precise details at the moment, because that part is for the investigators, and what we have just said is what we can say, in accordance with what the head investigators have expressed. That is it.

Media: By the way, General, or Mayor; have the American investigators found the location, have they found Timothy Alan in Ohio? Because in an interview on Univision, the family was saying they did not know this North American’s whereabouts.

Lamprea: What we know so far is that he has already been identified, they already know where he is and he is already taking part in this investigation. They are doing the various controls to this person.

Federico: Thank you very much everyone.

While prostitution without intermediaries is legal in otherwise socially conservative Colombia, Medellín in particular has seen a rise in sex tourism, angering many locals. On the other hand, engaging in sexual activity with a minor is a serious crime in Colombia.

Monday, Mayor Gutierrez used his emergency powers to outlaw prostitution effective immediately in Medellín’s El Poblado sector, including the Parque Lleras and Provenza neighborhood popular with tourists. Emergency measures are effective for six months. The mayor also restricted bars, restaurants, and nightclubs to a 1 am closing time.

This move comes after a curfew measure for minors, still in effect, that the mayor enacted at the end of January in several commercial districts of the city where nightlife is a major component.

“We have to recover these spaces that crime has been taking over, ‘deconfusing’ these areas of the city and putting our women and especially our girls, boys, and adolescents at risk. The work of our mayor’s office will continue there, every day, 24 hours a day, and with all our support,” said Gutiérrez, who explained that this sex trafficking is controlled by the La Terraza, La Raya, and Robledo mafias active in Medellín.

Dominick Divencenzo is facing charges of sexually exploiting minors.

“Here, we need everyone’s commitment, understanding that this is a situation that has hit rock bottom. We did not come here to hide problems. We came to recognize them. There is a serious, difficult situation. I said it from my first day in office. Some measures have been taken and these are other exceptional ones,” said Gutierrez.

Earlier last month, two American citizens were arrested in Medellin in operations coordinated between Colombian police and the US Department of Homeland Security, both for the sexual exploitation of minors. Then, last week, due to a tip from a concerned neighbor, 36-year-old Timothy Alan Livingston was detained when he was caught in a luxury guest house with two girls, aged 12 and 13.

36-year-old Timothy Alan Livingston was detained when he was caught in a luxury guest house with two girls, aged 12 and 13.

Sources explain to Finance Colombia that Livingston was released after initial detention because there was not enough evidence to immediately charge him with a crime (Habeas Corpus), in other words, they were not able to immediately establish that he had engaged in sex acts with the children, who had been taken into custody after the incident by the child welfare authorities. Though still under criminal investigation, Livingston immediately fled to Florida, though Colombia has an extradition treaty with the United States, and the United States has demonstrated willingness to extradite US citizens to Colombia to face justice.

The Colombian police temporarily sealed the luxury guest house, called “Gotham” and located in Medellín’s upscale Poblado area in the Parque Lleras neighborhood. The closure lasts for 10 days pending additional legal sanctions. The mayor has called for “Extinción de Dominio” (similar to asset forfeiture in the United States), which is when the government seizes property used or paid for by criminal activity.

Gotham is not a hotel but a guest residence with five units, marketed through Airbnb. When contacted by Finance Colombia, the management company that actually owns the building shared this statement (translated by Finance Colombia):

We categorically repudiate any form of sexual exploitation of boys, girls and teenagers. We do this not only as responsible tourism actors in the city of Medellín, but also in our condition as fathers, mothers, daughters and sons. The exploitation of minors is aberrant and since the beginning of our company we have been committed to combating and preventing it. Our team is made up of 17 women, administrators of properties, that we have worked for the protection of the rights of women, children and adolescents from Colombia.

In recent years we have met with authorities on countless occasions, including the National Police and the Mayor’s Office of Medellín, to address traffic prevention strategies, sexual violence, drug trafficking and other phenomena that affect the safety of visitors and citizens and the integrity of our children. We have actively participated in the Intersectoral Roundtable and Interinstitutional Prostitution of the Mayor’s Office of Medellín to contribute to combating exploitation of minors in accommodation and lodging establishments.

All reservations in this tourist home are made through Airbnb. On this platform We require that users, whose identity is previously verified, expressly accept our policies against sex tourism, child exploitation and drug consumption before reserving the property. In addition to the above, as hotel operators, we have implemented policies and even more robust practices to guarantee security in tourist housing. In all the public spaces of the building we have installed security cameras, we keep strict records of guests, we implemented security procedures at the reception desk and even train periodically and in a documented manner, all our staff against child exploitation.

We are committed to implementing stronger security measures than usual in properties that are reserved through digital platforms. Despite our best efforts, a foreigner, who has been identified by the authorities, Timothy Alan Livingston, circumvented and violated our security schemes.

On the night of March 27, 2024, Mr. Livingston tried to enter with two companions who were carrying identification as adults. However, the security guard prohibited their entry suspecting that they could be minors. The building’s security cameras show that Livingston would have returned to the building and entered illegally in the early morning of March 28, when the night security guard’s shift had already ended.

Thanks to the complaint of a neighbor, the National Police was alerted to the situation and since then our entire team has been actively collaborating with the ongoing investigation. We are currently collaborating, and will continue to actively collaborate with the authorities, including the National Police and the Attorney General’s Office, to facilitate and expedite their investigations with the aim of prosecuting those responsible for this aberrant event.

We join the calls for justice to be done and we will continue to work closely with the local and foreign authorities to provide all information that allows identification, arrest and prosecute those responsible. As responsible tourism actors we are also affected by this case that harms many hotel properties and forces us not to neglect security for even a minute.

Our country has deep social problems. Just between January and August 2023, there were 8,295 sexual crimes against minors, according to data provided by the Attorney General’s Office. Our commitment is to promote quality tourism and that is why we have actively participated with the authorities, and with industry associations such as Fenalco and Cotelco, for many years to combat the scourge of child exploitation. We are horrified by the events that occurred, and in light of this phenomenon, given that we are also mothers and fathers with small children. We are concerned citizens who want justice to be done and a sustainable long-term tourism strategy implemented in the city of Medellín for the benefit of society and without crime or immorality.

We are with all Medellin and Colombian [citizens] during this painful process.

One of my best friends for many years was a Cuban fellow named Miguel Cárdenas who left the island much later than the Mariel boatlift, and somehow ended up in Ohio. At first he did very well for himself, but eventually got in trouble and lost his US residency privileges and was returned to Cuba. I was able to talk to him a couple of times after he was back in Cuba, but also stayed in touch with his family.

Once I visited Miguel when he was in Cali (long before I lived in Colombia) where his sister, an official in the Cuban government, was allowed to travel. At the time, a rendezvous in a third country was the only way they could meet. His sister, who had achieved a prominent position in the agriculture ministry, eventually left and resettled in Miami. She now tells me that her quality of life working at Walmart in Miami is much better than when she was a government bureaucrat in Havana. Because of her position, she was one of the first Cubans allowed to have an internet connection and actually had a Facebook account before everyday Cubans even had internet.

After Miguel was back in Cuba, he got in an auto accident, and was in pretty bad shape. This was around 2011. I remember getting a call from his sister (she was still in Cuba). Miguel was in the hospital, but there was no medicine, no bandages, no supplies, and and she asked me to find these items in the US and send them to her in Cuba for his treatment. What many people don’t realize is that medicines and food can be sent to Cuba from the United States, and that in any case, the US trade embargo does not prevent commerce in medical goods-or any products from any other countries. Cuban hospitals, like Cuban grocery stores are empty because their totalitarian, communist system is a failure.

My friend died shortly after I spoke to his sister, before I was able to ship medical supplies for his treatment. The “revolucionario” Cuban medical system cannot provide basic supplies; not because of any US embargo—remember during the COVID pandemic, all the supplies were coming from China?—but because the Cuban economic, political and health systems are BANKRUPT.

“There is all the difference in the world between treating people equally and attempting to make them equal.”—F.A. Hayek

Is this Francia’s idea of “vivir sabroso?”

Colombia’s Vice President Francia Marquez was in Cuba last week, where she continued to trash Colombia’s health system and pour accolades on the Cuban system.

“We are proposing a health reform where it is once again administered by the State. Of course, this is not going to be easy because there is a very strong dispute. It is taking away the business of the elite and private sectors that have turned health into a commodity and not a fundamental right. The preventive health that you (Cubans) have maintained as a central axis is what we want to do in Colombia today,” said Vice President Márquez.

Francia Márquez en ?? dijo que estamos proponiendo una reforma a la salud donde el Estado recupere su manejo y que se le quite a las “élites”que se han enriquecido. Alaba el sistema cubano y busca que aprendamos de su experiencia.

Es una vergüenza. pic.twitter.com/jwrxzav5D0

— Ani Abello (@ANIABELLO_R) February 13, 2023

Colombia has a mix of public and private hospitals and clinics, with many doctors in private and specialty practice. Doctors have a choice of participating in public or private healthcare plans or participating in no plans at all. The vast majority of doctors participate in the country’s EPS system.

In Colombia, clinics, or points of care where patients are seen, are called IPS – Institución proveedor de Salud, or health providing institution, in English. Colombians with formal employment choose from a number of health plans, called EPS – Entidad proveedor de Salud, which serve as intermediaries. EPS plans may be private businesses, for example the insurance giant Sura, or they may be government owned, like the city of Bogotá’s Capital Salud. Some EPS systems are poorly managed, corrupt and insolvent, others are very well managed. Doctors and IPS facilities can choose to accept one or more EPS plans, or accept none. Most accept multiple EPS providers. Some EPS providers are notoriously slow payers.

Colombians below a certain income level also qualify for Sysben subsides designed to allow those of the lowest income levels to access the same health care benefits as the rest. Victims of auto accidents are also covered by mandatory SOAT insurance, which covers death, injury, lost wages, and physical therapy due to vehicular accidents.

Colombian President Gustavo Petro presents his proposal for reworking the Colombian health system (photo

Higher income Colombians may also pay cash for services, or purchase a private, prepaid medical plan that usually, but not always, sits atop an EPS plan. The government mandates that all employees and independent contractors participate in EPS. There is also a worker’s compensation system called ARL that covers workplace accidents.

Doctors generally make a good living in Colombia, though the pay is not exorbitant. You might see a typical doctor making between the equivalent of $40,000-$60,000 USD which in Colombia is quite a bit. Specialists and aesthetic surgeons can make quite a bit more, with owners of successful practices pulling in several hundred thousand dollars per year, but this is the tiny exception. In Cuba? $32 USD per month.

No health system is perfect. In the US, there is groundbreaking treatment, but heartbreaking prices. Canada and the UK claim to offer “free” health care, which of course is not free, but disguised through taxation, and patients often have to wait years suffering painful conditions before treatment. Treatment may also be rationed based on cost and staffing limitations.

In Colombia there are several inadequacies, but the biggest is an unequal availability of services based on geography. Bogotá, Medellín and Cali all boast world class hospitals, and many modern specialized treatment centers. MRI, CAT scans, even PET scans are available. Many foreigners come to Colombia for knee replacements, back surgery, and of course, cosmetic surgery. The cost of the entire procedure might be less than the co-pay plus deductible in the patient’s home country.

