Februari 2008: Nieuwsflits Panama
From Handelswijzer Midden-Amerika van de Koninklijke Nederlandse Ambassade te Costa Rica
Embassy visit to Panama 18-22 February 2008
Deputy Head of Mission (DHM) of the Dutch Embassy in Costa Rica responsible for Panama , Carel Richter visited fellow DHM of main embassies, governmental counterparts and Dutch businessmen in Panama. The aim was his introduction and preparing and promoting the upcoming Holland activities (Expo Comer, Arrival of KLM, Rembrandt exhibition, Holland trade day and the Queens birthday) , during the month of April. Subjects and possible niches for the Netherlands such as the energy market, social corporate responsibility, city planning and the Panama Canal were explored.
Call for participation at ExpoComer on 05-08 March
The Dutch Embassy will be present at the Expocomer Fair on 05-08 March. The fair will host an exhibition area of 1000 stands, where national and international businesses from almost 40 countries will exhibit their supplies and demands, as well as the services and products in the following areas: food & beverages, textiles & accessories, services, technology and construction. The fair offers a unique opportunity to establish business contacts with businessmen, high ranking multinational executives, products and services suppliers, government authorities, international companies and agencies, seminars, among others. The organization of this fair is in the hands of the Panama Chamber of Commerce. For more information or participation you can visit the website: www.expocomer.com or contact our Consulate-General in Panama, Mr. Jaime Jaen, Tel.: 00507 263 6494 or 00507 264 7257. Dutch companies which cannot be present may wish to send folder material etc. through the Consulate-General. Email: consuladonl@cwpanama.net or jaimejaennl@cwpanama.net
U.S. recession to affect Panama Canal trade
Source: Reuters
Trade through the Panama Canal dipped in the last three months of 2007 amid a downturn in the U.S. economy, weak dollar and high oil prices, canal officials reported. The tonnage passing through the canal dropped 2% to 79.0 million PC/UMS. Ship transits fell 1.4% to 3,518. Canal officials say the figures point to a drop in the volume of manufacturing exports to the United States, in response to slowing consumer demand. Toll revenues should reach $1.30 billion this year, compared with $1.18 billion in 2007, an increase of 10%. Many of the gains are expected to come from increased transit fees. In January toll revenue had increased in the previous three months by about 8,4 % to $300 million. The Panama Canal accounts for about 20% of Panamanian gross domestic product and its toll revenue accounts are the largest contributor to the national budget.
Panama Canal updates marine service fees
Source: Maritime Global Net
Rising operating costs due to fuel hikes has led to the announcement by the Panama Canal Authority (ACP) for revised fees for tug, locomotive and line handling services starting March 1. Rates for tug services will increase 8%; rates for line handling services will rise 7%. Additionally, a $300-per-wire fee will be charged for ancillary locomotive services, up from a $200-per-wire fee (wires are attached to the locomotives to ensure that the vessels stay centered as they transit through the locks).
Advisory Board reviews Panama Canal enlargement
Source: Prensa Latina
The Advisory Board of the Canal management, made up by international experts, regarded as leaders with exceptional experience in transportation, world trade, telecommunications, construction, banking, and businesses came together this month to review the expansion project. Several sites were visited which will allow them to make recommendations for the good development of the project.
“Mega-Port” at Farfan less likely
The bidding to build and run a "mega-port" at Farfan, adjacent to the former Howard Air Force Base, could be cancelled. Two of the four qualified bidders, Maersk and Singapore PSA Corporation have dropped out of the competition. Maersk signed a long-term deal with Panama Ports Company and PSA will develop their own container port at Rodman. The other two companies, China Overseas Shipping Corporation (COSCO) and Marine Terminals Corporation, are considering teaming up to present the Panama Maritime Authority (AMP) with a joint proposal. If proposal is submitted and accepted, Dutch business opportunities within the maritime sector should be plentiful.
Port activity in Panama grows 37%
Source: Business News Americas
Panama's port network handled over 4 million containers (TEUS) in 2007, up 32.2% when compared to 2006 according Marítimo Portuario. The Panamanian government received US $36 million from the operations, as each container must pay US$9 for port services. Balboa and Cristóbal ports have the fastest growth levels in the country. Panama Ports Company (PPC) attributed their performance to its US$ 500 million investment program it started several years ago to attract more clients. Balboa ports is executing phase 4 of a $300 million investment program and Cristobal is executing phase 1 of a $200 million program. PPC added shipping lines APL, MOL and Zim to its roster of clients and is currently receiving one post-Panamax vessel a week from Maersk. Cristóbal port saw a 106% increase in container traffic with new clients Seabord Marine, Melfi Marine and Costa Container Line. Several Dutch companies (Boskalis, Smit) are benefiting from current development, as could other potential Dutch companies active in ports and supporting areas.
