Click on the above image to play the video.

Collective Mining keeps finding gold

First, some good news. Collective Mining (TSX: CNL, OTCQX: CNLMF, FSE: GG1), which is developing a gold mine down in the Caldas region in coffee country has five drill rigs operating at its Guayabales project, part of its 40 thousand meter drill program for this year. They are getting really encouraging results. This is the same team that developed Continental Gold and sold it to Zijin mining a few years ago for over a billion dollars. We published a more detailed update in Finance Colombia if you want to go over the numbers and assay results of this most recent update. I’m long on Continental because I believe in the team led by Ari Sussman.

Collective Mining Expands its Box Target Area with New High-Grade Samples; Drilling Continues

Petro threatens the private sector with “forced investments!”

President Gustavo Petro is once again terrifying investors, this time with an announcement that he plans to force private banks to loan money to projects and borrowers of his choosing. He said, and I translate:

 “I promised that we were going to present the measures to the congress of the republic to reactivate the economy which will consist, and I say it once and for all, in projects of law that generate FORCED INVESTMENT in the private financial system of Colombia destined to small, medium and large industry of agriculture and tourism in Colombia to reactivate the country.”

This is what Petro’s opponents warned about, and at least when it comes to intent, they were right. The question now is whether Colombia’s institutionalism can withstand more of his adventures. Statements and plans like this destroy investor confidence and scare away capital, just like what is happening with Ecopetrol.

“…and I say it once and for all, in projects of law that generate FORCED INVESTMENT in the private financial system of Colombia” – President Gustavo Petro

General Motors To Close Colombia Manufacturing Operations

Speaking of scaring away capital, General Motors is closing its Colmotores car factory after almost 70 years in Colombia. Now two years ago, GM said it was going to invest 50 million dollars to upgrade the factory to produce new models! What has changed? By the way, the Minister of Labor has told GM that they have to keep the workers employed even though the factory is closing, so we will see how that works out.

Alvaro Uribe is formally charged with witness tampering & bribery

Former President Alvaro Uribe, who in recent years has seen his once stellar legacy tarnished by a litany of revelations, is now formally charged with witness tampering in a drama that goes back to 2012. See the AP article here. https://apnews.com/article/colombia-alvaro-uribe-charges-witness-tampering-bd11a922142d000db1fcac178a1a147e

See also: Declassified US State Department Cables: “Uribe Almost Certainly Had Dealings With The Paramilitaries”

Bilateral harmony between Colombia & US leads to results

In some good news Colombia hosted a US State Department delegation last month for high level talks which led to several announcements. Foreign Minister Luis Gilberto Murillo, who actually was a US Citizen for a while, has announced that Colombians can now access almost 20 thousand United States non-agricultural work visas, and more than 1,000 summer job visas. We will do a write up on this both on Finance Colombia and Empleobilingue, the only source on the web for bilingual talent.

Colombia is going to open five new consulates in Phoenix, Dallas, Denver, Charlotte and Seattle. There are already 9 thousand Colombians studying in the US on Student Visas, and there is a family unification program already in effect between the two countries which has 6,000 current authorizations by the State Department.

The mammoth UNGRD scandal that threatens Petro

There is an ongoing scandal in the Petro Administration where the government paid the equivalent of $12 million US dollars for a fleet of water tanker trucks to supply water to citizens of La Guajira, the desert region on the Atlantic Coast near the Venezuelan border. Now, no water got to the residents of La Guajira, the trucks sat idle on a Colombian military base. But the money paid to a contractor by Colombia’s UNGRD (National Unit of Disaster Risk Management) was “allegedly” used to bribe Senate President Iván Name and Andrés Calle in the house of representatives to unblock opposition to Petro’s reform bills. According to Colombia’s comptroller, the Controller General (Contraloria), each tanker truck was purchased from the dealer, Kenworth de la Montaña, in Medellín, for about 600 million pesos, but then sold to the government for $1.2 billion pesos. This way they could launder money out for political purposes.

Former Deputy Director of the UNGRD, Sneyder Pinilla “prendió el ventilador-started the fan” (Colombian saying, like “when the shit hits the fan”) and accused former director of the UNGRD, Olmedo Lopez of using the UNGRD money through this conspiracy to pay the bribes, covering it up with this tanker truck contract, and that the payments were made at the direction of Petro’s Minister of the Interior, Luís Fernando Velasco, and the Councilor for the Regions, Sandra Ortiz, who was actually the bag man, or “bag woman.”

Now Olmedo López and Sneyder Pinilla are testifying and want immunity with Colombia’s attorney general, because they say that the tanker scandal is just the tip of the iceberg in a case that for Colombia, may be larger than the Odebrecht scandal.

