Metalworking sector 2016

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METALWORKING SECTOR

Transcript of Metalworking sector 2016

Page 1: Metalworking sector 2016

METALWORKING SECTOR

Lib ertad y Orden

Page 2: Metalworking sector 2016

COLOMBIA IS A STRATEGIC LOCATION FOR THE DEVELOPMENT OF PRODUCTIVE PROJECTS IN THE METALWORKING INDUSTRY

Between 2004 and 2014, the steel demand in Colombia increased more than 2 times,reaching a consumption of 4.2 million tons.

9% sustained annual growth in steel consumption in recent years in Colombia, above the average in Latin America with expectation to reach 7 million tons in 2020.

Colombia is the country with the best prospects for growth in the consumption of rolled steel products, with a consumption increasing 49% over the last 4 years.

Between 2010 and 2014the highest growth in Latin America (above that of Mexico and Brazil) with 31%, reaching 80 kilograms. It is expected a per capita consumption of 108 kg in 2020.

2010

2,8 3,2 3,3 3,54,2

5,05,9

7,0

2011 2012 2013 2014 2016e* 2018e* 2020e*

APPARENT CONSUMPTION OF ROLLED STEEL PRODUCTS IN COLOMBIA

Millions of tons

Source: ALACERO, 2015 e = estimated by ProColombia

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A REGIONAL MARKET OF 70 MILLION TONS, WHICH CAN BE REACHED WITH ZERO TARIFFS FROM COLOMBIA

Latin America is the fourth largest consumer of rolled steel products in the world in 2014 with 70 million tons.

It is expected that the consumption of rolled steel products in Latin America reach 72 million tons in 2016 and 80 million tons in 2020.

More than 8 million tons of rolled steel products are imported in Latin America.

13 commercial agreements

1.5 billion consumers.

Exports of steel and metal work products from Colom-bia have preferential access in the main consumption markets in Latin Ameri-ca and lower-than-average charged to other countries in the region.

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COMPETITIVE PRODUCTION COSTS AND EASY ACCESS TO RAW MATERIALS

Wages in the industrial sector in Colombia are the second lowest in Latin America (IMD World Competitiveness Yearbook, 2015). Wages are 24% lower than the Latin American average and 71% lower than those on the continent.

Colombia's gas cost for industry is 30% cheaper than Brazil, Ecuador and Chile.

Colombia has more than 7 areas related to the metal working industry (mining, metallurgy and related) and more than 100 thousand graduates in careers such as electrical, electronic and mechanical engineering.

reserves of metallurgical coke exceed 530 million tons.

Opportunities of raw materials from Brazil and Mexico with logistic facilities to import to Colombia.

PRICE OF ELECTRICITY FOR INDUSTRY, 2014 (USD Cent/kWh)

United States

7.0 7.5 8,7 9,6 10,0 11,3 11,5 11,6 12,0

17,9

Peru Brazil Ecuador COLOMBIA Costa Rica Chile COLOMBIA COLOMBIA* Mexico(Level 4) (Level 3)

Source: Consejo Privado de Competitividad Colombia. Informe Nacional de Competitividad 2015-2016.* Industrial rate for monthly consumption higher than 500,000 kWh

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OTHER FACTORS TO INVEST IN THE SECTOR

Incentives such as Free Trade Zones, a Stimulus Plan for productivity and employment, and incentives for job creation that reduce production costs for companies present in Colombia and that serve the domestic market and export from Colombia.

demand for steel products.

which translates into higher sales of automobiles, appliances and houses, encourages industries in these sectors to demand more steel products

building construction allowing to increase the per capita consumption of steel in Colombia.

More than 500 companies dedicated to the sale of steel products, creating a broad commercial channel within the country.

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MAJOR FOREIGN COMPANIES HAVE CHOSENCOLOMBIA ASA DESTINATIONFOR INVESTMENT

the world, with an investment of USD 240 million and a new heat treatment, threaded and termination lines, opened in 2015 the Tenaris TuboCaribe produc-tion center in Cartagena, expanding the total production capacity to 250 thousand tons per year, with 27,000 m2 of new industrial facilities and 4,000 tons of state-of-the-art production equipment.

With the acquisition of the Ferrasa company and the investments to enlarge the 130.000 m2 plant in Manizales, the Italian-Argentine company Ternium from the Techint Group produces 200.000 tons of liquid steel each year which are transfor-med into corrugated, reinforced bars, plates, angles – for electrical towers – and gutters, products which are used in construction, infrastructure and autoparts. Ternium provides 20% of Colombia's steel consumption.

precision parts, decided to open a plant to cater for the market in the Americas, showing that the main reason to have a presence in Colombia was the quality labor