On the other hand, travel to rural regions of Colombia, or tertiary cities, and it is a different story. Not only is there a lack of facilities, but a lack of medical professionals, especially specialists. Add to this a high incidence of corruption in regional EPS providers and local governments. This stark inequality means that in the same country, one may receive world-class treatment, or practically no treatment at all based on a combination of one’s income and geography.

Meanwhile, there is no shortage of medicines or durable medical supplies. Pharmacies are plentiful and well stocked, and most medicines are affordable. The government maintains a list of critical medicines and has measures in place to assure that these critical medicines are available and affordable.

Marquez has been explicit in her desire to destroy the concept of healthcare as a business in Colombia. But fortunately, it is unlikely that she will ever get the chance. Grocery stores and pharmacies in Colombia are full, and there are mobile phones in every pocket in Colombia, because they are provisioned by businesses. Overall, Colombia has an excellent electrical grid compared to many other Latin American countries, and much of the electricity is provided by private businesses. Even the utilities like EPM or EEB that have government involvement are indirectly owned and must follow corporate government best practices. For example, petroleum giant Ecopetrol is between 80-90% owned by the Colombian government, but because a minority of shares are traded on the New York Stock Exchange (NYSE: EC), the company must behave as a corporate citizen and cannot be treated by the Colombian government as a sinecure for friends and cronies. Voluntarily trading on the NYSE, the company, its employees and directors are subject to US securities law.

The good news

Leftist President Gustavo Petro, formerly a militant guerilla, would surely love to have an entirely government-controlled health system—an entirely government controlled economy if his wishes came true—but fortunately Colombia has enough institutionalism to prevent a Venezuela-style usurpation, or Cuban style “revolución,” though groups like the FARC and ELN did try.

Petro wants to get some kind of reform passed, and that still may be difficult. However, the president has pledged via the country’s official presidential website that:

“Complementary plans, prepaid medicine or health policies will continue to function normally and will not be affected by the project.”

This is critical. And let us also be clear, one of President Petro’s stated objectives to provide an equal basic level of care throughout the country is a very good thing. This is something the country currently lacks. People in Tumaco or Catatumbo do not have the same access to healthcare as people in the south of Cali or the north of Bogotá. However, increasing the quantity of health care throughout the country, should not come at the expense of the quality of health care.

Colombia is in fact a very unequal country, and this inequality should be addressed by creating more opportunities, providing better, more universal education, and yes, challenging the pretty awful class hierarchy that exists in Colombian society. However, Friedrich August Von Hayek admonished us all that:

Even the striving for equality by means of a directed economy can result only in an officially enforced inequality—an authoritarian determination of the status of each individual in the new hierarchical order.

Headline photo: Vice President of Colombia, Francia Márquez Mina (left) with Cuban President Miguel Díaz Canel (Photo: Colombian Government) during her visit last week.

On the other hand, for legitimate medicinal purposes, the government has taken a much more progressive stance. Firms may obtain licenses for cultivation, processing, use, and export of cannabis derivatives for medical and therapeutic applications. A leader and innovator in this field is the company Khiron Life Sciences (OTCQX, TSX.V: KHRNF, TSX: KHRN, Frankfurt: A2JMZC), operating in Colombia but with legal headquarters in Canada and trading on Canadian and Frankfurt stock exchanges.

Like several other companies in Colombia, Khiron cultivates and processes cannabis at its agricultural facilities in Ibagué, Tolima (above). But Khiron takes the unique approach of launching and operating a chain of integrative medical clinics under its Zerenia brand, providing a broad range of medical treatment services that go far beyond cannabis products.

To understand this unique approach, Finance Colombia’s Executive Editor Loren Moss sat down with Khiron Co-Founder and CEO Álvaro Torres to discuss go-to-market strategy, cannabis in Colombia, and the company’s unique Zerenia Integrated Care clinics.

Finance Colombia: We’ve covered Khiron for a few years now, so it’s good to finally talk to you. It’s been fascinating to look at the progress of the company starting out and getting licenses, and now you’re opening clinics, so I really want to understand more about the company. If I understand the structure, it’s incorporated in Canada with operations here in Colombia. So rather than try to describe it, why don’t you give me a brief overview?

Álvaro Torres: Thank you Loren. Well, yes, at Khiron, we are a B2C focused company, that means that my main obsession is to improve the quality of life of people through the use of medical cannabis. That means that we’re not a B2B obsessed company, we’re not here to sell the cheapest cannabis possible in the world, we are here to actually bring our products into patients’ hands and to bring medical cannabis to the forefront in Colombia and Latin America.

Everything that we do is based on how close we can get to that patient when cultivating in Colombia, of course, with the low cost capabilities that we have here, but we go all the way from the seed to the clinic.

Khiron Life Sciences CEO Álvaro Torres with Finance Colombia Executive Editor Loren Moss on a Webex call.

We have our own network of clinics. We have opened one in Medellin in December; we’re opening five more in the next three weeks and hopefully 15 more by the end of this year. I believe that we have to drive that education, show people that it really works, building the evidence, doing things really quality; well done with good quality products, a lot of education and be able to reach as many places as possible. We’re fully integrated from the seed to the patient. We cultivate in Ibagué (Capital of Tolima Department, Colombia), and then we train our doctors, and we receive patients in our clinics.

That’s what we’ve done in Colombia, I would say that we have been very successful so far, [but we are] still a long way from where I want us to go, of course. But we’re taking that model across Latin America in Peru, in Mexico, Brazil and we are looking at similar models in Europe, where we are set to start sales in Germany and soon to start sales in the United Kingdom. And, it’s all Zerenia branded products, Zerenia branded clinics and that’s how we plan to grow our business.

We have our own network of clinics. We have opened one in Medellin in December; we’re opening five more in the next three weeks and hopefully 15 more by the end of this year.

So, we started selling in Colombia March 19 of last year, remember that President Ivan Duque closed the entire country on March 20, sort of a bittersweet moment because we were excited about being the first company in Colombia to sell medical cannabis, but then the next day everything is shut down, and, you know, it’s been tough to run a clinic in pandemic. I don’t have to explain to you because you have been here, but we have been growing 50% month to month, since then. With medical cannabis prescriptions, we just reached our 10,000th prescription in Colombia and just to give you the idea of what that means, in January we did almost half of what we did, in [all of] 2020.

So, the growth is happening because the more we go out there and tell people these stories of real patients, the more we talk about the clinic, we have more of these stories which are real stories out there, we have (Colombian commentator) Pirry, (soccer player) Iván René Valenciano, the more evidence we can show to the doctors, the more patients in Colombia are saying: “Well, you know, maybe this is not so bad,” and—you know, you’ve been, I don’t know, how long have you known Colombia?

Finance Colombia: I’ve known Colombia since 2004.

Álvaro Torres: Okay, so, you’ve seen the very exciting times the last eight years, I’ve been living here all my life, except when I went to school and for a country like ours, you know, where marijuana and drugs have been such a terrible part of our past, to have faces are saying, “you know, what I’m gonna try this because I’m sick of opiates,” and the fact that we are leading that conversation because we’ve been focused solely on that from the beginning, that’s why we’re having all this growth.

Khiron expects its network of Zerenia integrative care clinics to reach 15 by the end of 2021.

I mean we saw a hundred-year-old patient—I’m not kidding!—A hundred years old with arthritis, on Saturday! A year ago I would have never even dreamed that a woman of a hundred years old would be going to a clinic to get cannabis for her muscles and her joints! Also, stories are catching on because people are starting to understand the benefits. I’m not shy to say that Khiron, since we started, we’ve been advocates of that from the beginning, and we’re in a very exciting market because, I don’t know if you know, on December first the Colombian government declared that medical cannabis was now going to be reversed, so in Colombia today as we speak any patient in Colombia that needs medical cannabis has it covered by the national system.

Finance Colombia: Okay, by the EPS (Colombian health plans) and all those systems, right?

Álvaro Torres: It’s called the MIPRES, which is a direct reimbursement from the government to the insurance companies, to the EPS because, when we started in December 1 of last year with that, the amount of people that now are able to access this medication, which if done responsibly, can provide your benefits. It’s great, so that’s what we have been doing  from the beginning, it’s always been our story and now we are let’s say, doubling down on the expansion of our clinics because we know how to treat patients, and we do it ethically because, of course, no doctor in our company is ever going to give a prescription to a patient that doesn’t need it but we do understand the management, we have benefits of medical cannabis with chronic pain and depression, epilepsy, and it’s been a very interesting ride right considering we are in the middle of a pandemic still now, so I can only imagine what we can do after these emergency sanitary restrictions end. But it’s very exciting Loren, for me and for everybody here in the company.

Finance Colombia: So, I don’t know a lot about cannabis, help me understand. Because you hear some people talk about CBD and then there’s the natural plant and then there’s I would imagine, other derivatives. You guys are focused on therapeutics, you have treatment centers now, and I think one unique thing about your business model is that like you said, you go from growing the product to also having the medical clinics as well. But help me understand what happens when the patient goes to the clinic, and what are your products? Are they these things that we hear about called CBD? Is it something that people smoke? is it an injection?

Álvaro Torres: Just to give you some background, in Colombia today the regulation allows medical cannabis and only in the form of extracts, ok? So, there is no flower market, legally at least.

I think the reason why the government did that, and we’re very open about it, I’m particularly very vocal about that, I think that was smart on behalf of the government to try to separate this illegal business of marijuana from the medical cannabis, even though it’s the same plant. We talk about cannabis today in Colombia there’s a clear distinction from marijuana, associated with illegal shipments, rock lords and medical cannabis which is more of a pharmaceutical type of quality.

Also now, of course, the cannabis plant has more than 150 molecules, the most well-known are CBD and THC. For the people who are not initiated in this industry I would say that you can use CBD for neurological issues such as epilepsy and abnormal movements just to give you examples.  And THC would be mostly focused on chronic pain. This is 101 level, of course, you know, anybody who’s listening and knows more about cannabis can say “you’re being very simple,” but then on the spectrum of those there’s a combination of THC one-to-ones that the doctors prescribe depending on the condition of the patient, the age group, what side effects, right?

But if we look at those two that would be chronic pain THC, which is the psychoactive part of the plant and then CBD that’s very used, at least is mostly known for neurological issues.

I’ll give you my own example: I take CBD every night to go to sleep. As you can imagine, being CEO of this company (laughs)…so I take it to sleep. CBD is a non-psychoactive substance, but of course, there are also patients that have different conditions and can use THC to sleep. My wife for instance, uses a one-to-one mix of THC and CBD, so that tells you also that there’s a lot of uses that it’s really up to the doctor to really be well trained in this, and to give you a variety of options.

I’m telling you about the iPhone One, right? We’re not even going to the five cameras or ten different colors (laughs). But this is what the products would be mostly used for and in Colombia, just Colombia alone there are 6 million people with the prevalence of chronic pain, epilepsy, anxiety, depression, and sleep disorders. Today the only alternatives are either surgeries or very heavy opioids. You may or may not know, of course, the world is now turning against opiates, and the big issues that those type of medications have on addiction.

