When Boston Scientific Corp. in February announced a new manufacturing plant in Cartago province in Costa Rica, it was a big deal. But it wasn’t an out-of-the-blue shocker for the company, which has been making things in the blue economy ecosystem of Costa Rica for many years.
“We are grateful to our employees in the region who have continued to deliver life-changing technologies to our customers and their patients,” said Paudie O’Connor, senior vice president, Global Supply Chain, Boston Scientific. “As we expand our Costa Rican operations into Cartago, we will continue to develop our talent and capabilities.”
A UNESCO site, the Talamanca Range-La Amistad Reserves / La Amistad National Park along the border between Costa Rica and Panama covers large tracts of the highest and wildest non-volcanic mountain range in Central America.
Photo courtesy of UNESCO
The expansion builds on the company’s employment base of more than 7,000 people at El Coyol de Alajuela and La Aurora de Heredia. The new facilities in Cartago will generate approximately 1,200 additional jobs.
The celebration doesn’t stop there. At the same event, the company also announced a new 40,000-sq.-m. (430,570-sq.-ft.) building would be developed in La Lima Business Park, with completion expected in early 2025.
The event was attended by Costa Rica Vice President Stephan Brunner, Costa Rica Minister of Science, Innovation, Technology, and Telecommunications Paula Bogantes Zamora, Costa Acting Minister of Foreign Trade Indiana Trejos, and Jorge Sequeira, the general manager of CINDE, the Costa Rican Investment Promotion Agency, who is retiring from the post after many years of leadership.
“Boston Scientific is one of the most important players in the life sciences sector in Costa Rica, being the largest employer and exporter by volume of medical devices in the country,” Sequeira said. “The opening in Cartago and the announcement of the new megaproject give a clear message of the development and competitiveness of the country in this industry. The life sciences sector exported more than $4.5 billion in 2022, remaining Costa Rica’s main export product.”
Indeed, a March 2023 life sciences update from Cushman & Wakefield noted that a total of 83 multinational companies from 16 different subsectors have chosen Costa for operations, including 12 of the top 30 life sciences companies worldwide. The report characterized a great build-to-suit opportunity with more than 30 million sq. ft. of land inside industrial parks to be developed.
“Most medical devices companies in Costa Rica are in El Coyol, Alajuela and Cartago,” the report stated. “But new companies are considering establishing their operations in a new submarket outside the Greater Metropolitan Area called Grecia, due to better tax incentives, available property sizes and layouts, and proximity to labor.”
Costa Rica is one of three countries in the world where Intel’s operations are officially net positive, meaning Intel restores and returns more freshwater than it takes in. It’s a sustainability and social responsibility message that resonates with a country known for the same priorities.
Graphic courtesy of Intel
Surge in Services
There is more than one “Boston”-named company investing in the country: In April 2022, Boston Consulting Group (BCG), one of the world’s leading management consulting firms, announced the opening of a new Business Services Center in Costa Rica called “Nexus,” located at Ultrapark I, a 10-building development operating under the country’s free zone regime in Aurora, Heredia.
BCG Nexus Costa Rica expects to create more than 400 jobs in the next two years, growing alongside other BCG global hubs in such cities as Atlanta, Delhi and Madrid.
“The addition of BCG Nexus Costa Rica highlights BCG’s tremendous growth story as we continue to invest in our people and enhance critical services to support our growing business,” said Brian Gross, BCG’s director of North American operations.
Other services expansions in recent weeks and months include a 60-person Global Business Services center for the Americas from Texas-based chemicals company Huntsman Corporation, which plans to grow the site to around 100 employees by the end of this year. “Costa Rica offers the ideal environment to grow our operations,” said Mauricio Gonzalez, site leader of Huntsman’s GBS center in Costa Rica. “Here we have security, infrastructure, and a high-quality workforce who are innovative, curious, and motivated.”
Software services firm announced last year its plan to hire 200 new employees through 2024 at its site in Lindora Park in Santa Ana, which has grown to 300 employees since its establishment in 2015. And in March of this year, Navisite, which provides strategic advisory and digital transformation services for mid-market and smaller enterprise companies, announced a new 50-person office in WeWork Cariari Corporate Center. Mark Clayman, CEO of Navisite, complimented the country’s “diverse, savvy workforce.”
