Colombia’s massive infrastructure under way includes 8,000km of new roads under construction, adapting the Magdalena River to the needs of larger vessels, and 117 projects to revamp the port at Barranquilla, among many other initiatives. René F. Puche, President of the Port of Barranquilla explains how the port is reaching unprecedented levels of cargo handling.
In spite of the difficult global situation, Colombia will probably be the fastest growing Latin American economy this year. Although Bloomberg named the Colombian economy as one of the 15 poorest in the world, the Daily Telegraph has mentioned that it is one of the strongest in the region. Apparently it all depends on the eye of the beholder. How do you assess the Colombian economy in 2015, and what is your projection for 2016?
According to the Minister of Finance and Public Credit, Mauricio Cárdenas Santamaría, Colombia will continue to grow in 2015 by approximately 3.5%.
Despite the drop in oil prices, our country is still attractive for international investors, and that is why we are a country that is 70% importer and 30% exporter.
However, we appreciate the incentives and programs launched by the government in order to boost exports, especially regarding alternative production.
For example, and regarding the devaluation of our currency, we must make the best of the important free trade agreements that are already established, the most important of them being the agreement signed with the United States, our main trading partner.
We have to bear in mind that this agreement, signed in 2011, was born in the context of one of the worst moments in the history of the economy of the United States.
However, on the positive side, we have to acknowledge that there have been some remarkable investments, for example in the ports sector, which are helping us to face this new stage ahead of us, the growth that we are all waiting for as a result of being more competitive thanks to the devaluation and the infrastructure investments.
Colombia is expecting to enter the OECD by 2016. Minister Cárdenas told us that Colombia is “a very open country, that complies with all the standards set by this ‘Club of Best Practices’.” How will Colombia benefit from being a member of the OECD?
Just the fact of being invited to join is a token of the huge potential our country has.
Although in order to become a member, Colombia will have to adjust its tax system to reach the standard level of public expenditure demanded of all the member countries, there will be many benefits in return.
If we are accepted, we will be able to make great use of all the knowledge shared by the members of this prestigious organization, especially regarding best practices.
It will also be a seal of quality which will allow us to be present among the most important contexts in the global economy.
To be a part of the OECD would help us to grow as an equitable country.
Mr Villegas, former Ambassador to the United States, told us that the Pacific Alliance is one of the best regional integration initiatives in the last 100 years. What impact do you think it will have on Colombia?
Latin America has always been a continent of alliances. Even though all the countries that are a part of this alliance have a situation of steady growth in common, we still have areas of great poverty compared to other countries.
That is why it’s extremely important to join forces in order to create the necessary synergies to increase that growth even further, especially facing international markets.
Minister Albello Vives told us that Colombia “is a country of regions” and that she wishes to leave “a country that is competitive, in motion, that has progress and is always closer to its regions.” As someone born in Cali and raised in Barranquilla, what impact do you think it will mean to have a more connected country?
The administration of President Juan Manuel Santos has given a significant role to the infrastructure sector. We already have the first wave of initiatives to the amount of 9.8 billion pesos.
At this very moment we are building more than 8,000 kilometers of roads. Last year, in these premises, the project to recover the navigability of the Magdalena River was signed.
The work carried out by the Navelena Group will guarantee a depth of 40 feet in the access channel for the first two kilometers, and 37.5 feet for the rest of the channel.
These measures will give us unprecedented benefits and advantages in competitiveness. However, there are several aspects in which we must continue working.
When you take a look at the location of our companies, you will notice that they were not created with exporting in mind, which is why they are mostly located in cities like Medellin or Bogota.
When we move the goods to and from these companies we do it mainly by road, which is highly expensive, in some cases it’s the most expensive transportation in the entire region.
To move a container from Bogota to Barranquilla, for example, costs around $1,200, while moving it from a country like China to another big country like Brazil costs only $150.
That is why we need to create incentives for the companies to relocate their production lines in the areas near the ports.
I believe we are on the right track. However, together with the necessary investment in infrastructure, there has to be a change in our general mindset, so we can go ahead and try different possibilities with different means of transportation, and achieve the interconnection we long for.
Mr Andrade, from the National Infrastructure Agency, told us that the key to carrying out the 4G projects was, above all, the innovative ways for financing them, even more than the engineering aspects. He also told us that the ports are based on a model of public-private partnerships that were already being used before the existence of the new regulations created for the 4G. How is the ports sector assessing these partnerships?