The Panama Canal Railway Company invests US $25 million
Source: Business News Americas
The Panama Canal Railway Company (PCRC) has invested US $25 million to increase its capacity to handle cargo and transport passengers. The investment aims to meet rising demand from cruise ship tourism and the strong growth of Panamanian ports. Purchases included seven new locomotives, new passenger wagons and two cranes equipped with cutting-edge technology to increase cargo transport efficiency. The company handled 122,650 passengers in 2007, up 12.3% compared to 2006. Cargo transport rose to 3.4 Million ton in the same period, equivalent to 67.9% year-over-year growth, the report said. Container operations more than doubled to 224,000 units, up from 110,000 units in 2006. PCRC has a 25-year concession, renewable for another 25 years, to build, maintain and operate a freight and passenger rail service beside the Panama Canal. The company is 50% controlled by Kansas City Southern and 50% by Mi-Jack, a private company that operates railroad intermodal terminals in North America.
Guatemalan President to visit Panama
Source: Prensa Latina
Guatemalan President Alvaro Colom will visit Panama to consolidate bilateral commercial links, informed Panamanian Vice President and Foreign Minister Samuel Lewis. Free-trade agreement Panama-Guatemala. The two-day visit beginning 25th of February occurs after the free trade agreement signed by Colom and his Panamanian counterpart Martin Torrijos last February 13th. Lewis said that bilateral agreement guarantees that 93% of Panamanian exports enter the Guatemalan market without tariff. Meanwhile Guatemala, Panama's main partner in the region, will have access to the Panamanian commercial services and marine system. In 2007 trade between Panama and Guatemala reached 120 million dollars, an increase of 15% compared to 2006.
Panama “Hub of the Americas” is attracting more airlines
Air Caraibes started a twice a week service between Panama and Paris (France) with a stop on the French Caribbean island of Guadeloupe. Also Air International out of Miami started a charter flight to Panama. Spirit Airlines started this month with three direct flights on a weekly basis out of Ft. Lauderdale (US) and hopes to be able to offer a daily flight at the end of this year. KLM will start three direct flights a week to Holland next month. Panamanian authorities are considering further expansion of Tocumen International airport in order to deal with the increasing demand of passengers, new operators, and increased service from hub host COPA airlines.
Panama needs more hotels for tourists
Source: Prensa Latina
The lack of hotels in Panama is the greatest obstacle for attracting more visitors, according to Ana Royo, president of the Panamanian Association of Tourist Operators (APOTUR). Tourist agents estimate the capital needs 10,000 rooms, but even though building has started on some new hotels, it will take several years to overcome the scarcity. The 45 tour operators integrating APOTUR point to sales lost due to lack of housing availability, most concerning large travel packages. Royo pointed out the importance of having medium class hotels offering rooms from 90 to 100 dollars a night, so the tourist will be motivated to stay longer in Panama. The tourism sector provides many business and investment opportunities for Dutch businesses and several studies can be obtained from the Dutch Embassy.
Gambling up 19%
The Gaming Control Board (JCJ) reported that the amount of money legally bet in Panama in 2007 added up to $948.1 million, which is a little more than 19% higher than in 2006.
Panama tourism market opens
Last month, Law 5 went into effect, allowing foreign tour operators to offer their services and compete with Panamanian companies in the local tourism market. Several foreign tour operators, including 4 from Costa Rica, have expressed interest in doing business in Panama now that they are allowed to work here. Figures from Panamanian Institute of Tourism (IPAT) indicate that 1,3 million visitors entered Panama last year, a 17% increase over 2006. Panama received over 80.000 European visitors in 2007, a 25% increase from previous year. More European visitors are expected this year with new direct flights from KLM and AirCaribe between Europe and Panama. Plenty of opportunities for Dutch tour operators.
Panama's construction industry grew 25% in 2007
Source: Bloomberg
Panama's construction sector expanded 25 % last year, spurred by the Panama Canal expansion project and high-rise apartment buildings. Construction was the fastest growing part of Panama's economy in 2007 and now accounts for 5.3 % of gross domestic product, according to Mr. Fernandez from the Construction Chamber. There are more than 200 high-rise buildings under construction, Fernandez said. Panama's ex-president, Nicolas Ardito-Barletta, said 42 % of the new luxury apartments build last year were sold to foreigners seeking a second home in Panama. Real estate projects in Panama City include the $1 billion Santa Maria Golf and Country Club, and Los Faros de Panama, a skyscraper complex with two towers of 75 stories and one of 84 stories. Panama could represent a very lucrative market for Dutch consulting-, construction-, engineering companies and assorted suppliers (pumps, sanitation, kitchens, furniture, etc.).