Finance Colombia: I’m from Ohio, and, you know, it’s a terrible…it’s worse than the crack epidemic in the 1990s! I mean our whole cities, and the countryside is devastated by people who get hooked on opiates: Oxycontin, Fentanyl, and all of these other different kinds of drugs, I don’t even know what they’re called. They seem to be terribly addictive and then when they try to get off, people can die from withdrawal symptoms.

Álvaro Torres: Medical cannabis offers a different alternative, it’s a plant that has been in the most negative news of the last 100 years, I’m sure you will appreciate this particularly: this all comes from the United States in the 1915 to the 1920s, and it had nothing to do when it was legalized, it had nothing to do with the plant, it had to do with, you know, unfortunate racial issues, and were, you know…

A Khiron agricultural technician in their Ibagué, Tolima facilities.

Finance Colombia: Yes, anti-Latino, anti-Mexican.

Álvaro Torres: anti-Latino, anti-Mexican, anti-black, because, you know, for these white folks back then it was these are these communities are using marijuana therefore, “stay away from my daughter!” And if you look at the first advertising of those famous movies like Reefer Madness and you look at those posters, it’s extremely bigoted.

Finance Colombia: They still persecute Native Americans because of peyote.

Álvaro Torres: Yeah, exactly.

Finance Colombia: Even to this day.

Álvaro Torres: That came all the way to all our countries, right? And we all have a negative feeling about marijuana, but in the end it’s a plant that’s been around for a thousand years.

Finance Colombia: And the government, some governments like the US, and I’m sure other countries as well, will pressure other governments, and say “we want you to make it illegal” and the other government says “well we don’t want to make it illegal,” they say “well you better make it illegal or you’re going to have problems!”  It’s a fascinating to me how in Jamaica it is technically illegal. I remember when Uruguay said, when Mujica was the president, he said: “we’re going to make it legal” and there was such a scandal!

But Uruguay is still going very well. Everybody is not an advocate, it seems like their problems that they have, now it’s more peaceful than it used to be, but I remember in the US it was a tremendous scandal, then President José Mujica came, and he met with, I think Obama was the president at the time, it was about eight years ago, and that was a big scandal. I remember that there were some maybe diplomatic influences in the US that wanted to try to pressure or punish Uruguay, luckily, they didn’t. I think that that would have been very unjust.

But I remember, I think it was at least the first country in our hemisphere and one of the first countries globally and they said, “look we’re not going to prosecute people for this anymore,” and so far,—I haven’t followed closely—but so far it seems to have worked out.

Álvaro Torres: Well, it’s all progress, I think. The last government of Colombia (of President Juan Manuel Santos) made a really huge step by legalizing it, putting it into law. This government today I would say that even though it’s of course a little bit more conservative, the fact that this government is including cannabis as a medication that now can be covered by the insurance system, that’s an even bigger step. So conservative, liberal, whatever you are, there’s no denying that this is a plant that’s been demonized for too long, that there’s a lot of fear, of course. We have to do a lot of education, and there’s a lot of benefits for patients.

Now, of course, I told you Loren, my business is not on the B2B side, so I’m not in the business of exporting this to the rest of the world. I think it’s going to be a good opportunity also for companies in Medellin, there are a lot of companies there that are looking at that strategy. And, of course, Colombia does have a lot of advantages for that, but for me the most exciting part of this is to be able to change the life of people like Ivan Rene Valenciana for instance. Los Infomantes was telling everybody, that he was suffering from addiction to sleeping pills and then he took cannabis! And they used to listen to that story, and the fact that it’s in our clinic, that it’s our product, that we’re bringing, that  just gets me very excited, and I think that’s where the future of this industry in Colombia is going to go, I think there’s going to be a B2B business, of course, but we’re also developing like—I think about Zerenia, it’s the biggest cannabis clinic in Latin America, it can be; and it’s in Colombia, right? I mean of course my company trades in the Toronto stock exchange.

A year ago I would have never even dreamed that a woman of a hundred years old would be going to a clinic to get cannabis for her muscles and her joints! Also, stories are catching on because people are starting to understand the benefits.

I’m the co-founder of the company, I’m the CEO, I’m based in Colombia, but it’s a Colombian-led team and companies like ours and other companies in this country that are taking the huge whole debt to be able to export value-added in a country that’s known regarding drugs as a difficult place to do business, and I think that’s very exciting and the more patients we can have, the more clinics we can open, the more data that we’re developing, the more products we can develop, I think that’s when Colombia is going to start looking like a clear leader at least in Latin America. And on the other side there are going to be the B2B businesses that want to export to the rest of the world, and there are some companies that have got to focus on building demand, or they’re going to focus on building the supply. I think Colombia can do both, so you can understand why particularly today even with a bit of pandemic things: you know, “the sky is falling” and all of that, I’m very positive because we’re seeing it every day.

Finance Colombia: You guys have made some moves, I think your ticker symbol is KHRNF, is that correct?

Álvaro Torres: Yeah, so we are trading the TSXV and the OTC as KHRNF, and on the Toronto stock exchange KHRN. We also trade in Frankfurt, but that’s day market trading. Most of our shareholders are Canadian and American. It’s incredible how many more US retail investors are catching on to the story. Of course, everybody is excited about cannabis now because of what’s happened in the US, you know.

And the big operators are doing tremendous business, I think that’s all really good, I was talking today to somebody telling them: “Listen, Florida which is one of the hottest markets right now, Florida started in 2017, and I feel that Latin America is at where Florida was four years ago, except with a population that’s 20 times higher, right?” So wouldn’t you like to be investing in Florida four years ago, and see it up to date? So I think that’s what’s happening here because you look at the biggest countries in Latam, right? Mexico already is in a great regulatory place, Brazil has already registered products, Peru is already selling, Colombia is far ahead, Argentina, Uruguay…

So you take these populations. Colombia got it done nine months after we started, it’s not a question of what is going to happen, it is going to happen, every country in Latin America is going to have this insured, why? Because one of the biggest costs to our health care system is imported medications and if I tell you that the biggest prevailing condition all across LatAm is chronic pain, and you and I know that the biggest medication of chronic pain opiate-based medication. It costs the governments a lot of money, and then you can offer a better alternative, that’s even better homemade, because it’s just going to be a matter of time.

But if Colombia did it, there’s no reason why the rest can’t. It’s a very exciting time to look about Latin America, and the best way is that while everybody is focused on the US that’s just leaving a field wide open. So for companies like ours, we can keep growing this region while everybody’s paying attention to the US, and if legalization happens hopefully sooner than later, that’s just going to open a whole new can of good worms in this region. You said it yourself, the only reason all these countries didn’t do it before is because in the US it was very illegal, because all the banks have a US correspondent in New York.

Imagine when that happens you’re talking about insurance, about banking, you’re talking about Facebook, WhatsApp, all of these things opening up to this industry! That’s actually helping our drive, so I may sometimes sound a little bit over enthusiastic but, you know? For what my company and I have experienced the last nine months…legalization and no COVID? that would be huge!

Finance Colombia: So, help me understand your business model. You’re opening clinics and people who are suffering from chronic pain would say “The Tylenol is not working for me…” Let me not try to guess. Tell me your go-to-market strategy. How are you selling the product? How are you distributing the product? You guys grow the product yourself? You guys process it yourself? You have your clinics, but I think you have other supply chain alternatives or other distribution methods? Where do consumers purchase Khiron products?

Álvaro Torres: First of all, let’s go from the consumer backwards. Any patient that is today on the radio, on TV, in news media, in Medellin today seeing, “well there’s a clinic there that has medical cannabis that’s going to be treating pain arthritis all of these things,” the patient gets an appointment at the clinic, the doctor decides on his or her own free, will: “is this a patient that’s that could be suitable for cannabis?”

If that patient is suitable for cannabis, that patient gets a prescription that day, the patient has two alternatives: either they pay for the medication right away or we work on the insurance program, so we can get the product paid for by the government.

Khiron laboratory processing apparatus

In a way that happens almost in the same day. That order goes back to Khiron. On the other hand, we cultivate cannabis, we extract it, and we send all that extract to a lab that’s certified by INVIMA. Every day we produce that order from anywhere in Colombia, because that patient either is physically in Medellín, or is using their cell phone to get on our Doctor Zerenia app so we have patients in Leticia, and we have patients all across Colombia. Some of them go physically, some of them go online and that order gets fulfilled every day. That patient at the same day decides when the doctor gives the prescription if they want that medication delivered at home or they want to pick it up. 95% of the patients decide on home delivery so within the next day that patient gets this medication delivered at home.

If you are in a in a city that’s far away, it may take you maybe one more day. Six days after you take this medication, the clinic is calling up to follow up on that patient. That’s very important: “are you doing okay? Is the dosage working? How can we help you?” The patient reschedules their appointment over the next two months and so on and so forth.

So we produce, we cultivate cannabis all day, we produce it, but we make these units almost every day, and it’s done through the formulations. That’s what we do in our clinics, that’s why we’re expanding them and just to give you an idea, you know, we’re producing almost today 200 new prescriptions a day. When I started the team back in March, it was eight in the first month, so it’s going very fast now. We also have big partnerships with external clinics, so we do the same process. So you go Loren, to your nearby clinic that has an agreement with Khiron; all those doctors have been trained by us in medical cannabis. So you go there they say: “well you may be out of cannabis,” and it’s the same process. And Khiron would be calling the patient just to do the follow-up, and you get the delivery at home. So it’s the entire purpose of what we do is critical to delivering the service to the patient, if you are 75 years old and you have your arthritis, we don’t want you to walk around for two hours to go back and say here’s my medication. Everything we do is about service,

The government of Colombia just recently issued a new decree that’s going to allow us to be able to have these medications delivered by any drugstore or pharmacy, which will make life a lot easier. Because in some cases the patients will say: “yes I want home delivery,” some cases they want to say “no, I want to pick it up at the Drogueria La Rebaja nearby.” So if you look at the biggest, the most challenging part of our business it’s not the production of cannabis, it’s the service, it’s the customer service, how you are doing the appointments, the home delivery and that’s our go-to-market in Colombia.

Therefore, we’re talking about the business of Khiron. I’m not telling you that our business is to sell units, the research is to improve that quality of life and that includes the products, and the service. So why do we do that? Because this is such a new notable thing. A lot of it’s called handholding.” A patient takes a medication like this and they may easily fear or discontinue it because there’s a lot of fear, yes? So you need to be there, you need to show them if you want another appointment, we can have it. How are you taking it? Is the dosage correct? And that level of service is making us grow. It’s not just the quality of the product, which is great and consistent.  How do we work with the patient? That path of changing medication and looking at an alternative. So that is our go-to-market strategy, and that’s what I want to do. We’re talking about in every country in Latin America.

Finance Colombia: So, you guys have clinics now in several cities, and it’s being integrated into the Colombian health system. I know that you guys did a pilot with SURA EPS, there are other, different modalities. It looks like you’re on the verge of being able to be distributed in pharmacies, have you seen any attention or any interest from…I talked to somebody yesterday, I met with somebody, a couple from the United States, and the first time they came to Colombia was to get a medical procedure done and they looked around and they said: “it’s great down here!” And they stayed.

