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Latin America Investment News on Viva Tropical

Panama: Colon Free Zone Moves $29 Billion in Goods Annually

Article Summary:

Economic growth in the Colon Free Zone is unquestionably strong. The volume of exports and imports in 2011 reached $29.126 billion, growing by 56% over the past three years. The area has about 3,000 users, which together employ 32,000 people with an impressive 75% of goods entering the zone being redistributed to other destinations in the world, while the remaining amount enters Panama. Now the Zone is in the process of refining its business model and expects to exceed its 2011 numbers.

Photo Credit: The Bulletin Panama

Original Article Text From The Bulletin Panama:

Colon Free Zone Refines its strategy

The Colon Free Zone (CFZ) is known as a distribution center. However, due to its explosive economic development in recent years, the zone management has multiplied activities. Many businessmen are implementing processing plants with the aim of closing the last stage of the production process on Panamanian soil.

Although much of the income of Panama is generated by the Canal, the Colon Free Zone (CFZ) has developed economic growth worth studying.

For services and benefits offered, the zone is certainly one of the most important shopping areas of the world. It currently has more than 3,000 users – more than 3,000 large, medium and small companies.

Michael Nasser, financial advisor to the Free Zone Administration, spoke to The Bulletin about the development and future challenges in the zone.

“The zone is a cargo distribution center, a strategic point for Asian, American and European traders,” said Nasser. However, the trend goes far beyond “with the expansion of the Canal in 2014 when postpanamx ships will cross the canal and, therefore, the number of containers will cause a remarkable increase in freight movement,” he said.

Made in Panama
Like other countries boasting of developing production, Panama looks like it may be close to creating a sophisticated domestic industry. However, the free zone is not only focused on production but also distribution. This is the key turning point that will change the essence of the zone.

“There are already many companies that want to finish their production of products in Panama,” said Nasser. It may become an alternative for those merchants who can not buy products from other markets, an added ingredient to its principal role of distribution by also becoming a processing center. Currently 75% of the merchandise reaching the zone is redistributed across the planet with the other 25% of goods entering the domestic market.

Economic growth in the Colon Free Zone is an unquestionable reality. In 2008 the cumulative commercial activity (exports and imports) totaled $18,679 million. In just three years this figure increased significantly to $29,126 million in 2011.

“By 2012 we hope to exceed $31,000 million,” said Nasser. Growth is also physical.

“Today the free zone covers close to 1,800 hectares and also the (France Field) airport will be inaugurated this year. The airport will make a big difference in the free zone, which means that the distribution will not only be by sea, but also by air,” he added.

Free Zones
Regarding the existence and development of other zones in the country, Nasser sees no competition. When asked about Panama Pacific, he said that all areas are complementary.

“It has another type of market for large multinationals such as the American company Dell. Both zones have the same objective, generating employment.

“About 32,000 employees work for companies in the Colon Free Zone, plus other businesses have flourished, such as real estate and financial services”.

Nasser said that of the great advantages is that the free zone provides access to credit. “Those who do not have the necessary financial resources to trade are given very convenient credit facilities.”

The average payment period is between 120 and 140 days, and this allows merchants to qualify for more options.” The local banking customers rely on the Colon Free Zone as very solid and are very committed to business. Those who go to Colon with the urge to buy a container, to give credit, to buy four and thus generate more commercial activity, wait to get back some of their assets, and the financial engineering is not found elsewhere,” said Mr. Nasser.

Link to Original Article:

From Teh Bulletin Panama

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