< Previous“I was just up in Buff alo, looking at the Erie Canal history, and the fi ght about the terminus of Black Rock versus Buff alo,” he says of the decision to pick the latter. “ ese things are real. You connect cities, and investment follows. People say, ‘ at’s a place I can be and should be.’”From Fallow to Fertile McLaren Engineering Group just moved its headquarters from New York to New Jersey, but make no mistake: McLaren is true blue to New York, where his innovation in professional engineer diving had its roots. “I dove in dams built years ago,” he says of the early days, “under piers built in the s and s, and saw things that had worked and stayed in place for , or years, and things that failed in years, but were hidden under water. I learned about the right and wrong way to build things in the water.”Along the way, McLaren saw an economic development opportunity literally lurking under the surface.“I’d dive under the piers that surround Manhattan,” he says, “come out and say, ‘Why is nobody here? is is valuable real estate.’ My conclusion was New York was built facing Central Park, and everything looked inward. e waterfront was where the rats and sailors lived. ere used to be an active pier at the end of every street. ey became dilapidated and abandoned.” en the water got cleaned up through the Clean Water Act, the areas became more attractive and a ferry system (NY Waterway) was launched by Arthur Imperatore Sr. connecting New York to New Jersey.“People realized this water connection, and all of these abandoned waterfront sites all of a sudden started to become valuable,” McLaren says. “We’ve worked on hundreds of waterfront sites in New York Harbor as they’ve gone from fallow ground to high rises and parks and restaurants and destinations.” e fi rm today is also helping design terminals for NYC Ferry’s expanding service. e next chapter in the region’s infrastructure will link Erie Canal-era transport concepts with today’s needs. e Port Authority and New York City Economic Development Corporation (NYCEDC) this fall announced the creation of the North Atlantic Marine Highway Alliance, which will seek to foster the use of barge services from Maine to Maryland and to off set the use of trucks and supplement rail cargo to and from the Port of New York and New Jersey.“NYCEDC’s Freight NYC plan underscores the potential that our waterways have to catalyze the city’s freight distribution network,” said New York City Economic Development Corporation President and CEO James Patchett. Freight NYC, announced in July, is a $-million plan to overhaul the city’s aging freight distribution systems through strategic investments to modernize maritime and rail assets and create new distribution facilities at sites located at Brooklyn Army Terminal and near JFK Airport. Patchett also sounded a theme in common with the multibillion-dollar JFK airport master plan: the need to catch up to the times:“In partnership with other members of the North Atlantic Marine Highway Alliance,” said Patchett, “we can develop a sustainable regional barge network that will support a st century economy.” From Fallow to Fertile McLaren Engineering Group just moved its headquarters from New York to New Jersey, but make no mistake: McLaren is true blue to New York, where his innovation in professional engineer diving had its roots. “I dove in dams built years ago,” he says of the early days, “under piers built in the s and s, and saw things that had worked and stayed in place for , or years, and things that failed in years, but were hidden under water. I learned about the right and wrong way to build things in the water.”Along the way, McLaren saw an economic development opportunity literally lurking under the surface.“I’d dive under the piers that surround Manhattan,” he says, “come out and say, ‘Why is nobody here? is is valuable real estate.’ My conclusion was New York was built facing Central Park, and everything looked inward. e waterfront was where the rats and sailors lived. ere used to be an active pier at the end of every street. ey became dilapidated and abandoned.” en the water got cleaned up through the Clean Water Act, the areas became more attractive and a ferry system (NY Waterway) was launched by Arthur Imperatore Sr. connecting New York to New Jersey.With two new international terminals, the $13-billion expansion of John F. Kennedy International Airport (right) is the latest example of infrastructure investment in the Big Apple, including the reopening of the Tappan Zee Bridge (middle) in September and the continuing mixed-use development of Hudson Yards (left).