So, they live here because they came here to get an operation because it was less expensive than in the US. Are you seeing that kind of interest? Are you seeing it from foreign patients, or are there any regulatory obstacles to treating foreign patients? Maybe there are regulatory problems in their own country or how easy or difficult that is to deal with here in Colombia?

Álvaro Torres: Well, the medical tourism industry in Colombia has been growing by more than double digits every year in the last five years. Even ourselves in our clinic we see patients from the Netherlands, who come all the way from Aruba to get procedures done here, because in our clinic not only do we do medical cannabis, we also do neurosurgeries that are very specialized. So today in our company we actually have patients even during the pandemic, patients from Aruba that have…Netherlands citizens to come here, and I think the next stage of that, I think there’s a huge opportunity for that here because as, you know, lower costs great service, we have a great sense of service in this country, which is not something that you get to see everywhere else.

That service, the costs, the cost of living, the availability of flights, and then you can add on top of that entire medical cannabis treatment regimen in a country where it’s fully legal. So I think probably the industry has grown a lot, I think there’s another opportunity to couple medical cannabis with that medical tourism. That’s happening already in Colombia.

I think the B2B business may be great, but it’s also a business that it’s eventually a race to zero because everybody wants to sell the cheapest product possible or hold as many people as possible. And we haven’t even seen what the Mexicans are going to do, what the Brazilians are going to do in terms of cultivation.

I think everybody, most people who are abroad start to see Colombia [delivering] the level of that high quality care that we do have, for example the level of surgery of New York City is not necessarily done everywhere else in the world, and the more medical cannabis becomes more mainstream, there are going to be opportunities to attract tourists, attract patients from the US who have to wait 60 days to get a surgery, because we have the [resources] here, and then you can add onto that medical cannabis in some conditions.

I think you are forecasting it well, that’s going to happen. It’s already happening, except now we will add medical cannabis to it. It’s happening in Cali, Medellin, the number of clinics and high-level hospitals and the people in these countries, that’s amazing.

Finance Colombia: You’re in the process of opening clinics. Where are your clinics now?

Álvaro Torres: We have three clinics in Bogota. Big health centers, more than 14,000 square feet, we have one in the north and Carrera 19 & 106, we have one in Country [neighborhood] at 84 & 15, in Parkway which is Teusaquillo, that’s closer to downtown. We open our new satellite clinic in Medellin in the Ophthalmology Center, and we are opening the next 4-5 in Barranquilla, Cali, Bucaramanga, Pereira, Villavicencio, and all these are cities that have more than 500,000 people and the plan is to be able to do all of that within the next seven months.

Finance Colombia: Great, So, how big is the company? Now you raised something like $13 million dollars a few years ago. Tell me about the staff, how many acres or hectares are you growing? You have I think four clinics, now you’re opening more.

Álvaro Torres: So, we’ve raised—we went public in the TSX.V about three years ago. We’ve raised close to $120 million CAD since we started. Today, last year December we closed around $20 million dollars. Our cash burn has been reduced significantly now that we’re increasing our sales, and we have almost no debt. and the only outstanding credit that we have is about $2.5 million on a lease-back because we acquired these clinics when we started in Colombia.

And when it comes down to our production, we spent close to $12 million dollars on a production facility which is not very big compared to what you may be used to. It’s basically one greenhouse of 85,000 square feet and one GMP compliant laboratory for extraction and quality analysis, that’s about say 500 square feet. The rest is the quality control…We can produce up to 10 tons of medical cannabis per year. It’s not the biggest number you will hear in Colombia, there are companies here that are doing 100 hectares (247 acres).

But the way I think about things—I’m an engineer by training—first comes demand and then supply. So, as we keep building our clinics, and growing that demand, we will keep expanding our facilities. But you know, our current needs for this year are met with what we have. If we sell all of the product that we can produce in our facility, that would be close to $80 million dollars of revenue, so I welcome the day when I have to expand it, you know what I mean? And that’s where and what we have been doing with our capital. The construction facility the acquisition of the clinics, all the marketing and training that we have to do to get to this. The expansion into countries like Peru, Mexico, Brazil and Germany which—and the UK, which we are launching very soon. And I think this year we are on the verge of exploding those sales. We started nine months ago in a market that’s really just starting.

We have a what’s called a tight capital structure. We are more than 15% inside owners. I represent the largest shareholder in the company, I haven’t sold a cent of stock. I think everybody in this company is really committed, it’s been four years, but we are just really starting in terms of the market, so the opportunity is very big. I think what we are building something really unique, because this is not just about a business model, it’s about the DNA of the company. It is focused on improving the quality of life of patients and that is a very different way of thinking about cannabis, than just trying to sell product as cheaply as possible.

I think the B2B business may be great, but it’s also a business that it’s eventually a race to zero because everybody wants to sell the cheapest product possible or hold as many people as possible. And we haven’t even seen what the Mexicans are going to do, what the Brazilians are going to do in terms of cultivation. So I think that that low cost cultivation that we can enjoy should be to our advantage. So we’re going to keep selling these units for fifty dollars and it cost four dollars to make, what do we do with that profit? we have to reinvest it back in the service, so we can keep getting that value out and thinking about demand is a lot more sustainable thinking about grams, so I always keep saying, you know, the focus of the companies are brands not grams, because brands win.

You know, anybody can grow grams, so that is in a nutshell what we have done, you know, we are very tight with our cash, mostly used now for the marketing and expansion of the clinics.  we are in a situation right now where we have enjoyed great growth. All of cash has been raised on equity, so no converts, no funny things like that. And I think that puts us in a very unique position. It’s all about finding liquidity, it’s all about finding new investors that want to believe in what this industry is going to do. And you know, we are trading around…historically cannabis has been in the last four years on a wild run, everybody started with Canada and Canadian cannabis was the hottest thing ever. Then, you know, the companies they are not performing as they should be. Now it is the US. I think right now with the Biden election there is a lot of enthusiasm for medical cannabis, but beside that, we have to think about longevity of business models, and if you look at the successful business policy in the US, it’s all about vertical integration of brands. Because that’s what’s going to remain, anybody can cultivate cannabis and everybody who’s in the business always want to make it cheaper, so this is not going to be about cultivating thousands of hectares of supply, it’s going to be who’s able to sell that and create that loyalty with the patient or that consumer.

Finance Colombia: That brings up a question, so, with branding you decided to name the clinic Zerenia, Khiron is the product? Is that? Because Zerenia will be spun off or is going to offer other products, or why are there two separate brands there? Or maybe they’re not two separate brands maybe, I don’t understand, maybe you could tell me the strategy.

Álvaro Torres: It is two separate brands because Khiron…let’s say this product, this is a medical cannabis product [holds up a product], I mean this is an empty box but Zerenia is about healthcare.

Khiron laboratory facilities in Tolima, Ibagué

If a patient goes into the clinic that patient is not necessarily going to get medical cannabis because, remember that our objective is to improve the quality of life. I mean cannabis cannot become something that if you have a headache: “cannabis!” If you, you know, if you’re–. If you want to paint the color red: “cannabis!” So in terms of brand structure, of the company, we have to understand that even though Khiron is a cannabis company, our clinics are not medical cannabis clinics. If you look at what says here. It’s “Zerenia integrative care management with medical cannabis.”

So, when we’re talking about regulations, we talk about clinics, we talk about products, there’s a difference between a product and a brand, and a clinic. Of course, every patient that needs medical cannabis gets a Khiron product, so we build that brand on the product with them that way. But also remember that in Colombia most of Latin America, Khiron as a company, we cannot talk to the patient directly.

If you look today at LinkedIn, you will see that Khiron makes no advertisements of the product, zero. But Zerenia does not advertise Khiron, what Zerenia does is we advertise that medical cannabis is good for you.

That’s why we did that split, and it eventually also means that if a patient goes to a clinic and needs absolutely an analgesic that patient will get an analgesic. Because of course, it’s in our interest to bring medical cannabis into the conversation, the first priority has to be the patient’s health. It’s just that we believe that medical cannabis is an alternative, this is why we grow it. We don’t grow it because we force people to prescribe it, we grow because we keep showing evidence and doctors believe it by themselves, so that is the difference, of course. And Khiron, even the name of the company…we came up with the name because Khiron was the centaur that taught Hercules medicine in ancient mythology, and in ancient mythology, it was the patron saint of pharmacists. That’s where the name of our company comes from because for us from the beginning it’s got to be about that care of patients.

We didn’t want to name the company cannabis anything or marijuana anything because also remember that all the cultural shocks that we have with Colombia and Latin America about marijuana and cannabis, we want to stay away from that. So that’s how that works, Loren.

Finance Colombia: You mentioned that you’re an engineer by background, you’re not a doctor. Why on earth did you decide you had to go through all these regulatory hoops? Colombia has—for a long time, marijuana or cannabis has not been legal. It’s very recent, you had some early successes a few years ago, I know when we first started covering you as far as getting some regulatory authorizations getting quotas, I know Colombia gets a quota from the United Nations, and then you guys got a very significant part of that quota. But how do you go from being an engineer to say: “I want to go into pharmaceuticals and health?” An engineer would go “according to my calculations that’s a big headache!”

Álvaro Torres: Well, you know, engineers also decided they wanted to go to the moon, right? I think engineering is about problem solving at its core, right? So the more problems you have, the more excited you get. But in my personal story, yes, I’ve been in engineering all my life. I built very large projects here in Colombia and Latin America. I worked in very famous engineering firms and my own engineering firms, and such. When Colombia legalized medical cannabis five years ago, it just came to us, and with my partners, we said, “you know, there are very few times in our life that we get to do something that is really unique,” and if you have that entrepreneur mind, you’re always going to be excited about that possibility. Of course, if we had known all of the issues, you may not even get into that right?

But you get on a path and you’re thinking, I mean listen: if the business was B2B I would probably have a tenth of the headaches that I have today because our business is on care and service. That makes it a little more challenging, but, even as an engineer you think about all these problems, you think about the end solution, how you’re going to get there and you assemble that thing! Because remember, engineering is all about teamwork, because no one person knows the answer in particular. Because out of all the engineers, I’m an industrial engineer, so that means I know nothing! (laughs) And so you start getting a really good team of people who want to share your passion, and then on March 20, you show everybody the first video of a patient that is telling everybody: “thank you because what you’ve done has changed my life!”

I tell you that makes all these three years look like nothing because every month you’re having another thousand, two thousand patients that are sending messages and saying, “thank you because now my epileptic daughter is feeling well.”

Six days after you take this medication, the clinic is calling up to follow up on that patient. That’s very important: “are you doing okay? Is the dosage working? How can we help you?”

So, then you’re thinking, “you know, yes, it’s gonna be tougher to get to the one million,” which is our plan, but then we’re going to have a million stories to share with everybody and I think that’s all going to make sense, but it’s always problem solving because you always think about the next stage.

You know, I was watching these documentaries on NASA, going to the moon and there are some people that have to think about the moon while they’re solving how to orbit the earth, and on the back they’re thinking well that’s great that we’re orbiting three times with John Glenn, but we have to think about going to the moon, and even today with landing on Mars, people are thinking “how do we actually have a man on Mars?”

