Investment Promotion Agency for Quibd贸 and Choc贸 BPO Sector
2015
Index
• Introduction to Invest in Chocó
• Introduction to Quibdó and Chocó • Why is Quibdó an attractive city for the BPO sector? 1. A successful case already exists
2. Human Capital is competitive in quality and costs 3. Has the required infrastructure and spaces 4. There is a large inter-institutional support and incentives
5. It is possible to add value to your business by generating social impact
2
Invest in Chocó: The Investment Promotion Agency (IPA) for Quibdó and Chocó, has three strategic roles • Promotion of 3 pro-active sectors(BPO, tourism and Commerce) • Investment facilitation • Investment permanency
Institutional reinforcement and articulation
3
IPA is composed of 3 partners and it is supported by national and international institutions
Partners
Managers
Strategic Partners Comisi贸n Regional de Competitividad e Innovaci贸n del Choc贸
4
Index
• Introduction to Invest in Chocó
• Introduction to Quibdó and Chocó • Why is Quibdó an attractive city for the BPO sector? 1. A successful case already exists
2. Human Capital is competitive in quality and costs 3. Has the required infrastructure and spaces 4. There is a large inter-institutional support and incentives
5. It is possible to add value to your business by generating social impact
5
About Quibdó and Chocó..
• • •
• •
Capital City: Quibdó 716 km of Pacific Cost Population (30 municipalities): – Chocó: 500.093* people (82,12% African descendents, 12,67% Indigenous people) – Quibdó: 115.711* people (91,63% African descendents, 1,38% indigenous people) Climate Data: 77.2ºF – 85.9ºF Conectivity – Air: Seven airports connecting with seven cities in Colombia (171 flights weekly From / To Quibdo) – Terrestrial: Two main highways to Medellín and Pereira
Not: *Population Projection 2015. Source: DANE en www.dane.gov.co Source: IGAC, DANE, Profile of Quibdó. Available in: http://www.fcm.org.co/appfichamun/pdfs/ficha_27001000.pdf; Semana Magazine: Especial “Somos Pacífico” November 2011
6
Chocó's economy has shown a remarkable development in recent years During the 2002-2012 Choco’s GDP grew 6,7% on average, while the national GDP increased by 4,3% **
Seven out of nine economic sectors categorized by DANE (National Administrative Department of Statistics of Colombia) grew in 2012
National GDP against GDP of Choco 2002-2013p*
4.000
25%
3.500
Millions of pesos
15%
2.500 2.000
10%
1.500
5%
1.000 0%
500
0
-5%
Chocó ( Constant National Currency Colombian peso 2005) Chocó ( nominal Colombian Peso)
Percentage Growth
20%
3.000
Variation 2012
Variation 2013p
Construction
9,0%
28,2%
Finance, insurance, real estate establishments and business services
7,5%
1,4%
6,0%
10,1%
3,0%
3,8%
4,2%
4,0%
3,1%
4,8
1,1%
4,2
Manufacture Industry
0,0%
-3,3
Mining and Quarrying
-14,3%
-30,5
Activity
Social, community and personal services Transport, storage and communications Electricity, gas and water Commerce, reparation , restaurant services and hotels Agriculture, hunting, artificial and natural fishing
Chocó (Real) - Right Axis
Colombia (Real) - Right Axis
Note: *2013p: Chocó Preliminary Data, **CAGR 2002-2012 Source:, DANE; Hamkke Analysis
7
Index
• Introduction to Invest in Chocó
• Introduction to Quibdó and Chocó • Why is Quibdó an attractive city for the BPO sector? 1. A successful case already exists
2. Human Capital is competitive in quality and costs 3. Has the required infrastructure and spaces 4. There is a large inter-institutional support and incentives
5. It is possible to add value to your business by generating social impact
8
Index
• Introduction to Invest in Chocó
• Introduction to Quibdó and Chocó • Why is Quibdo an attractive city for the BPO sector? 1. A successful case already exists