According to these two, a political machine was put in place inside the Petro administration that would launder 380 billion pesos, or almost $100 million US dollars of “marmalade” or UNGRD funds into the hands of legislators and bureaucrats to bribe for passage of Petro’s reforms, all of which have failed so far, and to finance last October’s local elections, where again, Petro’s party and allies lost badly. Lopez says the tanker truck scandal just got discovered but according to him there is a whole infrastructure inside Petro’s government operating with this modality to bribe legislators and fund campaigns.

Now the scary thing is that the company that sold the trucks, Impoamericana Roger SAS was sold to Elmer Celis in 2019, and right before the contract for the tankers was being finalized, Celis was assassinated. So this scandal now has deadly implications.

Sura wants out of the EPS health system

Grupo Sura, the insurance and asset management giant has told the Colombian government that it plans to withdraw from the national EPS health insurance scheme. They are supposed to be meeting with the company to negotiate what happens.

Colombia wants the gold from a Spanish Galleón, so do Bolivians

In 1708 the Spanish galleon San José was sunk by the British during the War of Spanish Succession. in the Caribbean sea off the coast of Cartagena. The shipwreck was found in 2015 in about 600 meters, or 328 fathoms, or 2,000 feet of water, and Colombia is claiming it as its own and using the military to fend off any would-be treasure hunters. Last month, Colombia announced that it was launching a research and recovery project, aiming to prioritize the historical value of the wreck. There are complications though. The ship was Spanish, so Spain would need to renounce any sovereignty over the wreck. Spain considers the ship a graveyard that should not be molested out of respect for the dead.

Down in landlocked Bolivia, the Chicha, Caranga and Killaka people have filed claims with UNESCO saying that their enslaved ancestors extracted the treasure onboard from mines in what is now Bolivia, and have a right to share in whatever wealth is in the shipwreck.

This is going to be an interesting case. There is a treaty, the 2001 Convention on the Protection of Underwater Cultural Heritage. Spain is a signatory, so is bound by the treaty, but Colombia never ratified or signed it, so is not bound by it.

Colombia has (finally) outlawed bullfighting

The Colombian house of representatives has outlawed bullfighting, a 500 year old tradition of bovine torture inherited from the Spanish. There are still people who defend bullfighting. The bill is in reconciliation with the senate, and then goes to President Petro, who is sure to sign it into law.

Mafia guerilla groups flourishing, expanding under Petro’s “Total Peace” fiasco

Reuters is reporting that it got access to a secret report showing that all the major criminal mafias in Colombia expanded in 2023, making a mockery of President Petro’s “Total Peace” initiative. Those criminal organizations would be the Clan del Golfo, ELN, and the two former FARC groups Estado Mayor and Segunda Marquetalia. Petro ran his campaign promising “Total Peace” but these groups, three of the four are avowed communist guerillas, and the Clan Del Golfo a descendant of paramilitaries, just keep getting bigger. When is Petro going to start?

Reuters also reported on illegal road building in the Amazon rainforest, in some cases by these same groups, that the government is supposed to be stopping. For example, Chiribiquete, nobody is even allowed to go in there but there are at least 12 illegal roads built, according to Reuters!

These mafias, in this case it looks like the Estado Mayor – former FARC, is building these roads to conduct illegal activities in nature preserves, and the government is unwilling to do anything, or at least, so far it is not combatting the activity.

So that’s it for this week.

Remember to practice critical thinking

Stay mentally and physically active,

And above all, be kind to yourself and others.

The five new consulates will be opened in Charlotte, Phoenix, Dallas, Denver, and Seattle, according to Foreign Affairs Minister Luis Gilberto Murillo.

“The presence of Colombia is expanded through these consulates and is a response to the need that the Colombian diaspora, the extended Colombia, the population that lives in the outside,” said Murillo. “And we will do this, obviously not only in the United States, but in other countries where our population requires the attention of our government.”

In announcing the news, the ministry also highlighted the recognition it has received from the United States for the nation’s leadership in terms of welcoming migrants from Venezuela.

“We applaud President [Gustavo] Petro in his decision to expand regularization and protection options this year to give almost three million Venezuelans residing in Colombia the opportunity to work, send their children to school and have access to health services,” said Richard Verma, undersecretary of state for the United States.

Murillo added context by providing an update on the Venezuelan migrant situation in Colombia. “We have about 2.3 million Venezuelans here integrating into our society and we are also going to welcome about 500,000 – 600,000 more,” said Murillo.

The two nations also discussed plans regarding Colombians who have migrated, particularly the current US family unification program aimed at helping Colombians reunite with their families in the United States.

“About 58,000 a thousand Colombians will benefit,” said Murillo. “Authorization and invitation have already been given by the [US] State Department for 6,000, and there are already close to 500 families in the United States that have been reunified through this program.”

For the first time, the United States has also provided authorization for nearly 20,000 Colombians to apply for non-agricultural work visas and approximately 1,000 visas for young people to work in summer in different cities in the United States.

