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COLOMBIAN SECTOR OPPORTUNITIES

Colombian sector opportunities

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insideout2021

Colombian sector opportunities

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MANUFACTURING INDUSTRY

April 5, 2022
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MANUFACTURING
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CONSTRUCTION MATERIALS

 

Colombia has the potential for companies to invest in the construction materials sector, making it an excellent option for investors.

1. The construction sector plays an essential role in the Colombian economy

  • The construction sector in Colombia represented 5.2% of the gross domestic product in 2021. (DANE) and registered a growth of 5.7%. (DANE)
  • The construction sector in Colombia is expected to have an average annual growth of 6.7% between 2022 and 2025. The highest among the leading countries in the region. (FitchConnect).
  • Colombia has a wide business network of companies in the construction sector (more than 64 thousand) and construction materials (more than 7,000). Companies are located mainly in Bogotá (29%), Antioquia (14%), and Valle del Cauca (8.6%).

2. The Colombian construction materials sector is an export-oriented industry

  • In 2021, exports of construction materials reached USD 518 million, 36% more than what was exported in 2020. The result for 2021 is the best since 2014.
  • Exports in 2021 registered a growth of 18% compared to 2019, when they reached USD 438 million, demonstrating the sector's rapid recovery.
  • Companies in Colombia satisfy the local demand for construction materials and an expanded market throughout the Americas. In 2021, 6 countries accounted for 82% of construction material exports.

3. The construction sector contributes to the attraction of foreign investment in Colombia

  • Between 2010 and 2021, foreign investment in the construction sector summed at USD 5,861 million and reached its highest historical value in 2019 with USD 881 million. (Bank of the Republic).
  • Between 2015 and 2020, 10 investment projects have been registered in the construction materials sector. The investment corresponds to 9 companies with a total investment of USD 1,041 million, which have generated 2,758 jobs. (fDi Markets).

4. Colombia has opportunities for the development of the construction materials industry

  • The development of housing projects favors the demand for construction materials. In 2021, more than 21 million m2 were approved for construction, the majority for the housing sector (80%).
  • The construction sector is expected to experience considerable growth in activity in coming years due to the revival of residential construction activity, in turn, supported by government policies aimed at stimulating housing demand.
  • There is also a potential demand for construction materials with the development of infrastructure projects. With the development of these projects, the government seeks to transform the country's connectivity and infrastructure in the coming years, encourage job creation, and boost the regional economy.

 

CONTAINERS & PACKAGING SECTOR

 

This is one of Colombia's most competitive sectors, with a regulatory framework developed to facilitate a circular economy, ample supply of raw materials, and a wide variety of local stakeholders to form partnerships.

1. Colombia has raw materials to supply the sector.

  • Base industries in Colombia supply raw materials for the containers & packaging sector, including petrochemicals and cellulose for paper production and glass manufacturing. The domestic availability of these materials translates into savings in import costs.
  • From basic raw materials to the final product, there are many domestic components in glass production in Colombia.

2. Colombia focuses on containers & packaging exports.

  • In 2021, the sector exported USD 332 million. The top destination markets were the United States, Ecuador, Mexico, Peru, Germany, and Chile.
  • In Colombia, there is a diverse exporters' network that fits the needs of the international market. Containers and packaging are made from natural and synthetic fibers, including plastic, glass, paper, cardboard, and common metals.

3. Colombia is highly regarded as a production hub for processed foods, cosmetics, and personal care products.

  • Major global food producers such as Danone, Nestlé, Pepsico, SABMiller, and Kraft Foods demand large volumes of containers and packaging with the highest quality standards.
  • Large multinationals in the cosmetics and toiletries sector (including L'Oréal, Unilever, P&G, Johnson & Johnson, Kimberly Clark, Belcorp, and Yanbal) have operations in Colombia, which boosts the consumption of containers and packaging.

 

ELECTRICAL EQUIPMENT

 

Colombia has the potential for companies to invest in the electrical equipment sector, making it an excellent option for investors.

1. The electrical appliances and equipment sector is important for the Colombian economy.

  • In 2021, The GDP of the sector grew 32.6% and reached USD 708 million and was one of the fastest-growing sectors in 2021 among manufacturing activities after the leather and textile-clothing sector.
  • The offer of products for the electrical sector is varied, with nearly 100 products manufactured in the country.
  • Around 30,000 people are employed in the activity and more than 880 companies in the manufacture of electrical equipment activity.

2. Colombia is an export platform for electrical equipment companies

  • In 2021, Colombia exported USD 308 million in electrical equipment and conductors to the world, the highest figure since 2014.
  • Colombia has positioned itself as an export platform mainly to the countries in the Americas. Five markets accounted for 67% of exports.
  • In 2021, 302 companies exported 159 products classified by ProColombia as electrical equipment with a value greater than USD 10,000.

3. The electrical equipment sector contributes to the attraction of foreign investment in Colombia

  • Between 2010 and 2021, 12 investment projects have been registered in the electric and electronic components sector. The investment corresponds to 11 companies with a total investment of USD 94.4 million, which have generated 1,051 jobs. (fDi Markets).

 

STEEL AND IRON

 

Colombia has the potential for companies to invest in the electrical equipment sector, making it an excellent option for investors.

1. The manufacture of steel and iron products sector is important for the Colombian economy

  • In 2021, The GDP of the sector grew by 19% and was one of the fastest-growing sectors in 2021 among manufacturing activities.
  • The offer of basic metals is varied, with nearly 100 products manufactured in the country and more than 1,100 companies in the manufacture of basic metals activity.
  • The sector has great potential for production and export, thanks to the development of housing and infrastructure projects.

2. Colombia is an export platform for electrical equipment companies

  • In 2021, Colombia exported a total of USD 305 million in basic metals and steel and iron products to the world. Exports in 2021 grew 49%.
  • Colombia has positioned itself as an export platform mainly to the countries in the Americas. 5 markets accounted for 72% of exports.
  • In 2021, 430 companies exported 230 basic metals and steel and iron products.

3. The metal sector contributes to the attraction of foreign investment in Colombia

  • Between 2010 and 2021, 24 investment projects have been registered in the metal sector. The investment corresponds to 19 companies with a total investment of USD 2,009 million, which have generated 6,699 jobs. (fDi Markets)
  • Sectors such as construction, automotive, auto parts, shipyards, and household appliances demand high amounts of iron, steel, and aluminum. As a result, these sectors play a fundamental role in the economic structure of Colombia, boosting production, employment, and exports.