In 1993, the ports and airports in Colombia were privatized, and as the country got more and more reliable in terms of taxes and security, foreign investment started to come and be a part of these new projects.
Because of that, we have seen a process of modernization of the financial system in the country. We currently have two large-scale banks with enough resources to meet the needs of the investors.
Additionally, we must consider the excellent way Colombia has handled its external debt, which allowed us to have access to international credit on very good terms.
Puerto de Barranquilla-Sociedad Portuaria is planning an investment of around 53 billion pesos ($3.1 billion) for 2015 in order to become a comprehensive logistics platform. In which areas and plans are you allocating those resources?
When we entered the port in 2013, we outlined an entire renovation plan. Thanks to a detailed exercise in strategic planning, we identified the priorities in terms of investment, in order to become a good logistics platform with the highest international standards.
Thanks to this we were able to identify 117 projects that, according to the needs of our clients, are mainly focused on acquiring new equipment, the improvement of the infrastructure, the strengthening of security issues, and the automation of processes.
Currently we are working on 29 projects, with an investment of around 53 billion pesos. This year we will open the first center for distribution and storage of frozen cargo, with more than 2,000 positions.
It will be the only one of its kind inside the premises of a container terminal in Colombia, facilitating the work for our clients, who will be able to make use of a more dynamic service in terms of customs procedures, as well as in logistics and cargo transportation.
It seems that this is already starting to make a difference. According to new figures, May 2015 was the month with the highest amount of general cargo in the history of the port.
Thanks to our corporate management we have been able to achieve great changes in the operations.
That allowed us to move, during the month of May, a total 134,000 tons of general cargo, an unprecedented figure in the history of the company.
These excellent results show us that we are on the right track, and that we will continue growing.
You work with containers, bulk, general cargo, and coke. A while ago you mentioned that you were interested in the business of liquids and hydrocarbons. Are you working in that direction?
That project is currently at a standstill because of the drop in international oil prices. I think that if we manage to get a strategic ally who is willing to invest in that project, it could become a reality. Right now we are investing in liquids, not hydrocarbons but vegetable oil.
Recently, Chancellor María Ángela Holguín highlighted the important role played by Barranquilla in making the best out of the FTAs, and mentioned that the city is “the port par excellence of Colombia”. Do you agree?
The strategic location of Barranquilla, in the corner of the Caribbean and the Magdalena River, makes it one of the gates into Latin America, and allows it to be connected with markets from the five continents.
Besides its excellent position on the map, it’s a city with a great capacity for both industry and exports.
Thanks to the collaboration and cooperation between the public and private sectors, alliances that are turning Barranquilla into a very important hub for logistics have been created.
Minister Cárdanas, and also the Minister of Trade, Industry and Tourism, Cecilia Álvarez Correa, have both talked about the goal of doubling the non-traditional exports to the United States in the next four years. Do you think this is possible?
The drop in the oil prices forced us to be more creative and look for new industries. Not long ago we had the chance to meet Minister Álvarez Correa and all the companies in the city gave us their support for that objective.
We are aiming, among other goals, for the recovery of exports from the agriculture sector, and many of our projects are intended to help in terms of the logistics.
We are also trying to develop the industry in the Atlantic coast area. The integration of the Caribbean region is crucial in this matter.
If we add the competitive advantages of other departments like Bolívar, Sucre, Córdoba, Magdalena, and Guajira, the potential is huge.
You have said that you feel like you have the best job in the world. What legacy would you like to leave to the city of Barranquilla?
When you understand the importance of the port for the city of Barranquilla, you can fully grasp the level of responsibility that a position like this involves.
The person in charge of the port is a public figure despite the fact that he works for a private company. You must use that importance for the good of the city, to make it more dynamic and achieve high levels of excellence and quality.
I believe that from this position I have the opportunity to affect the city in a positive way, and make a contribution to the outstanding development Barranquilla is experiencing right now.
Joe Arroyo used to sing “From the Caribbean it grows/Beautiful and enchanting/With ocean and river/A great society”. What is it that is so special about the people from Barranquilla?
I was born in Cali by mere chance, but I consider myself a person from Barranquilla, I have lived here since I was three years old.
This city has the blessing of being a city of immigrants; it belongs to everyone and to no one at the same time. It’s a city of productive opportunities, which gives anybody who wants to improve all the necessary tools to achieve their goals.
We are very hospitable people, and we worry about the wellbeing of everyone who comes to our city. Barranquilla is famous for the quality and diversity of its people. Without question, this is the best city in Colombia.