“There are nearly 9,000 Colombian men and women studying in the United States, which also shows the strength of this relationship in these aspects,” said Murillo.

Photo: Colombian Minister of Foreign Affairs Luis Gilberto Murillo. (Photo credit: Cancillería of Colombia)

A wastewater analysis has indicated that in Europe, cocaine from South America is now being consumed in smaller towns, as well as major urban areas.

Photo: A dismantled cocaine laboratory in Tolima, Colombia. (Credit: Colombian Air Force)

The report, published on March 20 by the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA), is the institution’s latest annual overview of drug residues used to estimate cocaine consumption across participant cities in Europe. This year, the report analyzed results from approximately 90 cities and towns, though several major cities, including London, Madrid, and Berlin, did not participate.

It found that the Belgian city of Antwerp, a vital port for the arrival of drugs from Latin America to Europe, remains the continent’s cocaine consumption capital, while eastern European states — particularly the Czech Republic and Slovakia — continue to dominate in methamphetamine consumption, though that is changing slowly.

The report also looked beyond the European Union for the first time to compare residues at a global level, including cities in the United States and Brazil in its analysis.

Researchers tested the cities’ sewage systems for indications of how much cocaine the population is consuming, which they estimate in milligrams per 1,000 inhabitants per day (mg/1000p/day).

Wastewater studies measure only drugs that have been consumed, not those that were dumped, João Matias, a scientific analyst at the EMCDDA and one of the authors of the study, told InSight Crime.

“Once inside our bodies, the drug is metabolized. Once excreted to the sewage system, researchers can take samples before the water is treated. We look for the metabolites produced after the use of a specific substance,” said Matias.

Here, InSight Crime analyzes the report’s findings on the increasing prevalence of cocaine and methamphetamine outside of major cities in Europe, as well as new data from non-EU cities.

Disparities Between Urban and Non-Urban Consumption Dissolve

This year, researchers noted that differences in residue readings between urban and non-urban settings in Europe no longer exist, suggesting that traffickers have flooded the continent with cocaine, and it is now available almost everywhere.

“Contrary to previous years, in most countries with multiple study locations, no marked differences were found when comparing large cities to smaller locations,” according to the report.

Record coca cultivation and cocaine production in nations on the supply side of the cocaine trade have enabled this spread.

Authorities in Colombia, the world’s largest cocaine producer, seized 739.5 tons of the drug in 2023, an increase from the 659 tons seized in 2022. Peru saw a 4.4% drop in seizures of cocaine but 53% more cocaine base, while Bolivian seizures jumped by 62%.

The Colombian government’s announcement in March that it would reduce eradication efforts to 10,000 hectares, half of 2023’s target, is likely to see coca cultivation increase still further this year.

Even with these record seizures in Latin America, seizures in Europe also continued to climb. Europe’s traditional entry points — Belgium, the Netherlands, and Spain — all increased their seizures. Sweden and Russia, countries not known for receiving cocaine, saw large single seizures of 699 kilograms and 460 kilograms respectively, while Norway made its largest-ever cocaine seizure of 800 kilograms.

The report also found that cocaine residues have doubled since 2011 among the seven cities that have participated in the study each year.

From 2011, the daily value of cocaine residue across Antwerp in Belgium, Zagreb in Croatia, Milan in Italy, Eindhoven and Utrecht in the Netherlands, and Castellón and Santiago in Spain, rose from 341 mg/1,000p/day to 747 mg/1,000p/day in 2023. Last year, the rate in these cities was slightly higher, at 800 mg/1,000p/day.

The increase in consumption is “definitely related to the increased availability [in Europe] and the increased production of cocaine in South America,” Matias said.

Methamphetamine’s Slow Spread

The report also found that methamphetamine use has spread into new areas of the continent, while seizures of the drug both in Latin America and Europe have made the news.

“Methamphetamine use, generally low and historically concentrated in the Czech Republic and Slovakia, now appears to be present also in Belgium, Cyprus, the east of Germany, Spain, the Netherlands, Turkey and several northern European countries,” said the report. However, overall, the study found that the amount of methamphetamine consumed remained stable.

“One of the highlights of last year’s report was that we were seeing an increase in methamphetamine use over most of Europe,” said Matias. “This year we found use in many countries, but we didn’t see the same increase in use we saw in the previous years.”

Methamphetamine, a synthetic drug, has traditionally been supplied to the European market by local actors, including in the consumption heartlands of the Czech Republic and Slovakia.

However, in 2019, multiple arrests of Mexican or other Latin American methamphetamine cooks in the Netherlands and Belgium suggested that the “Mexican method” — the production of methamphetamine used in Mexico which produces a high-quality drug — was being learned by European producers. Since 2019, there have been no other arrests, implying that a transfer of knowledge has taken place.