So, I think it’s all about that passion, and all these problems, all these things, but it’s a unique opportunity. I mean Loren, we live in a country and you notice that, almost all our lives particularly in Colombia we produce commodity products. Our biggest exports are coffee, coffee beans, oil. Maybe, flowers are the one thing that we do provide value added, and we keep asking ourselves, “how do we make this economy grow?” And the only answer we give back to ourselves is “well we just keep growing more commodities.”

I was lucky enough to be able to go to school in the US, and I started thinking “well, why don’t we create something that’s actually going to create value?” That is, maybe we can change some part of this, and we don’t want to be the country that cultivates the most cannabis, I don’t want that to happen, I want us to be the country that develops the most cannabis technology, that has the best products, that has the best service, because that is exportable everywhere else.

Those things came to mind with my partners and me, my two co-founders when we started the company. I lead an amazing team that we have here, and everybody’s very motivated. When you feel down, because no, this is not easy, you just look at a couple of videos with these patients recording your stories, you’re thinking, “you know what? We have to keep going!”

Finance Colombia: You know, you’re right. I look at companies here, you look at the “resource curse,” and you look at countries that put out commodities. One of the problems with that is that if all you do is export crops and somebody else puts in the value-add somewhere else, then that’s also where the wealth is created. And you have a lot of countries, whether it’s in the Americas or in Africa or wherever—where they export crops, or raw materials, or petroleum, you look at countries that export petroleum, but they don’t have refineries. Colombia does have refineries, but Colombia still has to import refined petroleum products, even though there are refineries here.

And so when, like you said, when you can export a high margin product like a finished cannabis derived product, then you’re creating wealth obviously for your shareholders, but you’re creating the wealth in Colombia versus…”I’m going to, I don’t know, export—I mean coffee is great, but you export bags of coffee beans that are then roasted in Seattle or somewhere where they charge,  a zillion dollars or $50 bucks for a cup of coffee! So, I think that one of the…I look at Tecnoglass (NASDAQ: TGLS). That’s a company I respect a lot because they don’t just export the raw product, they export environmentally high energy efficiency, treated, finished products that are used in high-end, branded real estate. So it’s like you’re not just exporting a raw green crop, you’re exporting the finished product or you’re creating a finished product and so I look at that, and I think that Colombia needs more of that! So, the best success to you guys, I follow the company, we here at Finance Colombia have followed you for years and so it’s good to finally talk to you.

Álvaro Torres: Thank you Loren, well, you know, just on that last point remember poverty calls poverty. If you are always focused on that commodity, you have to reduce your price, you’re going to pay your people lower, you’re going to reduce your labor costs because you have to produce it lower. Tecnoglass is a fantastic company, I know them very well. I know some of the executives because they are not selling glass, they are building facades for buildings in Miami.

Finance Colombia: Exactly.

Álvaro Torres: So, that’s I think that’s a great point, we all need to think about it. It’s always a longer path, but this is not such a complex business. Medical cannabis the way we look at it, is clinics, and product, and service. It’s not something that’s so far out there because it’s just a new medication that we just reintroduced into the market, and we try to do with really good service. So we can have 50% month-to-month growth, since we started?

Hopefully, you can go and visit our clinic and you can see for yourself because once you get there, you’ll see that. It will tell you everything you need to learn about our company just going there.

Photos, except screenshot, courtesy Khiron Life Sciences

Apples from the US compete in Colombia with imports from Chile, Portugal, Spain, Italy and France. US producers export between $10-15 million USD in apples to Colombia, representing approximately 8.500 metric tons, though that volume increased 21% to 10,300 metric tons as of September 2020 according to Alejandro Díaz, the country manager of FTA international, representative in Colombia of the Washington Apple Commission.

“In Colombia there is room for people to eat more apples since each person consumes 1.8 kilos a year, which is about 13 apples. It is low when compared to the United States, where about 8.6 kilos are consumed per person per year,” said Díaz.

The Golden Delicious apple is a popular variety in the US for eating raw, known for its very sweet taste and characteristic bright yellow skin. The Cripps Pink is less sweet and more acidic, and due to its flesh characteristics is useful for baking, salads and snacks.

According to the US Apple Association’s 2018 figures, the top ten apple producing states are Washington, New York, Michigan, Pennsylvania, California, Virginia, North Carolina, Oregon, Ohio and Idaho.

Before publishing and during research for the piece, Finance Colombia reached out to both Victoria’s Secret and Leonisa but received no response. Victoria’s Secret still has not responded, perhaps because they have been busy responding to sexual misconduct allegations. The previous week, 100 Victorias Secret models signed a letter of complaint to the company’s CEO, demanding the company “change its culture of misogyny and abuse.” The New York Times had just published a damning investigative report earlier this month alleging “bullying and harassment of employees and models.”

Leonisa has 3,611 posts on Instagram. Finance Colombia counted the last 300, going back to December 16, 2018. 2 of the individual images contain anyone nonwhite. 8 of the group photos included anyone nonwhite.

Leonisa did not respond before the article was published but did contact Finance Colombia after the article was public. The representative, Juan Felipe Duque, who runs Leonisa’s North American operations out of Atlanta, Georgia insisted that the company is committed to diversity, and that it was unfair to look at only one 220 page catalog (with over 1,000 images). Finance Colombia agreed to publish a full interview, and to look at other sources. The full, unabridged interview follows.

Since the first article was published and immediately before publishing this article, Finance Colombia also looked at Leonisa’s social media accounts. Here are the findings as of February 18th. It is up to the reader to come to his or her own conclusions. Does this reflect the diversity of Colombia, Latin America, North America, or even Europe? The reader can come to his or her own conclusions. At time of publishing:

On Leonisa’s Pinterest account, there are 237 images including people. Of those,

• There were only 2 individual shots of anyone nonwhite.
• There were 4 more group shots that included a person other than white.

Leonisa has 3,611 posts on Instagram. Finance Colombia counted the last 300, going back to December 16, 2018.

• Only 2 of the individual images contain anyone nonwhite.
• 8 of the group photos included anyone nonwhite.

On Facebook, Leonisa has 2,969 photos, with 2,036 posted by other people. Finance Colombia focused on cover photos, which are intended to convey a brand image, and are posted by the brand. Leonisa has 76 cover photos. In those, there are images of 179 individually identifiable people.

• None of the individual images contain anyone nonwhite.
• In total, 9 nonwhite individuals, out of the 179 can be identified.

Leonisa points out that its C16 catalog of 2019 featured Colombian morning television personality Catalina Gomez, (click here) and points to its participation in the Concurso Nacional de Belleza which selects Miss Colombia.

Finance Colombia in the previous article made no judgement regarding the ethics or values of Leonisa, or what the company thinks. The article simply reported what the company did in a specific catalog and on its website and stands by the factual accuracy of its reporting.

On Facebook, Leonisa has 2,969 photos, with 2,036 posted by other people. Finance Colombia focused on cover photos, which are intended to convey a brand image, and are posted by the brand. Leonisa has 76 cover photos. In those, there are images of 179 individually identifiable people.
None of the individual images contain anyone nonwhite.
In total, 9 nonwhite individuals, out of the 179 can be identified.

Is Leonisa doing enough? Not enough? Finance Colombia has heard reactions to the first article from “I’m sure they didn’t mean it” to “I will never do business with them again!” Should Leonisa endeavor to reflect the diversity of its customer base, or is that a bunch of “politically correct” liberal nonsense?

Is the Leonisa catalog a case of “implicit bias?” Below you will read Leonisa’s justification for not using Colombian models in their Colombian catalogs. Does it make sense to you? There is a comment section after the end of the article. Share your feedback.

Finance Colombia:  So tell me about the company Leonisa. I haven’t been able to find out much about it. There’s not a lot on the website, I understand that it’s a Paisa (homonym for Colombians from Medellín & the surrounding region) company from here in Medellín, but what’s the history of the company? Who founded it? Who owns it, and how big is it? What can you tell me about Leonisa, the company?

Juan Felipe Duque:  It is a privately owned company and it was started in Medellín as you suggested, and it was founded in 1956. Since day one we have been doing women’s intimate apparel. When we started going to the United States, we saw that there was an opportunity and a growing marketing for shapewear, so knowing that we had very unique technology and we were vertically integrated —because the main difference between Leonisa and other brands is that we make 90% of our raw materials, so we make the fabric, the lace, the elastic, everything. The only things we don’t make are metallic or metal components like underwires, hooks and eyes.

Click here to view Leonisa’s corporate profile

So we started doing business in the US primarily via e-Commerce, and you know, we saw that opportunity in shapewear, a growing market and the American consumer is starting to like a lot of our products, and a lot of the Latino women that would go to the United States, when they knew that Leonisa started selling there, they would recommend it to their friends and family. After a woman gave birth to her baby for postpartum, for daily use, and that’s how we started to become popular among consumers in the US, mostly for our shapers, then obviously, we try to sell some of our other products, like bras, swimwear, activewear…

Finance Colombia:  It makes sense because you know, shapewear has a different market space or market perception in the US compared to here in Colombia. In Colombia it seems to be a lot more popular, you see a lot of advertising from Leonisa, or some of the other brands here, on buses and the stores in shopping malls. In the US, it hasn’t had that same presence, you can find it but it’s not…It’s like back in a different room or it may be a small specialty store, but it is not promoted as fashion, right? 

Juan Felipe Duque:  Definitely, definitively.

The shapewear retail segment shows modest growth in North America.

Finance Colombia:  I saw that it’s a growth market, I was reading in one of the fashion business magazines, researching for the original story and it said that area is growing at about 2% per year. I remember Victoria’s Secret is from L Brands, from Columbus Ohio which is where I’m from, so I saw how that group of companies really grew and took off in the eighties and nineties and it was interesting my first time in Colombia in 2004, there were no Victoria’s Secret stores yet, but people would bring Victoria’s Secret…People knew about it, and would bring the brand down here and it was like contraband diamonds or something! Women were crazy to get their hands on it and now you do have some of those stores down here, like Victoria’s Secret and Bath & Body Works, and this still, Latin America still seems to be a growth market where in the US has matured for them and similar brands so I think that the linkup looks like, as I mentioned a win-win situation for the two companies.

Now tell me about yourself, your name and your role with the company.

Juan Felipe Duque:  My name is Juan Duque and I am basically in charge of the company’s operations in North America, we’re based in Atlanta. From Atlanta we oversee Canada and Mexico.

Finance Colombia:  So I’m glad you contacted us. We tried to contact somebody from Leonisa for the original article and now want to give Leonisa the opportunity to tell their side of the story or to set the record straight, whatever the case might be. We don’t do hatchet jobs, we don’t have any animosity towards any company at all, and we want to see increased trade and opportunities between Colombia and the US, and the rest of the world, the entire world.

Colombia now has 13 Free Trade Agreements I think, with countries is far away as Korea, relationships with Australia and New Zealand, obviously Europe, and so what I wanted to do is to is to reach out and…I’ll tell you how this story came about, because obviously Leonisa is a big brand here in Colombia. Your catalog was on my dining room table, my wife had it and it looks like she had her neighborhood direct sales representative listed in the catalog.

