Quite Formidable

What are your key achievements in terms of projects undertaken in recent years?

Coninsa Ramon H. is 40 years old, and is pursuing continued growth with marked results. One of our main achievements over the past two years has included participation in diverse infrastructure projects, and the opening of new branch offices in Santa Marta and Cartagena. While we have a formidable presence in Medellí­n, Bogotá, and Barranquilla, we need to establish ourselves in every part of the country where we have projects. We have been investing considerably in consolidating our processes, and in technology, which gives us a competitive advantage and reduces costs incurred by our customers.

Where are new technologies most evident in your operations?

We are working to control the cost of our projects, and having the most advanced programs to monitor these factors is important. Technology is also critical for generating sales. In addition to infrastructure, we are also working in the real estate sector, and there are technological tools that enhance the selling process significantly. So it is not a hard investment in technology, such as new equipment or machinery, but rather an investment in soft technology.

Coninsa Ramon H. has a significant presence on the Caribbean coast. What projects are attracting interest from external investors?

A slew of large infrastructure projects in the region are attracting foreign investors to Colombia. Five years ago, 80% of the attendees at local construction and infrastructure conventions were from Colombia. In stark contrast, these days, around 60% are from abroad. This reflects a surge in interest from foreign investors, be they contractors or builders, seeking opportunities in Colombia. The Caribbean region in general is growing. For example, net sales of new properties last year in Barranquilla grew by about 25% over the previous year.

Is the changing balance of foreign investors specifically in infrastructure projects?

The influx of internal investment started with infrastructure, but lately investors are moving into real estate as well. There has been a change in their risk perception. Initially, they had been looking for constructed buildings already generating rental income. But now, we have seen that these investors are coming to companies such as ours looking for off-plan projects, where the selling process has not even begun. They are beginning to consider the risk worthwhile, which is logical because with higher risk comes higher return.

How does Coninsa Ramon H. collaborate on an international level, and what do you look for in strategic alliances?

For Coninsa Romon H. the future looks bright, because we have experience in establishing both local and international alliances. And one of the key requisites that underpin such alliances is project viability from start to completion. Prioritizing the project over the various partners ensures that the project at hand is successful. This keeps the relationship between the local and international investors from collapsing because the goals are always well defined.

Why do you feel that foreign investors and multinationals have not been as successful, or persevered with the majority of infrastructure contracts in Colombia?

Our company was appointed to participate in four such projects. One of those was with a Chinese company that was bidding with us, but it ultimately opted not to go ahead with the proposal, which prevented any of the local companies that had partnered with it from participating. Many foreign investors seek out local partners to gain the on-the-ground knowledge necessary to attain the projects they seek. Unfortunately, not too many investors from abroad have first-hand experience of closing deals. Generally speaking, multinationals seem to feel that they are taking on too much risk and are therefore unwilling to meet their financial obligations.

What are the key infrastructure projects that you are involved in this year?

We are working on two major infrastructure projects. One is the Ituango hydroelectric project, which is the largest hydro project in the country, and on which we are partnering Brazilian company Camargo Corea as well as Conconcreto. The second infrastructure project is the Tunel del Oriente, which is the tunnel that connects Medellí­n with the east.

Coninsa Ramon H. hopes to double the property it owns by 2017. What is the strategy behind that?

The decision was made five years ago, and we are close to achieving that goal. One of the strategies that we adopted was to concentrate on reducing our own costs, and those of our customers. The second was a growth strategy based on establishing branches in other cities around the country. Coninsa Ramon H. has four strategic business units. We have real estate, which includes housing and renovations, and we also engage in rental property, where we are the management and agent for the property owner. With regard to that business, we manage around 5,600 homes. Our other units are housing, housing construction, and infrastructure and the public sector. These strategic departments rather resemble the four engines of a jet in so much as if one business unit sees a decline the others pick up the slack.

What needs to be done to improve public private initiatives (PPIs) in the construction sector, and in infrastructure projects?

PPIs are on the verge of taking off in Colombia. Three years ago, if you looked at the white pages, the government might be soliciting bids for around 28 PPIs. However, these days there might be around 220 PPIs—the government has been obliged to demonstrate their viability in Colombia. At the end of last year, the government started awarding the first PPIs and I am optimistic of their potential for success.

What are your expectations for Coninsa Ramon H. in 2015?

We do not expect notable growth this year, as macro economic conditions changed late in 2014 with the devaluation of the peso and decline in oil prices. For example, GDP, forecast growing by 4.2%, registered 3.8% growth. Our commercial tempo is encouraging, however, and we have no need to sign new contracts in order to generate positive results. That being the case, we are ever on the lookout for potential developments that could advance our position in the local market.

© The Business Year – March 2015