business

Free Zone sees continued growth

Despite the global financial crisis, business at the Colón Free Zone is up almost 19 percent.

The effects of the economic crisis have not yet impacted business at the Colón Free Zone which has continued to see its business increase.

According to the latest figures from the zone's administration, activity in November reached $2.4 billion, an increase of 50 percent as compared to November 2007 when the activity there was $1.6 billion.

Between January and November 2008, the zone registered commercial activities totaling almost $18 billion, a growth of almost 19 percent from the sdame period in 2007.

Despite those increases in commercial activity, there is a growing sense that the good times are not going to last.

“Everyone is aware that something will happen this year, and they are limiting their investments due to the financial crisis,” said Hertsel Levy, former president of the Association of Users of the Free Zone.

In 2009, Levy expects the zone to experience the impact of the global recession.

“Today, expanding into the free zone is difficult,” Levy said, citing restrictive lending policies by banks.

Companies, meanwhile, are taking “measures to take care of their clients,” but at the same time are keeping a close eye on inventory levels, said Giovanni Ferrari, president of the Association of Users.

He said it is too early to anticipate trends in 2009, but acknowledged that prevailing uncertainties in the economies of the world are expected to have an impact here.

Other businesses will seek new markets with more stable economies, and most will adjust their purchases and keep a close eye on the evolution of the main users of the free zone, such as Venezuela, Colombia and Ecuador.

A distributor of footwear for a prestigious brand in Latin America and the Caribbean noted that the recession has not had much of an effect in Latin America “because it is more controlled,” but stated that luxury brands will be most affected because the international layoffs are hitting the professional class the hardest, which are the main buyers of these products.

Economist Rolando Gordón, a professor at the University of Panama, predicts that the zone will have a much lower growth rate in 2009 as compared to 2008, mainly because of the global recession.

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