Project of an Eco Industrial

Park in a Tax Free Zone

Presentation

Edited by: Corrado L. Bottazzi

INTRODUCTION

The project presented here is related to the Eco-Industrial Park (EIP) “COBOL DUE SA“, which was developed according to the guidelines of the Sustainable Development. To ensure sustainable development, it is needed to preserve the quality of the environment: changes made to the nature by human activities must stay within limits such as not to damage it beyond repair, in order to allow human life to continue to develop.

This means to adopt attitudes that ensure, with the aid of technological progress, that the rate of pollution and exploitation of natural resources remains within the limits of the absorption capability of the receiving environment, and the possibility of resources regeneration, as permitted by nature cycles, so as to prevent further growth over time of the pollution.

Sustainable Industrial Development proposes the creation of projects that can ensure long-term beneficial effects to production companies, but also environmental and social. Therefore the companies that set up in an Eco-Industrial Park (EIP) to realize their production activity, undertake to respect environmental limits in achieving the economic goals, in order to ensure an high quality environment and high profitability.

In the EIP a wise use of resources is made, with which it is possible to guarantee excellent results in profitability, thanks to the experience of over a century of industrialization. With this approach, for example, we consider wastes not only as a production cost to be incurred for their disposal, but as a potential value of reuse through the recycling technologies and biotechnology practices.

Crucial for the entrepreneur who wants to settle in the EIP, is that this Industrial Park is a Free Trade Zone, with specific rules, and an extremely beneficial custom and fiscal regulation.The companies to be able to establish must comply with the requirements of the Law 32/2011, to become in turn Companies with Free Trade Zone license as “Usuario de Zona Franca”, according to the above mentioned law.                                                                                                             

Moreover, what represent a big advantage for a company the fact of operating in a Eco-Industrial Park, is the presence of a systemic administration among companies: we know in fact that the efforts made at the level of a single firm can achive good results, but the improvement is more noticeable when switching between individual logic to a system management logic, as in the examples of the Production Chains very common in the forefront economies.

In fact an industrial park developed only with the aim of offering areas and buildings to meet the demand of production activities and local services, it is not profitablebecause the global crisis in recent years has changed the economic scenario to such an extent as to require the companies  relocation in the Developing Countries where, however, still lack all the needed infrastructures to receive foreign companies to ensure their profitability.

For this reason, an industrial park is no longer to be considered as a portion of land occupied by companies that have minimal relations, because today’s businesses want to adopt policies to encourage resource saving, and promoting synergies in production, economic and environmental aspects.

This EIP project is inspired from successful examples of Eco-Industrial Parks (Denmark, Finland, USA, etc ..), which were analyzed in order to obtain a replicable model with slight modifications  needed for its realization in the Republic of Panama. 

§  CLARIFICATIONS ON THIS PRESENTATION

This presentation has been made with the aim to assess the feasibility and the profitability of the Eco-Industrial Park project in the “Zona Franca Cobol Due” located in the town of Chitre, in the Republic of Panama.

This paper is not a Business Plan, that is later processed only after this brief Presentation and a Feasibility Study can highlight the opportunity to make a profitable investment, with a risk index average for similar projects. This means that it is possible to develop a business plan only upon  the basis of the information and assessments arising from this document and the main information contained in the Feasibility Study.

It is the writer care to highlight the benefits and advantages in terms of profitability and business growth that this project can offer to International Investors in the construction industry, which want to realize the first Eco-Industrial Park in Central America, in a tax and duties privileged Free Trade Zone.

This Eco Industrial Park is able to welcome International Companies in the Agro-Food, Pharma-Cosmetic, Nutraceutical and Biotechnology fields; interested to consolidate their presence in the markets of Mexico, Canada, USA, Brazil, EU, Japan and other Asian countries.

A)THE PROBLEM: THE GLOBAL CRISIS IN RECENT YEARS

After a 2009 international recession and a 2010-2011 recovery period, since 2012 has been presented a deceleration in the global economy (Chart 1). The recovery of World Trade realized in 2010 (+ 12.6% over 2009) marked a progressive slowdown in 2011 and 2012 (respectively + 6% and + 2.4%),  due to the economic situation that occurred starting from summer 2011, as a result of some major causes:

·         the worsening of the debt crisis of Sovereign States in the Eurozone, which made necessary restrictive budgetary policies;

·         the growth slowdown of the Emerging Countries, that have adopted restrictive monetary and fiscal policies, addressed to reduce inflation.

In this whole situation, the world trade remains the main support of GDP.

Graf. 1. GDP and global trade in goods and services. Years 2000-2014 (% var. over previous year).

GDP expressed in constant values; estimates for 2012-2014. Source: Based on data from the International Monetary Fund and the European Commission.

Who has driven the economy of the Europe in recent years was undoubtedly the International Trade,  despite the recession continues to show signs of vitality.

After the downturn in 2008-2009, have followed quarters of significant growth that led in the first half of 2011, the recovery of pre-crisis levels both for Imports and for Exports.

§  PANAMA: A NATION IN STRONG ECONOMIC GROWTH.

With an average Economic Growth of 6.8% (since 2000) and with the GDP which recorded increases with double figures during 4 of the last 7 years; Panama shown a consolidated rate of economic growth. This trend is expected to continue throughout 2020 with a growth forecast at around 6-7 %,  even if with a gradual slowdown tendency.

 The Unemployment Rate remained at levels of 4% (data 05/2014), with a trend slightly lower for 2015.

The extraordinary growth rate of Panama in recent years is largely bound up the launch of a program of Public Works regarding transportation, communications, hospitals and schools; within guidelines who lead Panama’s economy to the “Post-Panamax” age.

Post-Panamax is the term which defines the standards of the boats crossing the Channel through the new locks coming for  its doubling project.

The “Panamax” vessels (294m overall length, 32m beam and 12m draft) have a chance to transport up to 4,500 TEUs (Twenty Feet Equivalent Units) each.

To the vessels in transit through the old locks will be added the standard “post-Panamax” ones,  which provides an increase in all dimensions of the ships, whereas therefore they could carry about 12,000 TEUs.

In the last three years (according to data provided by the Authority of the Panama Channel) the Channel reported average of 12,000 transits of cargo ships with a total capacity of 63 million TEU, which led to a government introit over of US $ 1 billion in 2014.

Therefore it is logical to expect that the new Channel could rise the number of transits up to 24,000 per year, and with the increased capacity of the boats, it can rise in 144 million TEUs, with a final result estimated at over 200 million TEUs per year,  with a consequent introit for the Panama authorities of approximately US $ 6 billion.

The impact of the new channel on the world economy will be significant mainly in the medium and long term. The economies of China and the European Union will be among those most affected as it will increase the possibility of being present in the North American markets (the east side for the west and one for the other).

The geographical position of the Panama Channel, therefore makes this country a strategic hub for trade and the companies relocation,  that have products targeted for the USA, Canada, Mexico, Brazil and Europe markets.