In July 2022, credit information and marketing services Experian announced the expansion of its operation in Costa Rica with the creation of 120 new jobs related to software development, advanced analytics and data. The company’s site is in the El Cafetal Corporate Center in Heredia and employs more than 1,300 already. Experian provides advice to companies for credit risk management, fraud, marketing solutions and BPO.
“Fourteen years ago, when we arrived in Costa Rica, we were looking to diversify our locations and take advantage of the strengths of different parts of the world,” said Experian Costa Rica Director of Service Provision Minor Monge. “There are multiple factors that made this country the ideal place for our business — its political and social stability, its proximity to the United States, and what we mainly say is strengthening our operations because of the highly educated and bilingual talent of its people.”
Among the nation’s primary industry sectors, services saw the greatest number of projects in 2022 at 23, with two of them locating in the province of Guanacaste.
Nothing ‘Mini’ About This Boom
The winning of these projects and more is one reason the Economist Intelligence Unit’s latest Business Environment rankings in early 2023 named Costa Rica the “biggest winner” in Latin America. The country improved its global ranking by six spots, “driven by higher infrastructure and technological readiness scores, the EIU said. “Broad political consensus on maintaining a market-friendly, open economy has helped the country to secure a wide network of FTAs [free trade agreements] and has made it attractive to investors,” the report stated. “This, along with accession to the OECD in May 2021, supports Costa Rica’s strong score for policy towards foreign investment.”
CINDE estimates that the 402 multinational companies that are located in Costa Rica employ 184,200 Costa Rican citizens in the sectors of services, manufacturing and life sciences.
Costa Rican policies are as much about continuous improvement as the products its economy produces.
In February, new incentives made their debut as nine government decrees were signed for implementing a law (Law 10234) on strengthening of territorial competiveness for attracting investment outside of the Greater Metropolitan Area (GMA) of San Jose. The law provides for 11 new incentives aimed at enhancing territorial competitiveness, speeding up paperwork, and opening up the development possibilities of sectors such as agroindustry, food industry, light manufacturing, tourism infrastructure, and services in the cantons of these emerging regions, where close to 49% of the country’s population resides. The law meshes well with the legal security for such operations under the country’s free trade zone regime.
Even before the new incentives, efforts by CINDE and stakeholders had catalyzed more than 5,300 jobs outside the GMA from multinational operations, with 10 new investments in 2022 alone across such sectors as life sciences, services, manufacturing and tourism infrastructure. The new law also showcases opportunities for strengthening production linkages of Costa Rican suppliers.
CINDE’s Jorge Sequeira noted, “Law 10234 is the fruit of years of coordinated efforts to shrink gaps between regions within and outside the GMA, bringing job opportunities to regions where they are needed and enabling them to take advantage of the knowledge transfer contributed by multinational companies. With the provision of regulations, Costa Rica has more instruments — tangible and competitive — so that investors who wish to grow their operations in any of these regions now have more options, legal certainty and the distinguishing features of Costa Rican talent.”
The new law helps Costa Rica stand out even further in a region that is standing out too: “Inflows of FDI — mainly to commodity-related sectors, but also to services (such as commerce, restaurants and finance) and manufacturing — boomed in 2022 in many Latin American economies,” the EIU report observed. “This FDI mini-boom could continue into 2023.”
Judging by the steady hum of projects, there’s nothing “mini” about this boom in Costa Rica. A sampling from among the majors:
Bridgestone Americas
Bridgestone Americas has announced an investment of approximately $190 million to renovate and expand its tire manufacturing plant located in Belén de Heredia, which started operations in 1967 and employs 1,000 people. The investment is in addition to more than $60 million planned for 2022-2026, meaning the company will be investing over $250 million over the five-year period. The investment will enable a 36% increase in production capacity and 160 new jobs.
“This new capital investment represents an important step for Bridgestone’s tire production capacity, and it also reinforces our commitment to contributing to Costa Rica’s economic and social development,” said Alfonso Zendejas, president of Bridgestone Latin America North, Bridgestone Americas. “This investment strengthens Bridgestone’s commitment to Costa Rica as a strategic location for local and global business activities and further contributes to our ability to maximize value for all of our stakeholders.”