The vast majority of methamphetamine production in Mexico usually takes place in the northwestern state of Sinaloa, and is then trafficked to the United States. Significant amounts of methamphetamine have arrived to European shores recently, though the majority was intended for onward travel.

In February 2024, Ireland made its largest-ever methamphetamine seizure of 546 kilograms, worth some $35 million. The drugs had come from Mexico and were on their way to Australia, police said. The shipment was traced back to the Sinaloa Cartel.

At the beginning of September, Mexican authorities discovered 20 tons of suspected methamphetamine aboard a ship in Veracruz, on Mexico’s Atlantic coast, according to a press release. The ship was headed for Rotterdam, the Netherlands.

Non-EU Cities Rival European Cocaine Habits

For the first time, the EMCDDA report included wastewater results from non-European Union cities. Cities in the United States, Switzerland, and Brazil “show similar levels of use as the cities in Europe with the highest loads,” found the report.

Seattle in the United States recorded a daily mean of 647 mg/1,000p, while Geneva in Switzerland recorded 812mg/1,000p. The northeastern Brazilian city of Recife had a daily mean of 670 mg/1,000p.

These results are around the same as European cities like Utrecht (744), Paris (616), and Barcelona (619), but still far below the big hitters like Antwerp (1,722), the highest of all participant cities by a distance, or Amsterdam (1,210).

While cocaine consumption may be entrenched in many regions of the world, Oceania remains relatively untouched, according to residue findings. The daily mean of 102 mg/1,000p across Australia’s 55 sites suggests a dearth of the drug, and provides plenty of reasons for organized crime groups to continue, and perhaps even increase, their attempts to move cocaine to this untapped market.

This article, written by Peter Appleby, was originally published by InSight Crime, a Medellín-based foundation dedicated to the investigation and analysis of crime and security in Colombia and Latin America.

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.

It will start out by hiring 400 people by the end of October, according to the Seattle-based company, with a plan to increased that number to 600 in all before the end of the year.

At the center, located on Calle 26 in the Colombian capital, employees will fulfill customer service needs from across the world in Spanish, English, and Portuguese.

The company chose Colombia in part due to the talent, experience, and passion of the country’s workers, according to Tom Weiland, vice president of global customer service for Amazon. “I could not be happier to launch this site in Colombia,” he said.

José Manuel Restrepo, Colombia’s minister of commerce, industry, and tourism, celebrated the news, saying that there will be managerial-level and other good jobs. This is exactly the type of investment that the country and Ministry of Commerce, Industry, and Tourism (MinTIC) has been pushing to make happen, he said.

“Companies like Amazon raise the possibility of attracting more world-class companies and the demand Colombian services,” said Restrepo.

Globally, with roughly 566,000 workers, according to Fortune, Amazon is the world’s 10th largest private employer. With revenue of nearly $178 billion USD in 2017, it ranked 18th overall on the latest Fortune 500 list.

The increase in the company’s share value in recent years has slingshotted Amazon founder and CEO Jeff Bezos to the spot as the richest man in modern history. He is reportedly now personally worth more than $150 billion USD, according to Bloomberg.

While the new office in Colombia is to provide service, not sell products, this marks another example of Amazon seeing promise in Latin America.

While it has been focusing much of its expansion effort on India — where it has spent billions to gain a foothold — it has  limited offerings in both Brazil and Mexico over the past few years.

The only two airports in the region ahead of El Dorado are Mexico City International Airport in the Mexican capital and São Paulo–Congonhas Airport in Brazil’s largest city. By comparison, Bogotá has a population of roughly eight million while there are more than 20 million in the metro areas of both Mexico City and São Paulo.

The United States dominates the megahub global rankings. Nine of the top 10 are in the country, with Soekarno–Hatta International Airport in Jakarta being the only non-U.S. airport.

The U.S. airports amont the top 10 include: O’Hare International Airport (Chicago), Hartsfield–Jackson Atlanta International Airport, Dallas/Fort Worth International Airport, Denver International Airport, Charlotte Douglas International Airport, Los Angeles International Airport, Seattle-Tacoma International Airport, San Francisco International Airport, and Phoenix Sky Harbor International Airport.

OAG Aviation Worldwide, a research firm covering the industry, published the study in late November based on its connectivity index, a measure of the ratio of scheduled seat capacity to the number of destinations served by the airport.

Specifically, the company came up with the score for each location by calculating “the total number of possible connections between inbound and outbound flights within a six-hour window at the largest 100 airports in the world based on the busiest day for global aviation in 2016,” stated OAG in its report.

To increase its capacity to handle more flights, Bogotá has embarked on a major overhaul to its aviation infrastrucutre. It is currently adding a new terminal to El Dorado and will soon begin building a new airport — so far deemed “El Dorado II” — farther to the west of its current megahub on the outskirts of the capital.

Photo Credit: Jared Wade