(l. to r.) Hudson Yards rendering courtesy of Related Cos. and Oxford Properties; bridge photo courtesy of Fluor Corp.; JFK rendering courtesy of Port Authority of New York and New JerseyMalcolm McLaren virtually invented the occupation of professional engineer diver.Photo courtesy McLarenby SAVANNAH K INGs avannah.k ing @ si t e s ele c t ion.c omINVESTMENT REPORT:Costa RicaA NATURAL HUB TO REACH THE AMERICAS & THE WORLDA NATURAL HUB TO REACH THE AMERICAS & THE WORLD146 NOVEMBER 2018 SI T E S E L E C T IO NFrom paradise, springs productivity.Stunningly beautiful and as rich with opportunity as it is in biodiversity, Costa Rica’s strategic location, robust platform of free trade agreements with preferential access to two-thirds of the world´s markets, innovative workforce, proven track record and unparalleled quality of life provide all the necessary elements to enhance corporations´ supply chain strategies and global reach. For years, the country’s lush rainforests and peaceful shorelines have served as a beacon for travelers. But its stable democracy and commitment to education has ushered in a new era for high-tech investments.Over the last three decades, the country has taken great strides to diversify its economy. e results are paying off in a major way. In fact, more than high-tech companies and of the Fortune companies have established successful operations in Costa Rica. Companies like Intel, Amazon, Allergan, Dole, P&G, Boston Scientifi c, Abbott, Hewlett Packard Enterprise and IBM have found success thanks to the country’s innovative and unique essence. Playing the Numbers GameIf you’re looking for accolades, Costa Rica has them in abundance. e country was named fi rst among High-Tech Exporters in Latin America of Industrial Products by the World Bank, fi rst in Future FDI in Central America and the Caribbean by the Financial Times, and a Top Choice for Establishing a Global Business Services Center in Latin America by the Hackett Group. According to the IBM Global Location Trends report, Costa Rica ranked among the top global destinations for high-value FDI above Switzerland and Hong Kong and was the only country in Latin America to join the exclusive group determined by IBM Consultants. In a land where sustainability is part of its DNA and scalability off ers agility, a strong trinity of elements form a living lab for life-centered solutions. A strong cluster of MedTech companies, a dynamic IT and high-tech industry with of the world’s top technology innovators and a strong commitment to biodiversity all work together to enable a collaborative environment for next-wave solutions. A prime example of this collaborative and innovative environment can be found in the nutraceutical sector. Costa Rica´s roots as an agricultural powerhouse run deep and continue to grow, but today, these same roots are also reaching into non-traditional areas like nutraceuticals — with companies using pharmaceutical-grade aloe or ipecac root to export for use in various health care products.A Health & Wellbeing Center to the World ese days, medical devices are Costa Rica´s No. export. Since , medical device exports tripled to reach nearly $ billion in . ere are nine times the number of life science companies in Costa Rica than there were in , leveraging the country´s capabilities for end-to-end solutions: from manufacturing to R&D, IoT and e-Health. e sector has grown more sophisticated and has gone from producing Class I to Class III medical devices for various uses like aesthetics, cardiovascular, endoscopy, dental, medication delivery systems, optics and neuro-modulation. “Costa Rica is home to life-science multinationals which export, day after day, medical devices that save lives around the world. ese companies face the challenge of constant reconversion due to the industry’s accelerated global transformation, where the technological component will mark the coming trend. Costa Rica is poised to take advantage of this, and we will undoubtedly continue to be the best strategic partner for the companies hoping to reach this goal,” says Jorge Sequeira, managing director of the Costa Rican Investment Promotion Agency (CINDE). CINDE is a private, non-profi t and non-political organization dedicated to attracting foreign direct investment. It has helped hundreds of fi rms settle in the country. Over the past years, the country has witnessed consistent growth Costa Rica’s human talent has become a key element for HPE’s strategy. From here, we work in developing new products and services, allowing the company to advance one foot ahead in the sector.”— Antonio Collantes, Site Leader, Hewlett Packard Enterprise Costa RicaCosta Rica’s human talent has Costa Rica’s human talent has become a key element for HPE’s S I T E S E L E C T I O N NOVEMBER 2018 147in FDI, with an average growth of . percent per year since . Since , Massachusetts-based Boston Scientifi c has invested more than $ million in Costa Rica to manufacture its medical products at two facilities: Boston Scientifi c Heredia (cardiovascular equipment) and Boston Scientifi c Coyol (endoscopy and urology). “Costa Rica has proven to be a compelling, performance-driven location for Boston Scientifi c. Key drivers for our success at two major sites in Costa Rica include highly committed, multi-disciplined local talent; cross-divisional engagement; growth into R&D, process development and lab competencies; and our close working relationship with CINDE, academia, and the government of Costa Rica,” said Randy Schiestl, vice president of global technology at Boston Scientifi c.Hewlett Packard Enterprise (HPE) has made substantial investments in Costa Rica