Marianela Urgellés Batalla, a longtime multinational executive with 25-plus years at Intel, is the newly appointed managing director of CINDE.
Bridgestone Costa Rica has invested more than $38.5 million, of which US$36 million has been destined for modernization and efficiency projects for the tire manufacturing plant, $2 million has gone toward the expansion of a 250-worker plant in Turrialba, and $500,000 has bolstered the operations of Bridgestone Business Services, which employs around 500 people in Heredia.
“At Bridgestone, we believe in the great potential of the Latin American market, as well as the high levels of quality and reliability of the local workforce. Thanks to the trust of the corporation and the daily commitment of our teammates, Latin America will remain one of the most outstanding regions for the company worldwide,” said Celso Villalva, vice president of Latin American Manufacturing, Bridgestone Americas.
Intel
Intel has been investing in Costa Rica since 1997. Its testing and assembly center in Heredia just north of San Jose includes an R&D center and a global services center. Last August, the company celebrated 25 years in the country when executives and country leaders including Costa Rica President Rodrigo Chaves gathered in San Antonio de Belen to inaugurate the Intel Assembly and Test plant, the culmination of nearly $1 billion of investment over the preceding two years. The facilities had started to operate with assembly and test end-to-end processes in September 2021 (testing operation exportations began during April 2020), but due to the COVID-19 pandemic, the site had not been officially inaugurated.
Once the manufacturing process of silicon wafers is completed at Intel fabs, the components are cut off and shipped into a center of assembly and test. Each chip is assembled inside a package that protects and allows it to connect to other components. Finally, its functionality is tested out. A meaningful share of server units products offered by Intel to global markets are tested and shipped in Costa Rica, a CINDE release explained. In other words, this Intel facility plays a crucial role in an industry currently investing tens of billions of dollars worldwide in order to satisfy global demand.
“Costa Rica is a fitting location for this important expansion of our assembly and test operations. The work we do here is critical to rebalancing the global semiconductor supply chain and supplying the industry with much-needed chips,” said Pat Gelsinger, CEO of Intel. “We appreciate the partnership, passion, and commitment from the government, the community, and the local ecosystem since we opened our first operation 25 years ago and look forward to many more.”
The company currently employs around 3,700 people, with job opportunities for more than 5,600 contingent workers.
“We create world-changing technology that improves the lives of every person on the planet,” said Ileana Rojas, Design Engineering Group and general manager, Intel Costa Rica. “The passion, commitment, and innovation of Costa Rican talent have been crucial for this evolution, which allow us to keep increasing our value for the corporation through our three centers of excellence, generating a positive impact.”
In addition to the R&D and assembly/testing site, the trio of operations includes a center of global services that designs, performs and transforms multifunctional business processes at a global scale across finance, human resources, sales and marketing and supply chain. Costa Rica is the major finance hub in the corporation with more than 440 employees working on finance modernization globally.
“For our country, being able to count on Intel these last 25 years has been a blessing, because the jobs generated by this company have translated into benefits for the entire country,” said President Chaves … This also tells us that there is outstanding human talent in the country to enhance the technologies of companies of this type.”
Success and Succession
As it happens, it is out of Intel leadership that the next leader of CINDE has emerged.
In April, CINDE announced Marianela Urgellés Batalla had been appointed as its new managing director. CINDE said her references and professional profile aligned with CINDE’s strategic vision for coming years: to continue supporting employment goals by attracting FDI as part of the agency’s joint work with the Ministry of Foreign Trade (COMEX) and the Costa Rican Foreign Trade Promoter (PROCOMER). “In 2022 alone, the results of this foreign trade triad climbed to a record number of 40 new investment projects and a gross employment generation of around 25,000 jobs,” CINDE announced.
At Intel, Marianela Urgellés Batalla most recently headed processes in charge of more than 450 employees in Costa Rica, Malaysia and the United States. During her 25-year career in the multinational sector, she has been recognized for her leadership in corporate services, finance, manufacturing, engineering and strategic programs for global teams in the high-tech sector.
“After a long career in the multinational sector, I gladly take on the challenge of collaborating with Costa Rica — and CINDE is an excellent place to do so,” she said. “I join a strong team comprised of professionals with many years of experience, together with young talent willing to continue making Costa Rica the perfect location for leading companies to fuel their development and with it, create employment for our people.”
