- Posted by Colombia
- On Wednesday April 20th, 2022
- 0 Comments
Investments from companies choosing to nearshore in Colombia have exceeded USD 1 billion in little over two years. That reportedly came in the wake of the current administration beginning to heavily promote nearshoring in Colombia, leading to 60 companies establishing operations in the country since the beginning of 2020.
Nearshoring is the process of companies moving value chains – especially the likes of production facilities – closer to their home base. It is most often used to refer to US and Canadian companies moving elements of their operations from Asia to Latin America, however it can mean any similar relocation efforts.
In general, nearshoring is partly undertaken as a response to rising production costs in Asia, as well as to relieve some of the dependency on Asian markets that governments and companies in North America and Europe have developed over recent years.
However, it also provides companies with the convenience of having operations based closer to home, meaning workers are in similar time zones and distances to markets for manufactured goods are much shorter.
According to a report from La República, since the Colombian government began promoting nearshoring in Colombia in 2019, the country has attracted a total of USD 1.072 billion in investment from 60 companies previously identified as being strong prospects for choosing to nearshore to the country.
That is little more than one third of the 165 companies that have reportedly shown active interest in nearshoring in Colombia, from among more than 900 contacted by investment promotion body ProColombia – suggesting that significantly more investment could be forthcoming in the near future.
According to the report, among the 60 companies that have begun the nearshoring process or signed contracts and committed to nearshore in Colombia, the most common sectors represented are agroindustry, chemical production, life sciences, and metalworking.