Juan Felipe Duque:  Right.

Leonica’s C18 Catalog of 2019

Finance Colombia:  And so I don’t know, I was just bored or something, and I started looking through it, I know that it has a men’s section. I didn’t look closely at first, but I looked at my wife and said: “how come nobody looks like you?” This is a Colombian brand, and you’re a Paisa, you’re from Santa Fe de Antioquia…and her friends were sitting around the table and I asked them, “you are the customers, but is this catalog supposed to be for you? None of you look like this.” And they kind of look at me and had no answer, and that was the genesis of how this article came about. Last week I tried to reach out to people from both Leonisa and Victoria’s Secret and was not successful in obtaining a response. So we went ahead with an article but I’m glad that you’re here to answer any questions, and so I guess the first question I would have it if you tell me about the process of how the publicity comes together. I used to do fashion photography for a brief time in the 1990s, but I have been out of that industry since then so the catalog, online, how do you bring the imagery together? Tell me about that process.

Juan Felipe Duque:  The catalog business to your point in particular, the catalog that you found on your table, that is a very, very unique business model and a very unique marketing…Or let’s say to your point model collection, so in general what it comes down to, just let’s say you are a model here in Colombia, and you are a local personality, you start, you go to classes, you learn how to model, you join a modeling agency because all of these relationships have to be done through modeling agencies, so you end up in one of the most well-known modeling agencies or more reputable modeling agencies, so at that point you are in a very good position, so a company like Leonisa comes to you, and we print that catalog six months in advance, but we have to design it, we have to, you know, the printing process, that is unfortunately a very lengthy process.

Finance Colombia:  Yes.

Juan Felipe Duque:  Especially when you bring thousands and thousands of books, so we as a company we come to the models, and we say “listen we want to use your talent but you have to sign an exclusivity agreement that you won’t model for other catalog in the business for the next 7 months.” So would you agree to that if you were a Colombian model? Well, the answer, the most logical answer would be no, because for one photo shoot, for 1,2 or even a week, I’m not going to be, y, basically hand-tied without working in other places, and why is that? Because most women that sell catalogs, they don’t sell only Leonisa, they probably sell three or four other books, so if you see the same lady in all other books, wearing clothing, people are going to be confused, they’re going to say “oh, this is all the same product”, because now in textiles, it’s hard competition and that’s primarily why it is very difficult for us to use or to find qualified local women.

So you can find one, you can find two, but to have a sustainable catalog that gets printed every 21 days you then have to go and look outside of the country where they don’t really care about a Colombian catalog, they are never going to go there, they are doing business in Europe, they’re doing business in the United States or whatever, and when you tell them “listen, would you be willing to give me an exclusivity for a Colombian catalog, they will have to say yes.

So that’s one part of the story and second, let’s say you want to do your own research and you go to one of these modeling agencies, you tell them “okay, can you please show me the portfolio of women that are willing to model in Intimate apparel? So out of 100, the model comes down to probably 10, which then out of the ten, we choose those women that will be suitable that the product will do well, that are in a B or a C or a D cup, so it becomes very narrow and sometimes you have a really hard time finding it so that’s why at the same time you just go to reach out to the world and then you do try to find women that have a good attitude, that’s when you start designing your…How is the mood of the brand and once you have that process settled down you can basically use models from anywhere in the world and we have. We used models from Argentina, from Brazil, from Peru, compared from…You name it, from anywhere we could.

Finance Colombia:  So let me make sure I understand what you’re saying correctly…

Juan Felipe Duque:  Yes.

Finance Colombia:  The way I understand what you’re saying is that Leonisa finds it difficult to find Colombian models willing to model in this catalog, that’s what I just heard you say. Did I misunderstand you? Because I want to be absolutely clear on this, because I find that…I find that very surprising as a photographer that has worked in that field before. I’m in here in Colombia, which is a country famous for models! Leonisa uses foreign models because it finds it extremely difficult to find models that are Colombian that are willing to work with Leonisa. That’s what I understood you say.

Juan Felipe Duque:  Not that are willing to work with us.

Finance Colombia:  Ok?

Natura, another catalog retailer, doesn’t seem to face the same challenges with using local talent. It’s catalogs, printed in Colombia, feature Latin models almost exclusively; In this case, Brazilians Tiago Mendes and Yasmin Estevan. Natura is a Brazil-based company with a Colombian subsidiary. (Catalog Ciclo 02 2020)

Juan Felipe Duque:  That’s what I wanted to make very clear that it is for a catalog, for the catalog, for printing photography in a Colombian catalog. I could find them very easy, I will find them, but if I use them I’m going to see them in this whole catalogs of competitors.

Finance Colombia:  Well, let me ask you this. You guys are now partners with Victoria’s Secret, they use models that are well-known, and they are well-known because they’re modeling! The reason that Victoria’s Secret wanted to use them is because they’re modeling everywhere, and you have models on your website from places like Serbia and Russia, who are well-known because they model elsewhere. You told me that Leonisa wanted to use them because they were already famous and had followings, so it seems that they’re working in other places, right?

Juan Felipe Duque:  Right, but they won’t work with people in our local markets.

Finance Colombia:  Okay, so for the record, there are a lot of Colombian models that are not willing to work exclusively with Leonisa, and for that reason Leonisa uses foreign models?

Juan Felipe Duque:  Well, it’s not the rule, it’s difficult, that’s what I sent you, if you see the PDF file that I sent you. (Leonisa has given Finance Colombia permission to share with readers, click here to view)

Finance Colombia:  Yes, it’s open here.

Juan Felipe Duque:  When we are able to find local (talent) we try to do a whole campaign, a whole book, but you’ve got to understand that we print a book every 21 days, so is very difficult that you’re going to be able to have…and you can check even in any retailers in Colombia, you can go to Éxito, you can go to Avon, any local company that sells via catalog, most of them use international models as well, as far as their portfolio, because they have the same issue. And this was basically one campaign before the one you saw, it was unfortunate because if you would have seen this this campaign in 2019, you probably would have been amazed the other way, right? We found this lady, which is a very popular morning show personality, I don’t know if you have heard of her, Catalina Gomez.

Finance Colombia:  Yes, of course.

Juan Felipe Duque:  Ok so she’s a morning show personality, one of the most loved colombian women in the country, her popularity is very high, so we were able to get to an agreement with her, where she would do a whole campaign with us, and she was willing to give us an exclusive for catalog sales business and modeling, and we did a very good job with her. We wish we could find more like her. When you find something like this, there are also two components, right? You find the women and then you have to look at the financial aspect as well. So let’s say a current celebrity for telenovelas or a current personality, if they are in there. When you ask them for prices, they can cost five or ten times more than another regular woman, or another woman that could be doing the job.

Finance Colombia:  Right…

Andrea Tovar was the first Miss Colombia from Chocó, and the first afrodescendant to represent the country in the global pageant. (Click to enlarge)

Juan Felipe Duque:  So then you go to the article and you go to many pages; you know we have been the main sponsor of the national beauty pageant for 10 years, and every year after the tournament or the pageant ends, they got a contract with Leonisa swimwear, and I shared some examples of some recent beauty pageant winners. We were very happy to work with them in some of the other catalogs I showed you to where we used local talent, so we always have a mix of people from all over the world: Latin, non-Latin, you know, we cater to women from their first training bra all the way to the last bra she will use.

Images from Leonisa’s 2015 branding campaign

You know, we have been in the market for over 60 years the company has been in business, we’ll just do a lot of work with, and we’re a very big supporter of the early detection of breast cancer, I mean, you would be amazed, so the printing of the catalog is the complicated one, now if you are able to go to the website—

Finance Colombia:  Yes, I have it open here.

Juan Felipe Duque:  Okay, so are you in Colombia or are you outside?

Finance Colombia:  I’m in Medellin, I’m just outside of Guayabál, so I’ll go see your factory. (Guayabál is a neighborhood in Medellin where Leonisa has a factory)

Juan Felipe Duque:  Because that’s the other point, women that, you know, model activewear, exterior apparel, is much easier. So if you scroll down and you go to where it says “Descubre lo que está pasando en Leonisa” (discover what’s happening in Leonisa).

Finance Colombia:  I see: “Esta es nuestra experiencia, recomendado para ti” (this is our experience, recommended for you). Right, okay, I’m looking at this.

Juan Felipe Duque:  So, if you were one of the pioneers in doing this, what we’re trying to do is empower women like your wife, like her friends, who are using our products: how do you like it? Are you willing to share? This has been a complete game changer for us, we thought that it wasn’t going to be so popular, we have had so much information that if you start turning right you will have Leonisa consumers anywhere in the world, and we have been doing this for almost two years and the amount of information—you are going to a particular product; in the product we have the women that are users of the Leonisa products, sharing their pictures so that women see real women wearing the product. To your point, women that look like them, women that don’t look like them, because through the internet we get to women all over the world.

The “Top Models” section of Leonisa’s website does not feature Colombian or other Latina models.

Finance Colombia:  Speaking of the website, I want to go to the section where it says “top models” under Leonisa > about us > modelos top, and this is something that we talked about in the article. I see some very beautiful women, and I’m sure they’re great people, Lada Kravchenko, Elle Wagner, Marquita Pring, Tamara Lazic, Alexandra Elise, Nina Agdal, and you know, I don’t think you use it anymore but I remember Leonisa used to use as a tagline “Tan latina como tu,” (as Latin as you are) but, you know, but I’m looking here and there are no Latinas, and in the all the featured models, if you say “we want to go to the rest of the world,” well we just had the Superbowl in the US, and there’s probably nothing more American than the Super Bowl, and we had Shakira and we had 25 dancers from Cali, and we had Jennifer Lopez, who is Puerto Rican, we had J Balvin, but on the other hand, I come here to the “Tan latina como tu” company—and there’s nothing wrong with using models from the US or from Europe—but it’s exclusive! And I have to ask why? I’m not judging or saying it’s good or bad, but I have to ask why.

Juan Felipe Duque:  Yeah, because that “Tan latina como tu” as a campaign, was probably in 2005, then starting in 2009, 2010 we started selling for international markets that were not Latina exclusive, in the United States and Europe, at that point we started using more international models. These models are models that at some point made the agreement that we could use them for this particular section, but then we stopped doing that because when the when the eCommerce started growing, they basically, it was more expensive to add for that particular permission.

Leonisa spread from 2016 featuring Miss Colombia Andrea Tovar.

This would be something that will stay there for some time with the photo shoot basically, we stopped using or filling this section of the website with new or top models, but also the fact that we were able to find talent worldwide also. I mean, there is no reason to be paying like Nina Agdal, you know, she became very popular after this work she was the wife of I think Leonardo DiCaprio, you know, a very famous personality.

What I’m saying is that it really became no longer financially feasible to start using supermodels for online. It became more expensive than regular for you to be able to find an agency in Barcelona or New York, or in Bogota, or wherever you were, you had to fly over there, talk on the phone, send me…Now you can just go online and get any model in the world and find work very easy like that. That’s the beauty of the world at your fingertips, but I don’t know if that answers your question.

Though the majority of Colombians are mixed Amerindian descent, some companies almost completely exclude Amerindian complexions from commercial images These two models, identified as Alissa & Yasmín are featured in Natura’s catalog ciclo 02 2020.

