The Green Park Free Zone in Costa Rica [Podcast]

The executive director of the Central American Group’s Green Park in Costa Rica, Carlos Zacapa, discusses the advantages of locating manufacturing operations at the facility.

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Transcript

Central American Group: Welcome to a podcast by the Central American Group. We are very pleased that you could be with us and have a guest that is going to give us some information about a free zone in Costa Rica that we hope you find both interesting and useful,

Today we have with us Carlos Zacapa. He is the executive director of the Green Park Free Zone in Costa Rica. How are you today Carlos?

Carlos Zacapa: Hello. All is well. How about you?

Central American Group: I am doing fine. We are going to ask some questions about the Green Park Free Zone in Costa Rica. You can tell us about that, but first of all, can you give us some background information on the Central American Group?

Carlos Zacapa: Yes. The Central American Group is a group of companies that have been functioning since the 1950s. We are in different sectors. We are involved in real-estate and free trade zone development, and industrial park development in Central America as well. We do third-party logistics in different parts of Central America.

The Central American Group: Today we are going to focus on your role in the development of the Green Park Free Zone in Costa Rica. Can you tell us a little bit about the Group’s experience in free zone development?

Carlos Zacapa: Sure. The Central American Group started industrial park development in 1985 in El Salvador. We started the Parque Industrial San Marcos. Then we continued to develop the Free Trade Zone Law in El Salvador. After that, we started in 1990 with what is now known as the San Marcos Free Zone.

Central American Group: We don’t want to take people’s knowledge for granted. Maybe you can tell us exactly what a free zone in Costa Rica is for those of us that might not know.

Carlos Zacapa: Yes. The free trade zone regime in Central America offers a tax-exempt location for companies that are interested in manufacturing and exporting their goods to other countries. Our main clients that are interested in the free zone in Costa Rica are US companies and companies that serve the US market.

The Central American Group: El Salvador and Costa Rica are very different in their economic profiles. Could you please tell us what kind of industry is in El Salvador and, also, what kind of industry is in Costa Rica?

Carlos Zacapa: Sure. El Salvador is known for light manufacturing, mainly textiles. We have "full package" textile capacity now. There is a synthetic cluster that is already established. It is very strong and is the only one in Central America. Logistics is coming along in El Salvador, as well as regional distribution centers for companies that wish to distribute to all the nations in the region from one country.

In Costa Rica, it is a little more technological. Basically, Costa Rica has advanced manufacturing which is mainly medical device manufacturing. Many such companies produce their goods in a free zone in Costa Rica.

The Central American Group: What is the experience that the Group has in developing free trade zones in Central America?

Carlos Zacapa: As I mentioned earlier, in 1990 we started the development of the San Marcos Free Zone in El Salvador. It now has about 600,000 square feet under roof. In 1998, we started the development of the International Free Zone in El Salvador. This one has about 1.3 million square feet under roof. In 2016 we started developing what is now the Green Park Free Zone in Costa Rica. This one will be about 600,000 square feet under roof as well. However, we are just starting operations this month. Right now, what we have built is about twenty-percent of the free zone.

The Central American Group: Why did you choose Costa Rica as the location for the Green Park Free Zone in Costa Rica, as opposed to any other country in Central America?

Carlos Zacapa: We actually explored two countries. On one hand, El Salvador, Honduras, and Nicaragua were markets that are like the one that we were already in. We wanted to go a little higher in terms of technology. We actually looked at Panama and Costa Rica. At the end of the day, we felt more comfortable in developing a free zone in Costa Rica. This is because is that the country is more focused on manufacturing. Panama is better known for its financial services industry. We believe that the manufacturing industry in Costa Rica will be more stable, therefore it is a better investment. That has been our experience in El Salvador. That is one of the main reasons that we decided to develop a free zone in Costa Rica.

The Central American Group: There is one other question that I would like to ask with respect to Costa Rica. We know that companies that are looking to produce offshore often choose to go to a place like Mexico, for instance. Mexico is sold to manufacturing executives in the US on the basis of its low wages. Costa Rica has a different selling point. Can you tell us a little bit about that?