2. Human Capital is competitive in quality and costs 3. Has the required infrastructure and spaces 4. There is a large inter-institutional support and incentives
5. It is possible to add value to your business by generating social impact
9
For more than a year Atento has had an operating contact center in Quibdo, with outstanding results
1
A successful case already exists
• Contact Center Customer Service for Mobile Telephone Companies, in Quibdó. • Opening: May of 2013
• Number of Employees : 83
Main indicators :
5.5%
76%
78%
… of rotation vs 12% of national average
…of permanency
…of productivity
after 6 months
(Average value)
Which represented a COP$30M cost reduction per year
2
100%
330 segundos
…upgrades (period
…of customer satisfaction
... average response time(TMO)
between 4-6 months)
Source: Data from May-Jun 2014, Atento Colombia
80%+ ...Service quality
10
Atento has young local employees with 7 key virtues: Employees Demographics* • Young Employess Employees Distribution by Age
>32 years 19%
27- 37 years 27%
18-26 years 54%
• 100% are African descendents
1
A successful case already exists
Employees Virtues** In addition, African Descendents are skilled in adopting new technologies ***
Available and eager to learn
Adaptable to the work ambience
Punctual The employees of Atento Quibdó are characterized for being…
Respectful
Committed
• 50% are women - 42% are Mothers, 1/2 of them are single mothers
Grateful
Source: *Data: May-Jun 2014, Atento Colombia; **Research Results of African Descendents Inclusion Program by USAID and ACDI VOCA, October 2013; *** African Descendents Population Research, Brandasset Consulting for ACDI VOCA, 2013
12
Index
• Introduction to Invest in Chocó
• Introduction to Quibdó and Chocó • Why is Quibdó an attractive city for the BPO sector? 1. A successful case already exists
2. Human Capital is competitive in quality and costs 3. Has the required infrastructure and spaces 4. There is a large inter-institutional support and incentives
5. It is possible to add value to your business by generating social impact
13
According to the Population Aging Distribution, 32% are between 15 - 29 years old
2
Human Capital is competitive; quality and costs
Population Aging Distribution in Chocó, 2015
80 Y MÁS 75-79
70-74 65-69
60-64 55-59
50-54 45-49
40-44
Mujeres
35-39
Hombres
30-34 25-29
20-24 15-19
10-14 5-9
0-4 40.000
30.000
20.000
10.000
0.000
10.000
20.000
30.000
40.000
Source: Population Estimation 1985-2005 and National Population Projection 2005-2020 , Settle by demographic data gender, five-year age groups observed; Graphics and Estimations by Hamkke
14
Since there is a high unemployment rate, the employment supply is large
Human Capital is competitive; quality and costs
2
Global rate of Participation (TGP), occupancy rate (TO) and Unemployment (TD) Quibd贸. 2009-2015. (March-May) 65 70 60
62,1
59,1
56,0
52,4
59,6
58,2
57,8
55
50
45
50,2
46,8
40
43,3
49,8
48,1
48,0
49,3 35
% 30
25 %
20 10
19,2
16,5
17,4
15
19,4
18,9
15,4
13,7
TGP
TO
Mar - May 15
Sep-Nov 14
Mar - May 14
Sep-Nov 13
Mar - May 13
Sep-Nov 12
Mar - May 12
Sep - Nov 11
Mar - May 11
Sep - Nov 10
Mar - May 10
Sep - Nov 09
5
Mar - May 09
0
TD
Population of Quibd贸 2015p: 115,711 people
Source: DANE: Main labor market indicators, March 2014; DANE: Projected population in 2015
15
In Choc贸, there are 8 Third- Level Education Institutions willing to support the private sector
2
Human Capital is competitive; quality and costs
79% of all academic programs are offered in Quibd贸, the capital City Source: Analysis of the regional projects impact on the labor market of Choc贸, Choco-OSCH Social Observatory, 2013
16
…where programs are offered in 7 of the 13 areas of relevant knowledge to the BPO sector, according to ANDI Areas of relevant knowledge to the BPO sector, according to ANDI
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
11. 12. 13.
