The manufacturing sector gradually resumes operations in Colombia

21 May 2020
According to the initial figures presented by José Manuel Restrepo, Minister of Commerce, Industry, and Tourism, the sectors that were reactivated in Colombia in the first week of May represented 60% of the country's GDP.

Thus, during the first week of gradual reactivation, nearly 3,840 companies in the manufacturing sector obtained validation for their biosecurity protocols. When combined with construction companies, the total of companies that have restarted operations surpasses 8,400.
 
Approximately one million workers in the construction and manufacturing sectors left confinement for the first time to begin work, and in Bogotá 152 building sites received approval to begin operations.
 
After announcing the two-week extension of compulsory preventive isolation until May 25, the government gave the green light for the gradual reactivation of new economic sectors.
 
The sectors included in this group are furniture, vehicles, machinery, and equipment. In addition, a gradual opening was announced for certain activities including the manufacture of computers, electronics, and optical devices; manufacture of machinery and equipment, maintenance and repair activities for technology and computer equipment and motor vehicles, and automotive diagnostic centers; wholesale and retail of vehicles (including parts and accessories), wholesale of furniture and household goods, wholesale of machinery and equipment; retail of pet products, retail of construction materials, hardware, locks, glass and paint products in specialized stores; retail of fuels, lubricants, additives, and automobile cleaning products in specialized stores; and retail of books, newspapers, stationery, and office supplies in specialized stores.
 
It is expected that by May 18, 100% of the manufacturing sector companies authorized on April 27 will be operating, and that by May 25 all the companies within the manufacturing and trade sectors newly authorized by the national government will be operating, as per reactivation targets.
 
As for the construction sector, recent figures from the Colombian Chamber of Construction (Camacol), assure that the return to regular activities in the sector has been a gradual and rigorous process in 90% of the country's municipalities, which has allowed work to resume on 50% of the projects, translating to 1,170 work fronts and particularly favoring the construction materials industry.
 
All companies, regardless of the sector, that have resumed activities or are in the process of doing so, must strictly adhere to the biosafety protocols laid out in Resolution No. 675-2020 and carry out the validation process with the corresponding local governments.

In Bogotá, following these new announcements, at least 2.5 million people are expected to return to the streets, with the reopening of at least 1,000 infrastructure companies and 3,000 manufacturing companies that were authorized by the district under the parameters established by the national government during quarantine.

Along these lines, three work schedules were defined in the Capital District for companies in order to reactivate the economy and guarantee the proper conditions for mobility and health safety: 10 a.m. to 7 p.m. for the construction sector, 10 a.m. to 5 a.m. for the manufacturing sector, and 12 m. to 12 a.m. for the wholesale and retail sectors.
 
These measures, together with a second package of initiatives from the national government that will be made public in the coming weeks (dealing with reductions to rental costs and payments related to labor costs as well as support for struggling companies, among other measures) represent an important means of support to the country’s economy and help to ensure the good health of workers.
 
It is hoped that this reactivation will allow the country's exports to markets that have already begun to open up to be resumed in the short term. In addition, campaigns such as Compra Lo Nuestro por Colombia are being run by the Ministry of Commerce, Industry, and Tourism and Colombia Productiva seek to encourage trade between Colombian companies, bringing supply and demand closer to local businesses.
 


Business opportunities


 
One of the sectors that will benefit in the short term from the economic reactivation is the automotive sector, since the Ministry of Transport has provided a tool to enable the registration and transfer of vehicle ownership over the internet without requiring face-to-face paperwork. This tool is the first step to reactivate vehicle sales in the country, which at the moment has a stock of approximately 8,600 vehicles and which previously had a favorable sales and exports forecast. (In 2019, 263,320 vehicles were sold, 3% more than in 2018, and vehicle exports added up to USD 570 million, 3% more than in 2018).
 
Perhaps most importantly, given that the United States is expected to tighten its foreign trade policies with China, causing many American industries to seek relocation to other countries, Colombia presents itself as an attractive destination for foreign investors given its economic stability and the existing free trade agreement with the United States.

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