since it set up operations in . Initially, the company opened its location to manage its IT services for one of its main clients, Procter & Gamble. Now it’s one of the largest private employers in the country and has recently expanded its operations in San José, where it focuses on supply chain and research and development. e latest $-million investment will add new jobs. “Costa Rica’s human talent has become a key element for HPE’s strategy. From here, we work in developing new products and services, allowing the company to advance one foot ahead in the sector,” said Antonio Collantes, site leader of Hewlett Packard Enterprise Costa Rica. With a population of . million and a labor force of . million, Costa Rica’s workforce sets the country apart. e nation has placed an emphasis on education. In addition to the country’s goal of becoming fully bilingual in the next decade through the Costa Rica Multilingual program, the nation trains students to pursue careers in the growing high-tech sector. A Logistics Platform to Reach the Americas and the WorldWhere else in the world can you go from the Caribbean to the Pacifi c in just fi ve hours?Costa Rica has been a meeting point for cultures and trade since its earliest days. As a crossroad in the heart of the Americas it’s easy to connect North to South, East to West. Native tribes used the land as a bridge to join their communities and fl ourish together. at same ancestral knowledge continues to be seen across the country today in businesses, education and opportunity. e country has leveraged this location APM Terminals will open the new Moín Container Terminal on the Caribbean coast in February 2019.Photo courtesy of APM Terminals148 NOVEMBER 2018 SI T E S E L E C T IO Nto enhance it with top talent formation in logistics, supply and engineering fi elds where university graduates grow by over percent annually. Combined with a robust network of free trade agreements, growing connectivity and infrastructure, Costa Rica is an ideal site to reach the Americas and the world. A free trade regime designed as a versatile framework enables individual companies to improve effi ciencies and provide better customer service. Free zones are developed by the private sector and are able to meet even the most demanding needs of multinational industry sectors such as health care and fresh or frozen goods.In , LatAm Logistic Properties opened its headquarters in San José as an industrial property company focused on the Latin American region countries of Costa Rica, Colombia, Peru and Panama. Jaguar Growth Partners, based in New York, are strategic partners in the development. Costa Rica’s strong middle-class population and stable economy led to the development of the -acre (-hectare) property in the city’s “Radial Coyol” logistics hub, which off ers easy access to the San José International Airport and the country’s two major highways: Route , the Interamerican Highway; and Route , which connects San José to the Pacifi c port of Caldera. “ e hub is centrally located with very good connectivity to both coasts and the main seaports on the Atlantic and Pacifi c,” explains Aris Stamatiadis, manager of Central America at LatAm Logistic Properties. “If we have to ship out to either the eastern or western parts of the U.S., that’s very easy to do. It’s very nearby the main population areas, not only in North America but also in South America. It’s a very strategic place to receive merchandise and distribute.”Stamatiadis notes that multinational companies including San Diego-based PriceSmart, Seattle-based Expeditors, Mexican dairy producer LaLa, Kraft-Heinz and Mexican electronic manufacturer Mabe are more comfortable with the Class A facilities for logistics available in Costa Rica.“One of the keys to PriceSmart’s success is a very effi cient and advanced logistics operation. Our new Regional Distribution Center in Alajuela, Costa Rica, will support this eff ort. Having a regional facility should enable PriceSmart to adequately stock multiple sales locations in Central America and positively impact service and value for our members,” said Rodrigo Calvo, executive vice president for real estate of PriceSmart Inc.Going East, West, North or South Is a SnapCosta Rica´s international trade dynamism has nurtured an ecosystem of players and suppliers ranked No. in quality of supplier base by the World Economic Forum, and premium partners to enhance supply chain strategies are no diff erent. e country has a host of global and local boutique, specialized fi rms in freight handling including Expeditors, Kuehne+Nagel, DHL, Fedex, UPS, Pegasus, Mudanzas Mundiales and Logitsa.Logitsa Cargo Service is a short distance away in Alajuela, Costa Rica, in front of the San José International Airport, and is one the country’s fastest-growing logistics companies. Founded in , the fi rm off ers customs brokerage, freight forwarding through air, ocean and land, bonded warehouse space and local transportation. Marvin Villalobos Álvarez, owner and CEO of Logitsa, says the country’s location and overall business climate is a major advantage for companies in terms of logistics. “Due