Finance Colombia:  Well, it leads to other questions, and it’s related to what you were saying about the catalog. Even though I will take you at your word that if it’s difficult to find colombian models that are willing to work under the conditions you need. When I think about people who are aspiring models who would probably model for free just so they could be famous in the catalog like Leonisa. I know so many women in the US that their dream is to be a Victoria’s Secret, or Sports Illustrated model, but okay: if as you say, you can go to the world market for people for either online or your catalog, if you go outside of Colombia, you have Puerto Rico, you have Panama, you have 60 million latinos in the United States, even more than in Spain, even more than in Colombia, and a lot of them are signed up to be models, you want exotic? I know a Russian-Dominican model in Miami, okay, who is six foot tall and is a professional runway model who has never been to Colombia so wouldn’t care about exclusivity.

Did anybody notice when they were putting this catalog together that it excludes absolutely anyone who’s not white? How does someone produce a 200 page catalog and nobody even notice, is what I’d ask and what I thought I would ask you.

And another thing that I noticed, and this very good especially when you talk about the fashion industry, you have begun to use plus size models. I think even one of the international top models are plus size. Victoria’s Secret has come under pressure but to their credit they responded very well to that, and I think that you  have an initiative that talks about things like body dysmorphia: bulimia and anorexia, and my wife is psychologist, so that’s her field, but it’s good that you all are taking an active role and being proactive in that. So first let me be fair and complement you on that. But that leads me to ask the question that: at the same time of somebody who doesn’t look like a runway model who’s not 6 foot tall, size 4 and a B or C cup, maybe for the same reasons that somebody looks at a catalog, or at images in the media are at images in in fashion and feels like they have been excluded. That contributes to a negative self-image and the fashion industry is responding to that. What about the little girl in Chocó, or La Guajira, or Sincelejo? I know one of the models of that you even have in the PDF you sent me is the former Miss Colombia from Sincelejo, Ariadna Gutiérrez.

Juan Felipe Duque:  Yeah, we use them, we use them.

Ariadna Gutierrez is a former Miss Colombia who hails from Sincelejo, a small city near Cartagena. Famous outside of Colombia for being mistakenly crowned Ms. Universe by Steve Harvey, Gutiérrez suffered bullying and social media attacks for simply posting a teenage photo of herself which more clearly shows her indigenous roots.

Finance Colombia:  So when a girl, or man for that matter, because you have the Leo brand as well, or woman sees that and they get this catalog in their hands and they’re looking, and like every country, you know the US has had its own problems, and Colombia’s problems are different and the history is different, but has them, so if that girl looks at the catalogs and sees that this is what is defined as attractive, “but nobody looks like me, just maybe, I’m not attractive,” the same thing that happens with body dysmorphia, isn’t that a danger for your own people here in Colombia, across populations?

Ariadna Gutierrez suffered social media harassment for sharing an unretouched teenage photo of herself (click here).

One of the top businessmen here in Colombia I know, who is at the top of one of the biggest Colombian companies told me one time about how his parents were not allowed into Club El Nogal (an exclusive private club in Bogotá), because they were of Arab descent, because his grandparents were, like many people in the Atlantic region, they were Arab immigrants. I don’t think Club El Nogal is like that today, but he related to me this history that happened to his parents back in the 60’s or 70’s.

Juan Felipe Duque:  Right.

Finance Colombia:  So what if you don’t look like the way “the proper Colombian” is supposed to look? Just like where you don’t have to be thin or look like a runway model the same question is what about most Colombians who don’t look European, because they’re mestizos or mulattos?

Juan Felipe Duque:  No, I get your point, but the whole issue here is that you’re judging, you’re making the judgment on a 5% sample. We print 21 catalogs a year; the big ones, 200 pages. Then we print 24 smaller catalogs a year, then we have the inserts, we have, so you are judging by probably 1% or 3%, If I show you this catalog on page 16, where we used one of the most well-known people, very relatable to everybody in the country,

On Leonisa’s Pinterest account, there are 237 images including people. Of those, there were only 2 individual shots of anyone nonwhite. There were 4 more group shots that included a person other than white.

and we have used many other personalities or women that to your point, look like our mainstream consumer but at the same time you have to, you think—and I don’t blame you for it—but people think that is really easy to select, I mean, you have to go through modeling agencies, in Colombia, the labor laws, if you don’t contract them, it is, you know how complicated it is.

So that you don’t have to take my word, like you made an article, blamed me and Leonisa for not using Colombians and working with Victoria’s Secret. If you saw the products that Victoria’s Secret was working for with Leonisa and the three models, all of those three models on victoriassecret.com, were 100% Colombian.

Finance Colombia:  Let me ask you a couple more questions because I want to be fair with you. Looking forward, you are expanding into the US market and in our publication has probably more readers in the US than anywhere. Finance Colombia generally is read by executives that are doing business with Colombian companies or looking to do business here or looking to form business links here, whether that’s in fashion or petroleum or wherever. What would you say to those companies as to what Leonisa’s policy or commitment is as you go into more and more diverse markets like Mexico and the United States, like Europe, which is about as diverse as United States, if not more so these days?

“I mean, you have to go through modeling agencies, in Colombia, the labor laws, if you don’t contract them, it is, you know how complicated it is.”

Juan Felipe Duque:  We really don’t have to say because we prove it every day with our work, with the models we use on our website, the partnerships we make, the charities we contribute to, social responsibility combined with the environment. We are the number one recycler of fishing nets in the ocean and we use and reprocess those nests and make swimwear out of it. We support our employees with. Anywhere you look, we don’t have to say it, and if you ask anybody, you can even ask your friends in Medellin about Leonisa, how we do. The people know us, they know our culture, they know our brand for women and we try to be the best we can as a company and as people, as employers, as entrepreneurs.

Finance Colombia:  Last question, because you’ve been very generous with your time: What is Leonisa’s commitment, not just to Colombian women and not just to Latin women, and not just to women because you have the Leo brand of some very attractive menswear? So if Leonisa has a commitment to that diversity and not just in the warehouse, and not just in the factory but in the retail stores and in the catalog, and on the website, what is that commitment not just that Colombians can expect but as you go to the US and European in global markets that global consumers can expect to see from Leonisa as you grow and as you internationalize and as you form partnerships.

Juan Felipe Duque:  Yeah, I know this is a commitment, has been and will continue to be, to make sure we are a very socially responsible company that we are a company that helps women look their best, embrace their beauty, no matter her size or age or nationality, we want to continue to be good with the environment, we think it is a very big responsibility, we are a pioneer in that, and, you know, in the world where we go we are all we will always stay true to our roots where we are a Latino company, that will never change, and we feel proud that, really we don’t want to change it, so I mean, we will stay committed to what we have been throughout the years and what has led us to be a company in most of the countries where we have presence and we sell our goods.

Leonisa photos used were provided by Leonisa and used with the company’s permission.

Natura is https://www.natura.com.co/ 

Barely a week before serving as a panellist in the upcoming Bonds, Loans & Derivatives conference in Bogotá, Tecnoglass CFO Santiago Giraldo invited Finance Colombia executive editor Loren Moss into his oceanfront offices to provide an update since their last sit-down in 2017.

 Finance Colombia: Most recently Tecnoglass announced a major deal with the French-based, global glass manufacturer Saint-Gobain. Tell me about, that deal that the two companies just did and what that entails?

Santiago Giraldo: So, that was in the works for about three years. We have thought about, being fully vertically integrated for a long time, that was the only step of the supply chain where we were not participating. In other words, we would transform the glass and the aluminum, but we did not have any participation in the raw glass manufacturing business. Saint-Gobain had historically been our main supplier of clear glass since they started operating in Bogota, and we basically saw this as an opportunity to join forces with a global leader, the people who invented, raw glass, and participating in that stage where we were not present.

But that’s only the first part of the deal, right now we’re going to participate in the existing facility, which sells about 100 million USD in revenues per year and we’re going to own about 25 per cent of that. But the real reason behind this joint venture is to develop a brand-new plant right here in Barranquilla, that is going to supply basically the rest of raw glass that we don’t source already from there.

We import colored glass from the US, and by doing this we’re going to be able to source 100% of our needs from Colombia, with much lower prices; lower transportation prices because we’re not going to have to transport it from Bogota to Barranquilla, we’re going to have it next door. Lower waste, so at the end we’re going to be 25% owners of two plants, with the second one that is being built right here, and we’re going to have efficiencies (cost savings) of about 5 million dollars per year, so all-in-all it’s a win-win, Saint Gobain wants to penetrate the US market, they know that Tecnoglass has been successful at doing that and growing into the US market, so they saw it as a vehicle for them to also push product into, into the US. So, it’s a win-win, it’s exciting, something that’s been part of the strategy for a long time, so to be able to, to close that and partner up with these is, is a next step for the company and its future.

Strong Growth

Finance Colombia: That’s amazing because I remember the first time when I interviewed probably 4 years ago, José Daes, and, and he told me that, the company’s strategic vision was to be able to go from sand all the way to the finished product and it looks like you are, are following that that vision. I know that you’ve had a busy and eventful year, aside from that announcement that was just made a month ago. Let’s talk about 2008 results, because you have really been doing well and I think it will attract the attention of more and more investors. You finished 2018 strong, what do you attribute those results to?

Santiago Giraldo: We were able to get sales up about 20%, basically all organic, and all of that growth came out of the US. The US grew 24%, Colombia basically stayed somewhat stable because as you know, Colombia continues to have some challenges as the economy ramps back up; construction activities have been quite slow so we hope that they’re going to take off, but the virtue of being diversified and doing a lot of business into the US, which is about 85% of our business nowadays helped the company quite a bit. In 2018, we went from about $315 million USD to about $371 million. So top line growth of almost 20%, but even more importantly we gained efficiency because we went from $62 million USD in EBITDA to $81 million in 2018, so EBIDTA growth of 30%. So, we’re growing top line, we’re getting more efficient. It was a record year for the company, based on the backlog we have at hand. Right now we’re expecting to again grow double digits this year, in both metrics, all organic, and a lot of that growth is expected from the US. The other thing that was exciting about 2018 was that we made a push into the residential market. Historically we had been very focused on commercial – 95/97%. Now, residential is about 10% of the business, so it’s growing because we have had a very good reception of a couple of very good high-end residential products that we introduced into the Florida market, with the expectation to grow that segment about another 30% this year to get from $40 million to about $52 million this year. So that’s a segment that, even though its only 10% of the overall business, it could become a meaningful part going forward.

Right now we are expecting to again grow double digits this year, in both metrics, all organic, and a lot of that growth is expected from the US.

It was an exciting year, completing the joint venture, continue growing our presence into the US which is a $30 billion market per year and we only sell $300 million into that market, so just 1%, there’s a lot of upside to be captured still, things are going well, and we’re foreseeing this year to end up at about $415 – $420 million, so another 12% of growth, with an EBITDA of about $90 to $95 million, so from $80 to $90 or so, we’re excited about the, immediate future.