Plan Puebla-Panamá to focus infrastructure
Source: BNamericas
According to Gloria Maduro, Panama's PPP representative, the Plan Puebla-Panamá (PPP) is undergoing heavy restructuring and will focus only on regionally feasible projects, mainly in highway and port infrastructure, telecommunications and electrical connectivity. So far the plan, which aims to interconnect south-eastern Mexico with the seven Central American countries, has seen project financing for US $4.5 billion. Among other initiatives, Panama is promoting a short distance cabotage program for transporting cargo to Mexico by sea, which involves building ports in several countries.
Wind power coming to Panama
Enrilews and Santa Fe Energy are both preparing to start building windmill farms in Panama. Enrilews belonging to the Spanish Fersa group reported that after studying eight potential sites, they have identified Cocle and La Chorrrera as the two that are most viable. The company is awaiting approval of its environmental impact study and hopes to start construction the second trimester of 2008. Santa Fe is also hoping to be up and running next year. The first phase of construction will start this year, consisting of an 81 MW farm in Veraguas. Possible business opportunities for Dutch suppliers of wind turbines and financial institutions.
Hydroelectric Changuinola
Source: BCIE
AES Changuinola, a subsidiary of AES Corp, will build the Changuinola 75 Hydro. Located in Bocas del Toro, Panama, this hydro will increase the installed capacity of the country to 600 MW (60% of the total). The plant will have a generation capacity of 222 MW and will cost US$350 million. It is expected that construction will begin on the first semester of 2008 and is expected to be finished by 2010.
Minister of Commerce visits Qatar
Abdullah bin Hamad Al Attiyah, Deputy Premier and Minister of Energy and Industry, received in his office at the Qatar Petroleum headquarters Alejandro Ferrer, Minister of Commerce and Industry of Panama, and his accompanying delegation last month. Talks during the meeting covered bilateral relations, mainly in energy and industry sectors and means to enhance them.
Insurance sector reported record growth
The Panama insurance industry recorded a 22% increase in written premiums, reflecting increased market penetration and better customer service. The increase in premiums is a reflection of the country’s strong economic growth. The total premiums written for 2007 exceeded for the first time $ 600 million dollars, a 22,25% increase over 2006. The largest growth segments were; vessel, fire, contractor, money in transit, surety bond, car, freight, individual health, group health and accident. The insurance industry in Panama en the rest of Central America show relatively high profit margins and little competition, making it an interesting market for foreign (including Dutch) insurance companies.
Fitch raises Panama's bond rating
Source: Reuters
The Fitch debt rating service has raised Panama's bond rating from BB+ with a "stable" rating to BB+ with a "positive" rating. The outlook change reflected the positive economic growth momentum and fiscal consolidations a result from tax reforms. However new bond issues will at less than investment grade, hence Panama will have to pay higher interest rates on these debts than more credit-worthy countries would, but probably slightly less than before.
Three bidders approved for two cell phone concessions
A Panamanian subsidiary of the Irish company Digicel; Telemovil El Salvador SA, which is itself a subsidiary of the Luxembourg company Milicom International; and Mexican billionaire Carlos Slim's Claro de America Movil all received the National Public Services Authority's permission to bid on two new cell phone concessions that will be awarded this year. A fourth company did not qualify to bid.
First banana auction in Panama
Source: Panama America
The Multiple Services Cooperative of Puerto Armuelles (COOSEMUPAR) offered for sale the largest lot of bananas they have ever sold on the open international market. Five million boxes of bananas were auctioned through the Panamanian Farming Market (BAISA). Of these, four million boxes were Premium quality and the remainder was lower qualities. This was basically a futures sale, covering the bananas COOSEMUPAR will produce on their 3,000 hectares of land from 1 March to 30 November 2008. The auction was held on 14 February 2008. The final sale price was set by the bidders, and the auction was open to all companies interested in participating. The COOSEMUPAR production has International Certifications from Eurogap and Rainforest Alliance. This new auction process is a great opportunity for Dutch companies interested in commercialising bananas to the European market.
Strike shuts down Panama; more strikes are expected from construction workers
Source: Prensa Latina
Panama's single construction workers union, SUNTRACS, reactivated last week its warning of a general strike if the government does not respond to sector demands. Two weeks ago, over 40 thousand construction workers in Panama protested and about 750 projects were shut down. Saul Mendez, SUNTRACS secretary, said the Panamanian government has not made a decision regarding wage increases, price reduction of basic products and improvements in security conditions in construction works. He pointed out these demands would benefit those with lower income in the population. More than 700 people have been arrested during the strikes two weeks ago causing million dollar losses to the Panamanian economy.