Business Management Public Accounts Law and related Economics Nursing Engineering and related Civil engineering and related Systems engineering, telematics and related Electric and Related Engineering Electronic engineering, telecommunications and related Industrial engineering and related Mechanical Engineering and related Medicine
Source: ANDI; Ministry of Education
2
Human Capital is competitive; quality and costs
Education programs in Chocó Third-Level Education 1. Business Management 2. Public Accounts 3. Law and related 4. Economics 5. Nursing 6. Civil Engineering and related 7. Systems engineering, telematics and related Technical Education 1. Business Management 2. Public Accounts 3. Civil Engineering 4. Systems engineering, telematics and related
17
Approximately 3,400 (Accumulated terms) people have graduated from higher education programs relevant to BPO in the last 12 years
2
Human Capital is competitive in quality and costs
Graduated 2001-2013 - Total: 115,629
Technicians 2,1% Technologists 4,3%
Master 0,1%
4,347 graduated (university level) from relevant programs for BPO 1.680
Management
Specialization 6,8%
38,6% 804
Law 18,4%
741
Public Accounting 17% 450
Nursery 10,3%
415
Systemas Engineering 9,5% Civil Engineering
University 86,6%
Note: figures only consider institutions reporting to the Ministry of National Education Source: Ministry of Education
Economy
256 5,8% 1 0,02%
18
To fulfill investors needs, Invest in Choc贸 will formulate alliances with other institutions to develop human capital
+
2
Human Capital is competitive; quality and costs
International Cooperation Agencies and NGOs
Third-Level Education Institutions
19
Given the characteristics of the population, the investors can take advantage of established incentives
2
Human Capital is competitive in quality and costs
Discounts on income taxes and supplementary fiscal contributions as well as other payroll contributions (Does not include jobs created by mergers or replacements) Target Population for Incentive Benefits
Duration employee benefit
New Employees under 28 years old.
2 years
New certified employees in displacement, reintegration or handicap conditions.
3 years
New female employees over 40 years old with 1 year of unemployment
2 years
New employees who earn less than 1.5 times current minimum legal wage
Source: Proexport
In Quibd贸 According to national statistics, the highest unemployment rate is conformed by single mothers. Also, young people graduating from education systems, technical, technological and third- level education are unemployed (DANE 2010). approximately 47.5% of population are in displacement
2 years
Population in extreme poverty conditions: currently has prioritized focusing on 4,563 families. Among these families, 60% are headed by women. The total number of families corresponding to 19,021 persons, of whom 52.9% are women, 39.6 % are in a situation of displacement and 44.9% are minors eg. early childhood and adolescence.
20
New investors can benefit from local incentives provided by Quibdo´s Government such as: •
•
2
Human Capital is competitive; quality and costs
Tax exemption from Industry and Commerce and Unified Property to property that is intended for the operation of new productive employment companies *. According to the following scale: Number
Unemployed
Exoneration years
1
10 a 20
5
2
21 a 25
6
3
26 a 30
7
4
31 a 40
8
5
41 a 50
9
6
50 ≤
10
Tax Exemption from Industry and Commerce and a term of 10 years for new businesses located either in expanding urban areas or defined as corporate relocation in the POT.
*Productive Employment:Companies who recognize and fullfill social securities according to current labour law . Source: Agreement 001, 28th of February 2015. Quibdó. Fiscal year 2015.
21
Index
• Introduction to Invest in Chocó
• Introduction to Quibdó and Chocó • Why is Quibdó an attractive city for the BPO sector? 1. A successful case already exists
2. Human Capital is competitive in quality and costs 3. Has the required infrastructure and spaces 4. There is a large inter-institutional support and incentives
5. It is possible to add value to your business by generating social impact
22
Quibdó has good Internet and Telecommunication services, which will improve significantly in the short term • Main Internet and Telecommunication services provider in Quibdó • 90% of territory coverage Quibdo. cable and satellite Connection ensures good availability and redundancy • Provides channels : - Internet up to 8Mbps broadband through copper wiring Dedicated Internet (no reuse) of up to 50Mbps via copper cabling or fiber optic (internal, short range) - Service availability, installation costs and rates restricted to specific conditions or prior study of the project / operation
Rates* Internet broadband
internet Rates
Speed (Mbps)
Rate* (COP$ / Month)
Speed (Mbps)
Rate* (COP$M / Mes)
2
109,900
5
2.02
4
127,900
10
2.55
6
137,900
20
4.18
8
187,900
30
5.82
40
7.55
50
9.40
3
Quibdó has the required infrastructure and spaces
• A new optical fiber node will be ready in August 2014 • This node comes from Risaralda and belongs to the National Optical Fiber Project Azteca Comunicaciones Colombia is in charge of the web instalation and operation. • More details coming soon
• Mobile Phone Operators Claro and Tigo mobile have good coverage in the region
Invest in Chocó will support investors in achieving Internet and Telecommunication services
Note: * estimated figures from firms subject to prior studies and negotiations Rates, Aug 2014 figures, excluding VAT Source: Telefonica and Mayor of Quibdo, interviews with staff