Growth Strategy

Finance Colombia: Going into residential, obviously that’s, not your book of sales, it’s not where you’ve traditionally been focused, but I think that even in the traditional markets as, architects, builders move more towards LEED certification you have energy efficient glass, that has to continue to be a growth market for you as well.

Santiago Giraldo: That’s absolutely right, and part of the growth into the US is the Northeast states, some of the midwestern states where there are extreme temperatures, so we are able to sell our low emissivity glass. As you said people are looking to get LEED certification, so there are secular trends that are helping our business grow above the rate commercial construction is growing. Because there is a trend of construction being made out of glass, as opposed to heavy cement structures, even with commercial construction, there are secular trends that are acting as tail winds for our business, and on the residential side we were just not present, and there’s a huge market into Florida where we can capture incremental business.

Miami’s Icon Brickell development is a Tecnoglass installation

Finance Colombia: You made an acquisition in Florida, tell me about that company Tecnoglass purchased.

Santiago Giraldo: Yes, GM&P, we purchased them over two years ago, basically they are an installer of our products, historically they were our largest customer because we would sell our product that we manufacture here in Colombia and they would install it.

So we basically decided to integrate that to be completely vertically integrated toward the client, to be able to deliver all the way out to the project itself, so we were able to complete that, we control the process, we control the warranty claims because it’s us installing our own products, and we see it as a platform of growth, as opposed to growing manufacturing capacity into the US and taking away from the advantages that we have for being a low-cost provider and having Colombian labor and some other advantages. We can set up different branches of GM&P in the US and help that push our products into the different regions.

We are doing projects in New York, in Boston, in Baltimore, in Washington, so there are opportunities. We have done things in Ohio, we have done things in Tennessee, we are looking to do some things in Seattle, Southern California, Houston, so there is just a lot of work.

Finance Colombia: That was going to my next question, Florida is a big state, but it’s less than 10%. It’s obviously a natural market for Tecnoglass but it is less than 10% of the population and you haven’t mentioned the Northeast and Midwest. I am from Ohio and we are at 40 degrees Celsius in the summer and minus 20 degrees Celsius, not too often but sometimes, in the winter, and so that energy efficiency, adds up, as well as other different factors like the tinting and the emissivity, those kinds of qualities. Is there a strategy in place to diversify within the rest of the US and to other major markets?

Santiago Giraldo: We are looking to make a connection in Canada to penetrate that market. For the last 5 years since becoming public, we have focused in the US; Florida because Florida; we have been doing business for over 20 years, that’s kind of our natural territory. But over the last 5 years, we have been able to develop business from Texas, Chicago, the West Coast, the Northeast, heavily populated areas that are closer to the ports, because we have a large transportation advantage when we travel in through the ports. There’s a trade imbalance between the US and Colombia so there’s a lot of container ships coming in full, and a lot of them are going back empty, so we get very competitive rates going back into the US. When we go into the Midwest, in places where we have to connect by land transportation, we take away a little bit of the margin advantage that we have, especially on the labor cost, because we actually get better rates transporting into coastal cities than a lot of companies do from the Midwest or other parts of the country into the coastal cities, because land transportation in the US is more expensive than sea transportation.

So we have focused historically in coastal cities and there’s just plenty of work to be had there. We are doing projects in New York, in Boston, in Baltimore, in Washington, so there are opportunities. We have done things in Ohio, we have done things in Tennessee, we are looking to do some things in Seattle, Southern California, Houston, so there is just a lot of work. So far we haven’t focused too much on other places outside of LATAM and, and the US.

We did set up a branch in Italy to partner up with an installer that already knows Europe and has some contacts and some networking capacities there. Europe’s been, just kind of sluggish, it hasn’t turned a corner, but we’re ready. The idea was to be ready and be cognizant of any opportunities that could come out of there. There are a handful of very strong competitors in Italy and Spain, so it would be hard to compete, but we’re certainly better equipped as far as the cost structure goes. We could be competitive in penetrating that market as well, but for now the strategy is just to continue full speed into the US.

Capital Markets

Finance Colombia: How have the capital markets treated Tecnoglass recently? I mean, you have demonstrated success, you’re obviously listed in the US and then here in Colombia on the BVC. Has raising capital, or strengthening those links with, specifically institutional investors, coverage from the analyst community, is Tecnoglass still kind of a best kept secret or are you starting to gain traction and get more attention from the investment community?

Santiago Giraldo: I feel that the business model is more mature than the stock itself, and the company’s trajectory in the stock market. We are still a very young company in the stock market, it’s only been 5 years, but we have done a couple of things. Significantly, we have since been able to go out and place incremental stock, just last month we placed about $40 million dollars which is what we needed to complete the joint venture with Saint-Gobain. And that’s given us added liquidity, it’s given us the type of institutional investors that are long and, and that will support the stock, that are going to value the growth trajectory and profile of the company, so we think that was a key first step.

 …things are going well, and we’re foreseeing this year to end up at about $415 – $420 million, so another 12% of growth, with an EBITDA of about $90 to $95 million, so from $80 to $90 or so, we’re excited about the, immediate future.

On the asset side, with this re-IPO we were able to get three more analysts covering the stock, good banks to have, ample presence in the US, with a, with a strong platform, so we think that’s going to help us out as well. On the debt side, two and a half years ago, we issued a bond in the US, so we’re one of the few Latin American companies that has access to the capital markets on both the equity and the debt side. We already have established those avenues, and for a company that is growing and as dynamic as this is, it’s definitely a great advantage to have that pocket of capital available to us, if need be. I think there is clearly room to continue growing for the overall investor community, to be fully aware of what an investment opportunity this is.

Loren Moss of Finance Colombia (lefit) speaks with Tecnoglass CFO Santiago Giraldo (right) in Barranquilla. (Photo credit: Liliana Padierna)

I think the numbers speak for themselves with the growth trajectory, but I think there is still some lack of knowledge, or lack of understanding of the business model. Or the fact that we are a Colombian company is going to prevent a lot of people in the US from investing because they only invest in US equities or what not. So I think Tecnoglass is a niche company, it’s probably not for everyone, but those that are looking for a growth story with a sustainable business model should definitely be interested in us.

Finance Colombia: Absolutely, and, and I think you’ve touched on something that, that can be frustrating because Tecnoglass is obviously an established, successful company, and people look at Colombia, and it’s the third largest economy in Latin America, even though the first two are Mexico and Brazil, which Mexico has I think 140 million people, Brazil 175 million people, Colombia with only 46 or 47 million people is still number 3, and people don’t realize  that it’s diverse, they have a lot of things going on besides just petroleum. Colombia is now member of the OECD. Colombia has free trade agreements with the US, and I think it has to be frustrating that a lot of times Colombia, Colombian companies, or investment destinations are overlooked by the investment community, whether that’s institutional or even retail.

Santiago Giraldo: Yeah, and I think that the country is misunderstood. I think that you have still the perception from a lot of people that Colombia is not a safe place, or it’s unstable. Um, but if you look at our economy and our democracy it’s probably as stable as they come, in Latin America.

So, for emerging market investors this should definitely be a place to look at. Unfortunately, there are still a lot of people that misunderstand the story, or don’t care to understand it as much. But I think we are going in the right direction. I think the fiscal discipline that the government is showing, all the right things that are being done, are eventually going to get us there. The other thing is that, to tell you the truth there are large corporates in Colombia. Then you go to middle-market sized companies that are not going to have access to capital in the capital markets. So, really, I think Tecnoglass is on the verge of getting to be a large corporate, once you start pushing $500 million dollars or so.

Barranquilla: Location, Location, Location

Finance Colombia: I agree, and not just Colombia but even more specifically here in Barranquilla, which is a large industrial city, it’s one of the most important cities in Colombia, and I think that outside of Colombia, you go anywhere in the world and people have heard of Bogota, they’ve heard of Medellin, but they don’t realize the industrial base, that is here. You look at the advantages of Tecnoglass here, located on a major port right on the water, where you can export things, you get the advantage of transportation, the cost of shipping—and it is expensive to ship things within Colombia, especially within the mountainous regions and the Andes region, but here on the coast you have got great infrastructure, it’s really well set up for export.

I think people are seeing that there are some valid reasons to bet on Barranquilla.

It has always been puzzling to me why the city or this region doesn’t get more notice from the business community in general. Cartagena is an hour away, and they’re famous as a tourism destination, but people don’t realize Barranquilla is even bigger, and has a larger economy, but again everywhere in the world people have heard of Cartagena, but only people who are really maybe in the business community, and in specific sectors know about Barranquilla. They seem to be missing out.

Tecnoglass has a 3 million square foot headquarters and production facility in Colombia’s Atlantic port city of Barranquilla

Santiago Giraldo: Yeah, I think historically companies have been keener to set up shop in Bogota, in Medellin, just because of larger population bases. But, over the last 5 or 10 years I would argue that Barranquilla has been the most, dynamic city in Colombia with the development that is taking place, the growth, some companies basically wanting to relocate here if they are in the export/import business, so having been here or having been familiar with the city over the last decade I can tell you that, it is much more dynamic as far as growth goes, and improvement, but you’re absolutely right. The industry here lagged for a long time, so I think it is going to be a while before you get a significant number of companies and industries getting to that growth phase, where it’s going to start catching the eye of some people. There is a handful of, I would tell you 5 to 10 kind of large companies here in the city but that still compares to many more in Bogota or Medellin. I think we have a ways to go but I think people are seeing that there are some valid reasons to bet on Barranquilla.

Finance Colombia: Especially for export and for international commerce, because you don’t have to load cargo onto the internal highway infrastructure. You have the road infrastructure here, you have the ports, you can get things out to the rest of the world or bring things in from the rest of the world easily.

You are going to present; we are both going to be at the Bonds and Loans conference that’s coming up. Can you tell me what you’re going to be talking about?

Santiago Giraldo: Yes, I’m going to be on a panel that will be talking about high yield issues which I think is relevant for Andean-type companies that are not yet at the investment-grade level. I think from our own experience, and the issue two and a half years ago, there are some investors that really would like to see more paper come out of Colombia, because the companies that do issue, a lot of them issue locally, or the ones that are larger are not going to be in that high yield space. I think it is a good panel to give the audience an understanding of the pros and cons, what to be mindful of, what we think is important ahead of thinking about this option, so it should be interesting. I think it’s relevant for Colombia and the Andean region as a whole, so we’ll see. I think the CEO from Avianca is going to be there, somebody from Moody’s, myself,  someone from debt, someone from capital markets, so it’ll be a good, rounded-out panel.

Finance Colombia: They always do a good job at the GFC conferences.

Santiago Giraldo: They do, it’s been growing, I don’t know how many years they’ve put it together now, but it’s been certainly well attended.

Finance Colombia: We have participated ever since, I won’t say the first one, but, but ever since our first year, 4 or 5 years ago.

Santiago Giraldo: I think it’s the best event that there is in Colombia as far as that goes.

Finance Colombia: Absolutely.

Santiago Giraldo: It’s well attended, they get interest from all over the place, so, they have the right people there, they have the people that count, and the people from both the debt and the stock markets. Yep, yep, and that brings the quality, when you see some good speakers there, and they make for a good agenda, you know it makes up for a successful, recurring business.