to its strategic location at the center of Latin America, Costa Rica has become a preferred hub for companies to settle and invest,” he says. “With coasts on both sides of the country, ports in the Caribbean and the Pacifi c make available routing for cargo to and from diff erent places in the world. International airports in Costa Rica connect people and cargo with many cities in the world promoting the trading process.”The Juan Santamaria International Airport in San José. Photo courtesy of Aeris Costa Rica150 NOVEMBER 2018 SI T E S E L E C T IO N“ e business climate in Costa Rica is welcoming,” Villalobos says. “Companies in this country can thrive, and the economic and political stability provides a sense of certainty to investors.” Private organizations and the Costa Rican government make eff orts to ensure investors are well guided on the process they need to follow, and new regulations facilitate logistics operations to enhance performance under the free trade zone. Some regions off er more possibilities for optimized supply chain operations. For instance, Guanacaste in the North Pacifi c just inaugurated a new cargo facility at Daniel Oduber International Airport. Puntarenas in the Pacifi c Coast opened a new platform at the Caldera Port, and Dutch logistics titan APM Terminals is building a brand-new $-billion port on the Caribbean coast.Free Trade Powerhouse Flexes its MuscleAccording to Procomer, the agency in charge of promoting Costa Rican exports of goods and services, Costa Rica has free trade agreements which cover two-thirds of the world’s gross domestic product and over a third of the world’s population. Costa Rica is the only Central American country with a free trade agreement with China, and maintains free trade agreements that provide access to global trade partners including the U.S., Canada and the E.U. Companies choosing to make new investments in Costa Rica can take advantage of tax incentives at industrial parks and offi ce buildings throughout the country’s metropolitan areas. “For MNCs or logistics companies the Free Trade Zone regime can be a valuable tool to optimize its supply chain strategy.” says Jorge Sequeira from CINDE. “ e free trade zone in Costa Rica can allow companies, for example, to import goods free of tax and re-export free of tax. It provides incentives on tax exemptions on income, export, import and other duties for logistics services companies which meet its requirements. e regime is a longstanding program which meets World Trade Organization standards.”Several business parks off ering free trade zones exist around the country’s major metro areas, including Coyol Free Zone and Business Park in Alajuela, just . miles west of the San José International Airport. e high-tech park opened in and is occupied by several medical and advanced manufacturing companies including Medtronic, Abbott Vascular, Phillips and Moog. Also, in Coyol is BES Free Zone and Greenpark, where the distribution center for pharmaceuticals and medications of the National Insurance Institute of Costa Rica is located, as well as other industry leaders. La Lima Free Zone and Business Park is another state-of-the-art development in Cartago that caters to advanced manufacturing, life science, logistics, supply and services-based businesses which include Aligh Technologies, German electronics component manufacturer Zollner, Edwards LifeSciences and the future facilities of Swedish ostomy device manufacturer Coloplast.Handling Bigger Ships at a Better PriceSeveral key investments have helped to amplify the country’s logistical advantages, especially as larger ships are able to access the Panama Canal. In February, Netherlands-based APM Terminals is set to open Costa Rica’s newest deep-water port on the Caribbean coast. e -hectare Moín Container Terminal was built on an artifi cial island and is on track to become the most effi cient port in Latin America. APM Terminals operates a Global Terminal Network in countries. “Costa Rica is preparing to inaugurate much more than a container terminal. e country is inaugurating a new era in its commercial relations with the world, and this will have a direct impact on the country’s economy and an important advance in the global connectivity ranking,” said Morten H. Engelstoft, CEO of APM Terminals. e terminal’s ,-meter quay off ers an access channel that is meters deep and is equipped with electric container cranes and six Super-Post Panamax gantry cranes. e port will be capable of handling container ships of up to , TEUs. e new port is expected to raise commerce in Costa Rica by percent, according to a Qbis Socioeconomic Impact Study. e study estimates Costa Rica’s trade costs will decrease by up to percent. For exporters of perishables, like pineapples, the new port is expected to hedge shipping costs and may reduce overall trade costs by percent. “ e new APM Terminal is going to change the whole way of handling cargo in and out of Costa Rica,” says Carlos José Zúñiga, president of Grupo Mudanzas Mundiales, an integrated logistics, storage and mobility company focused on international trade. “Imports and exports will