La Zona Libre de Colón

Day five (5) was a very interesting one of learning for the IIEM team. We were afforded the privilege of visiting the second largest duty free shopping area in the world, the Colón Free Zone. Upon arrival at our destination we were greeted and pleasantly welcomed by our tour guide for the day, Mr. Harry Davis. As we proceeded past the first security check point and into the Free Zone we were taken aback by the layout and structure of the area. The picture of an enormous flea market in a warehouse building quickly left our minds, as our bus passed by towering multi storey buildings on our way to the administration department.

 

 

At the administration building we met with the enthusiastic marketing director, Ms. Sonia Anton, who prepared a very detailed and informative presentation on the history, current operations and future plans of the Free Zone. We delved lightly into the past to learn about the initiative taken by seven business men to start this venture by using warehouses while occupying 35 hectares of land, in 1946. They saw the importance of leveraging the geographic position of Panama to commence trade. This massive trading area that started off with ten companies has evolved into a city-like community spanning 988 acres. To this day the Colón Free Zone is run by the business community as opposed to the government of Panama.

 

 

We also saw that 2,500 companies are currently being facilitated on the 988 acres, which eventually came as no surprise to us after hearing about the seemingly unsurpassable incentives that are offered to the owners. Some of these include; 0% taxes; competitive operation costs and 24 hour digitalized surveillance. Companies also have the liberty to build their own stores, warehouses or industrial plants on lots leased to them from the Free Zone Administration. A minimum of 60% of the merchandise that is imported however, needs to be exported and lot lease agreements are signed for 20-year periods.

We were reminded of the fact that the Panamanian Government is keen on providing solid banking centers and uses the United States currency which attracts investors. Other attractions include the fact that there are two main home ports for cruise lines, four container ports, ISO 9001:2008 standards are in place and there are laws against money laundering.

Ms. Anton noted that although the Free Zone is run by the business men and women, customer service and warehousing system facilities are provided by the Administration department, to assist with the operations. As a measure for ensuring efficiency, every company is given a registration number and operation code which allows for ease of tracking the amount of imports and exports that take place.

We enjoyed a very enlightening session at the administration building and then we were off to experience the “zone” ourselves. We were guided by Mr. Davis to what seemed like a normal city with streets and street signs and miles of blocks and of course, stores. Instead of seeing goods stacked up on a table as is the case in a flea market, all the wholesale merchandise was nicely showcased through mainly glass shop windows. Most of the stores were also outfitted by well designed logos and signage. This was no warehouse bargain centre.

 

 

As members of a society that is also well positioned at the end of the Caribbean chain of Islands and to the north of South America, it is imperative that we do not just look at the Free Trade Zone as another good initiative that was accomplished by a country that is bigger than ours. We must instead, seek to find ways to leverage our own geographic location by doing the necessary research to ensure that Trinidad and Tobago is utilized to its maximum capacity.

 

 

By: Lindy and Cherise