23
It also has an electric energy service, with low cost and good quality. 100% of the territory enjoy its coverage • It distributes and sells electricity in Quibdo since 2002 • 100% coverage • Completely renovated System and evolving distribution • Investment in web improvement of ~COP$34,000M & COP$21,000M in 2013 & 2012 respectively • Ring Connection to 2 National Channels (La Virginia y Bolombolo) from Apr-2014 - Continuity levels are about *99.6% • In 2014 they offered the 6th lowest cost among 24 major electricity providers in the country • voltages offered : 110-127V, 208-240V y 13.2kV • Available Capacity 1MW • Short circuit currents ~8-9 kAmp (red 13.2kV)
Nivel de continuidad* energía eléctrica Quibdó Trimester
Continuity level*
3er Trim. 2013
99.43%
4to Trim. 2013
99.40%
1er Trim. 2014
99.31%
2do Trim. 2014
99.60%
3
Quibdó has the required infrastructure and spaces
Comparativo CU** entre empresa / regiones Promedio CU** Ene-Jun 2014 (COP$ / kWh) Empresa de Energía del Valle del Sibundoy
461
Empresa de Energía del Bajo Putumayo
460
Centrales Electricas de Nariño
444
Empresa de Energia de Boyaca
440
Empresa de Energía de Cundinamarca
439
Electrificadora del Caquetá
439
Enertolima (Tolima)
426
Empresa de Energía de Casanare
419
Empresa de Energía del Putumayo
418
Electrificadora del Meta
414
Electrificadora del Huila
412
Compañia Energética de Occidente (Cauca)
412
Empresa de Energía de Arauca
408
Centrales Eléctricas de Caldas
395
Empresas Municipales de Cali
388
Centrales Eléctricas de Norte de Santander
388
Empresas Públicas de Medellín (Antioquia)
386
Empresas Municipales de Cartago
384
Empresa Distribuidora del Pacífico (Chocó)
382
Electrificadora de Santander
381
Codensa (Bogotá)
370
Empresa de Energía del Quindío
367
Empresa de Energía de Pereira (Pereira)
347
Empresa de Energía de Pereira (Caldas)
340
Invest in Chocó will support investors in achieving energy services Note: *Continuity Level: % of regular operating time; **Unit Cost of Electricity, reference price (applies for layer houses 3, companies must pay an additional 20%). Source: Dispac, management reports and interviews with staff
24
The construction sector has had a steady growth in recent years
Licencias y área aprobada en Quibdó 2009- 2012 +33.4% 34.242
40.000 30.000
+14.7% 25.673 22.388
+66.7%
20.000
200 Salud 1,5%
150
Educación 3,8%
100
Admon. Pública 4,6%
50
0
0 2009
2010
2011
Quibdó has the required infrastructure and spaces
Distribución Área Aprobada en Quibdó Acumulado 2009-2012
13.432
10.000
3
Otros 5,2%
Comercial 15,4% Vivienda 69,5%
2012
Área en m2 (eje izquierdo)
Additionally, there is good availability of batches that would be suitable for the construction of BPO operations. Invest in Chocó will assist investors in achieving lots Source: ICER, Informe de Coyuntura Regional 2012. DANE.
25
Finally, Quibdó’s airport offers good connectivity with the county’s main cities
3
Quibdó has the required infrastructure and spaces
Airlines
Rute
Daily Frequency
Days
LAN
Bogotá - Quibdó - Bogotá
1
Monday to Sunday
Easyfly
Bogotá - Quibdó - Bogotá
1
Monday to Sunday
Easyfly
Medellín - Quibdó - Medellín
11
Monday to Sunday
ADA
Medellín - Quibdó - Medellín
2
Monday to Sunday
ADA
Quibdó - Bahía Solano - Quibdó
2
Tuesday - Thursday- SaturdaySunday
ADA
Quibdó - Pereira-Quibdó
1
Monday – Wednesday- Friday
ADA
Quibdó - Nuquí - Quibdó
1
Monday – Wednesday- FridaySunday
Satena
Bogotá - Quibdó - Bogotá
2
Monday to Sunday
Satena
Medellín - Quibdó - Medellín
4
Monday to Sunday
Satena
Cali - Quibdó - Cali
1
Monday – Wednesday- Friday
AEXPA
Pereira - Quibdó - Pereira
1
Monday to Saturday
In El Caraño, Quibdó’s airport, 171 flights operate weekly Fuente: Airplan, Febrero 2014
26
Index
• Introduction to Invest in Chocó
• Introduction to Quibdó and Chocó • Why is Quibdó an attractive city for the BPO sector? 1. A successful case already exists
2. Human Capital is competitive in quality and costs 3. Has the required infrastructure and spaces 4. There is a large inter-institutional support and incentives
5. It is possible to add value to your business by generating social impact
27
There is a huge inter institutional support that investors can take advantage of •
4
There is a large interinstitutional support and incentives
The IPA has become a key initiative to positively impact the economic and social development of the region. Thus the Quibdó City hall, the Quibdó Chamber of Comerce and the Govenment of Chocó actively support the agency. – They constitute the governing body and are members of the directive board – They give resources for the Agency’s operation – They connect the Agency with private and public actors In the national level, the IPA has had a big impact as it has become a competent actor which allows to connect regional and national initiatives, such as: Excellent relations with PROCOLOMBIA, Government agency that not only provides “leads” but is also interested in improving the public management through training and better practices promotion. Good connection with the Nacional Planning Department, which has included Quibdó in the “Regional Doing Business” thanks to the IIC – Important articulation with the Private Counsel for Competitiveness, which is a partner of the API on regional clusters
28
Quibdó counts now with a renewed public administration willing to generate a culture on transparency and legitimacy
4
There is a large interinstitutional support and incentives
IGA* results for Alcaldía de Quibdó
* The Índice de Gobierno Abierto (IGA) is an indicator which measures the appliance of anticorruption law.