be expedited. It’s saving a lot of time, and the security that this new port will give you in the handling of cargo and the time savings will benefi t the business.” e Port of Caldera in the Central Pacifi c is a key to Costa Rica’s logistics success as well. Over the last eight years, a $-million investment has increased its container unloading capacity from to containers per hour and has more than doubled overall productivity. S I T E S E L E C T I O N NOVEMBER 2018 151Costa Rica152 NOVEMBER 2018 SI T E S E L E C T IO NConnectivity Gives Businesses a BoostAs the main point of entry to Costa Rica, Juan Santamaria International Airport in San José has weekly fl ights to destinations around the world. Each year the airport receives more than . million visitors and is the second-busiest airport in Central America after Tocumen International Airport. Increasingly, the country sees greater connectivity by air. Businesses fl ourish as a result. “Our route development program has been able to signifi cantly increase fl ights to Europe, including carriers like Air France, Lufthansa, Edelweiss and KLM,” says Rafael Mencia, executive director of Aeris. “Our service to the United States continues to be more solid and diversifi ed with American Airlines, United, Southwest, Spirit, Jet Blue and Delta as the main carriers. We have direct fl ights to the main cities in the United States including New York, Miami, Dallas, Los Angeles, Fort Lauderdale, Charlotte, Chicago, Houston, Phoenix, Minneapolis, Denver, Boston and Baltimore; as well as to Canadian destinations such as Toronto, Calgary and Montreal. e development of tourism is the main reason for the traffi c increase and the success of the air service development program, but it’s complemented by the advantages and increased air cargo given the country´s export capacity. us, it provides a sound and more comprehensive business model for airliners. Costa Rica has a very good name in Europe and the United States thanks to political stability and good economic development.”In the past months, the airport has handled , metric tons of imports and nearly the same amount of exports. Cargo is handled by UPS, Lan Cargo, FedEx Express and DHL, among others.In July, DHL opened its expanded customer support facility in Heredia to serve its Americas region. e company’s investment of $. million expanded its fi nancial, customer and IT services as well as its human resources operations. More than people work at the facility, with plans for more in the next two years. “Our divisions are growing, bringing more jobs to Costa Rica as the need for support in various areas increases,” said Mike Parra, CEO of DHL Americas Region. “ is new DHL Customer Support Facility refl ects the shift of DHL to more value-added activities, such as digitalization in customer service to enhance the customer experience.”DHL has percent of the market share in shipment volume in Central America and operates fl ights to and from Costa Rica, Guatemala, El Salvador, Honduras, Panama, Mexico and Miami. e Daniel Oduber International Airport in Liberia, in the Guanacaste region, operates more than weekly fl ights to cities in the U.S. and Canada. Primarily used as a passenger airport, its cargo capacities are growing with its convenient access to the Pan-American Highway. With Costa Rica’s strategic location, moving goods into and out the country is easy. In , some percent of Costa Rica’s exports left the country via air, . percent by sea and percent on land. With ports on both the Caribbean and Pacifi c Coasts, transporting products to either coast of both North and South America takes less time and saves companies money. e new state-of-the art Caribbean port in Costa Rica will complement the new expansion at the Panama Canal. ough the canal has an increased capacity, certain Post-Panamax vessels are too large to pass through the canal. is makes Costa Rica an ideal platform for freight fragmentation, as well as a more productive point for cargo handling into Central America — a market of million people.“We have done several analyses with experts to assess that effi ciency of cargo handling to Central America. Just by lowering freight in Moín as opposed to Colon, companies can save $, for every -foot container in land transportation alone, not to mention the time saved on at least a kilometers distance,” explains Karin Lachner, head of marketing for CINDE.Costa Rica’s logistics advantages are only going to continue to grow as the market matures. e opportunities are as bountiful as the land itself. This Investment Report was prepared under the auspices of the Costa Rican Investment Promotion Agency (CINDE), a private, nonprofit and apolitical organization that provides investment services for free. For more information, visit www.cinde.org or call its offices in New York at 212-984-0631 or San José, Costa Rica at 506-2201-2800. e country is inaugurating a new era in its commercial relations with the world, and this will have a direct impact on the country’s economy and an important advance in the global connectivity ranking.”— Morten H. Engelstoft, CEO of APM Terminals.Next >