Carlos Zacapa: Yes, definitely. Costa Rica’s selling point would be the highly qualified labor force that is in Costa Rica. We have a large number of very educated people. More specifically, what Intel did in Costa Rica helped to build a labor force that is technologically trained. From there the labor force "jumped" to medical device manufacturing. This began with Baxter’s arrival in a free zone in Costa Rica in 1985. Right now, twenty of the world’s most prominent medtech companies are established here. This has caused a supplier base to establish itself here in Costa Rica, as well. So, basically, our selling point is that of a qualified labor force. In addition to that, we offer investors political and economic stability in Central America.

The Central American Group: You’ve explained a little bit of information about what makes Costa Rica a good place to set up operations. Can you tell us what makes the Green Park free zone in Costa Rica different from its competitors in the region?

Carlos Zacapa: Sure. The Green Park Free Zone in Costa Rica is a part of the Central American Group. We are a vertically integrated organization. Basically, we do everything. We can handle all of the construction from the land movement to the delivery of a built-to-suit structure. We have experience doing this since 1985. The Green Park Free Zone in Costa Rica is not a huge park. It is a park that we expect will have between 15 and 18 tenants. We believe that we can give this number very personalized attention. In addition to building the parks, our company serves as their administrator as well. We do not hand over the administration of the parks and the free zones to third parties. We do everything internally. Our response time on things like maintenance and anything that a client may need is, basically, immediate.

Central American Group: One of the things that strike me is the name of the Green Park Free Zone in Costa Rica. Why did you choose that name?

Carlos Zacapa: First of all, the Green Park has international environmental certifications. We are already EDGE certified, and we are in the process of being LEED certified. By the end of 2018, we should have the LEED certification completed. Also, we have received a certification for quality from the Government of Costa Rica. It is called "Essential Costa Rica." Our facilities in the Green Park Free Zone in Costa Rica were born green. We are not adapted green. All of our buildings are LEED designed, which makes them energy efficient. If a company wishes to pursue a LEED certification on their own, they will already have a head start on the process because they are tenants in the Green Park.

We do sustainable construction. We make sure that we separate residues, and we make sure that anything that is bought for the building and is residue is disposed of in the proper manner. In the infrastructure, we have what we call eco or "green" sidewalks which are permeable. This assures that all of the rainwater that falls goes back into the ground. This means that we have zero hydrological impact from the park. Also, we have all rainwater going into what we call retention ponds.

The illumination in the Green Park Free Zone in Costa Rica is all LED. We are also starting the process of receiving a neutral carbon certification. Additionally, in the buildings, we are using water collection systems which use rainwater to supply for needs of the resource in the bathrooms and sinks. In short, we are aiming to achieve a lot of sustainability.

Central American Group: Costa Rica is known for its attention to environmental issues. It sounds like what is happening in the Green Park Free Zone in Costa Rica is in line with what is happening in the country.

You mentioned that The Green Park, in addition to being green, is human. What do you mean by that statement?

Carlos Zacapa: Our philosophy in the Central American Group is that we are not here just to do business, but we also have to give back to the community. What we have done is to form a Social Responsibility Committee that has put a social responsibility program in place. We help at-risk children that live in our community. These could be youths that have become involved with drug use or gangs. We have developed a sports program. Soccer is very very big in Costa Rica. We do other things as well, we connect with local leaders to give the youth talks on how to take care of each other on the playing field as well as off. Our goal is to help these youth to have a good future. We have volunteers from our organization, as well as personnel from companies in our free zones, that participate in our program. This represents a two-way street. This is making both our people and those of our clients more aware of the real challenges that are facing our community. We help not only the youth that we connect with, but we also help ourselves. I think that this is a unique focus that we are pursuing.

Central American Group: It sounds like you have a good approach there. You have got a good infrastructure related to developing both the human and the physical needs of companies If someone wants to get in touch with you to ask questions, is there an email address that you can be reached at?

Carlos Zacapa: Yes, they can reach me at [email protected]

Central American Group: Thank you very much for taking the time to speak with me today. We appreciate it and wish you good luck both now and in the future.

Carlos Zacapa: Thanks to you as well. I appreciate it.

Central American Group: Thank you for speaking with us about the Green Park Free Zone in Costa Rica.