Creation of the “Cabinet of equials” to support the role of the public administration.
Improvement on the fight against corruption
Source: Procuraduría. Secretaría Técnica Gabinete de Pares. 2014
29
There are government incentives for Choco that can benefit your investment
4
There is a large interinstitutional support and incentives
Available tools to promote the operation such as:
• • • • • • •
Exporting services benefits (Vallejo Plan for the exportation of services) Intellectual property rights Hábeas Data Law Tax exemption on added value (VAT) for services generated from Colombia Possibility to apply for a free trade zone regime. First employment law (Ley del Primer Empleo) Teleworking
Sorce: PROCOLOMBIA
30
Index
• Introduction to Invest in Chocó
• Introduction to Quibdó and Chocó • Why is Quibdó an attractive city for the BPO sector? 1. A successful case already exists
2. Human Capital is competitive in quality and costs 3. Has the required infrastructure and spaces 4. There is a large inter-institutional support and incentives
5. It is possible to add value to your business by generating social impact
31
Finally, there is a great opportunity to add value to your business while generating social impact
5
It is possible to add value to your business by generating social impact
Chocó
Colombia
Source/ Year
GDP per cápita
US$3.261
US$8.065
DANE / 2013
population below poverty line (Poverty Rate)
63,1%
30,6%
DANE / 2013
population below extreme poverty line (Extreme Poverty Rate)
35,6%
9,1%
DANE / 2013
Gini Coeficient
0,603
0,539
DANE / 2013
Unemployment Rate
14,1%
8,9%
DANE / February 2015
Illiteracy Rate
24,2%
9,6%
Ministry of Education / 2005
Unsatisfied Basic needs rate
82,8%
27,6%
DANE / 2005
School Drop –Out rate
15,4%
4,8%
Ministry of Education / 2010
Housing Deficit rate
92,4%
36,2%
DANE / 2005
Displaced Population
312.182
5.700.381
Ministry of Interior / July 2014
*The per capita GDP in Chocó (US $ 3.692) is comparable with the per capita GDP of El Salvador (US $ 3.790) or the poor countries of Africa and Republic of Congo (US $ 3.151) - DANE, WB / 2012
It is conclusive that the opportunity to generate social impact is truly transformative and profound 32
Impact is generated in business, in individuals and in the region in general
Business
individuals
Región
5
It is possible to add value to your business by generating social impact
• Provide high quality service at lower costs (aprox. 40% less) due to: • Lower wages, • Less training costs • Low employee rotation • The low employee rotation allows to deliver consistent quality service • It allows to diversify your services portfolio • Your investment could be aligned with your CSR policies as you work on: inclusion, diversity and private role in Colombia’s post conflict.
• Increase in wages (data suggests a 40% to 200% increase*) • Know how transference • Offers formal and stable work, which allows families to invest in education and health confidence
• BPO operations in Chocó would increase investment confidence in the region and impact its economic development: higher formal employment, higher quality of life, impact on territorial marketing and better investment climate
Source: * Rockefeller Foundation: “What is Impact Sourcing?”
33
Thank you! Informaci贸n de Contacto: Mariela Palacios, Directora Ejecutiva mariela.palacios@investinchoco.com Tel. (57) 4 670 9047 Ext. 135 Calle 26 No. 2 - 51 Quibd贸, Choc贸 - Colombia
34