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Colombia's Golden Triangle—Biodiverse and Market-friendly
By: Nancy Jeffries
Posted: April 27, 2012, from the May 2012 issue of GCI Magazine.
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This—combined with free trade zone incentives, no import duties and no restriction of sale to domestic markets—has added to the region’s appeal, according to Concha Prada. An emphasis on beauty/cosmetics/personal care (among other product types and industries), a growing pool of skilled labor and increasing harmonization between Latin American countries remain among the key drivers for investment.
Biodiversity and Multinational Presence
As the fifth largest beauty market in Latin America (according to data provided by Proexport), a geographic location placing it between North and South America and with more than 50,000 known plant species (18,000 endemic and 12% found to have medicinal properties), Colombia is poised to leverage its position as a center of biodiversity. Ongoing research into the biodiverse regions of the Amazon and the Caribbean continues to yield scientific breakthroughs. In the Cundinamarca region of Colombia surrounding Bogotá, 3,000 tons of medicinal plants are produced each year, while universities specializing in research in biotechnology and natural ingredients support further study of the properties and potential of these materials, largely for the cosmetics and agri-businesses.
In fact, multinational fragrance/ingredient suppliers with a presence in Bogotá and the Cundinamarca region include Symrise, IFF, Firmenich, Givaudan, CPL Aromas, Iberchem and Lucta, and many of these companies using Bogotá and Cundinamarca as hubs to distribute to Andean, Central American and Caribbean countries. Regional opportunities enhanced by climate, location and access include the Caribbean and the Valle del Cauca—where Johnson & Johnson, Unilever, P&G and Colgate-Palmolive have an established presence.
Numerous institutions of higher learning, bilingual education and unified determination to sustain academic excellence and scientific research are being supported to harness the potential of the country’s natural resources to create effective cosmetics based on abundant plant life—and, beyond that, to conduct genetic research on a variety of native species to ultimately sustain farmers, communities, and future generations with healthy, sustainable crops.
The beauty sector in particular, through its utilization of natural ingredients, has seen notable growth in, among other categories, makeup and hair color, and companies such as Avon, Henkel, Yanbal, Belcorp, P&G and Unilever have established production facilities in the region. These multinationals have made investments of more than $35 million for the expansion of their production plants, and foreign beauty companies represent 75% of the total market. Distribution by Natura, Amway, L’Oréal and Wella also is centered in the region.