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COSTA RICA INVESTMENT REPORT | LIFE SCIENCES CASE STUDY: BAYER
From Site Selection magazine, May 2022
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‘A Natural Choice’

Nearly 45 years after first arriving in Costa Rica, Bayer continues to reinvest. Here’s why.

COSTA RICA INVESTMENT REPORT | LIFE SCIENCES CASE STUDY: BAYER
Bayer’s facility at Coyol, expected to start production in 2024, will employ approximately 250 people and supply products to over 100 countries.
Photos courtesy of Bayer

by Adam Bruns
W

hen Germany’s Bayer Group in 2015 opened a $12 million, 75-job plant making non-reversible permanent contraceptive devices in the Zona Franca Metropolitana in Heredia, Costa Rica, it was the global company’s first medical device manufacturing investment in Latin America. But it wasn’t the first time Bayer had realized Costa Rica’s value.

The company has had a presence there since 1978, and has based its regional headquarters for Bayer Central America and the Caribbean there since 2008 as part of a life sciences sector that employs 43,000 in the republic.

In 2021, the company reupped its commitment to Costa Rica when it announced land purchase and construction of a new $200 million production site in the Coyol Free Zone in Alajuela for the production of long-acting reversible contraceptives (LARCs). Global free zones expert Zoë Harries, told me last year that Coyol “stands out for the recruiting and training services it provides for its tenants. The park allocates 12% of its 107 hectares for preserved and green areas. Constant government support for multinationals has been provided to ensure operational continuity during unprecedented times. Providing constant communication and guidance to multinationals on new regulations, business facilitation and policies, as well as rigorous infrastructure, have allowed companies to work from home, maintaining quality standards.”

The Costa Rica project is part of a €400 million (US$432 million) investment that also includes expansion of a site in Turku, Finland, in order to provide 100 million women and girls with access to family planning by 2030, especially in low- and middle-income countries (LMICs). Both sites also will produce hormonal implants and hormonal intrauterine systems (IUS).

The 28,000-sq.-m. (301,400-sq.-ft.) facility at Coyol, expected to start production in 2024, will employ approximately 250 people and supply products to over 100 countries.

“By giving women the chance to determine their own future, access to family planning enables them to raise healthier families and to make an even greater economic contribution,” said Matthias Berninger, senior vice president of public affairs, science and sustainability for Bayer AG. The company in March 2022 reiterated its intent to invest around €2 billion into its pharmaceutical business’s manufacturing and supply chain capabilities, including the Costa Rica project.

Bayer Medical Alajuela Project Operations Lead Jimmy Suazo in April 2022 responded to questions from Site Selection.

Your commitment to a new production site in Alajuela in October 2021 came at the same time as another plant planned for Finland. Describe how your team went about the location decision-making process for these major investments … timeline, geographic scope, major criteria, turning points in the process.

BayerJimmySuazo

Jimmy Suazo, Project Operations Lead, Bayer Medical Alajuela

Jimmy Suazo: Bayer is excited about our commitment to provide 100 million women with access to modern contraception, an idea that is based on the United Nations Development Goals 2030. Bayer can only reach this goal by expanding supply capacity. Our existing facility in Turku, Finland is Bayer’s global center of expertise and our innovation hub for polymer-based pharmaceutical technology and long-acting reversible contraceptives (LARCs). We evaluated multiple locations across the world and chose Costa Rica based on its significant capabilities in medical device manufacturing, access to qualified workforce with technical capabilities, a strategic location with policies supporting private investment and a strong record of private and public sector collaboration. Costa Rica’s commitment and leadership in sustainability was an additional factor in our decision.

How did the company’s past experience operating in Costa Rica influence the decision?

Jimmy Suazo: Since first beginning operations in Costa Rica in 1978, Bayer has been proud of the dynamic and growing relationship that we have forged in the country, to enable and support goals of our healthcare and agriculture businesses. Our initial experiences were in research and development in the agricultural sector where we benefited from the favorable conditions for innovation and testing of new products through the Cañas site in Guanacaste and our Experimental Station in Guácimo de Limón.

Since 2014 we have been operating a medical device manufacturing site in Heredia which has experienced increased production volumes along with greater technical capabilities in order to meet our business priorities. We have seen firsthand the strong commitment for access to qualified workforce with technical capabilities, operational excellence and competitiveness.

Costa Rica is home to operations from 13 of the top 30 global medtech OEMs.

In 2018 Bayer established a Shared Services Center in Costa Rica which provides finance, accounting & business support services to our operations in the Americas.

These positive experiences, coupled with continually growing capabilities within the country and ongoing strong private and public sector collaboration made Costa Rica a natural choice for our recent investment.

In the company’s 40 years in Costa Rica, how has the business climate evolved, and what are the challenges that remain there and in the broader region?

Jimmy Suazo: Our commitment to investment in Costa Rica has developed greatly over the last 40 years, encompassing five physical locations with a sixth on the horizon at the completion of Bayer Medical Alajuela production site for medical devices. We employ almost 1,000 colleagues in the country. We are excited about doing business in Costa Rica. In terms of evolution of the business climate, the Free Trade Zone and reinvestment incentives, a stable geopolitical landscape, and approachability and responsiveness of CINDE, academia and the Costa Rican government continue to be attractive considerations.

The No. 1 exported product from Costa Rica, medical devices are also the fastest growing, increasing by 33% in 2021.

Proactively planning for topics such as permitting and infrastructure was essential to meet our ambitious timelines. We also benefited from developing a shared vision of success for this investment project together with CINDE and the Costa Rican government.

The Costa Rica plant is part of a broader commitment to invest more than €400 million toward providing 100 million women and girls with access to family planning by 2030, especially in low- and middle-income countries. Describe your perception of how Costa Rican society and business view women, especially when compared to other countries in Latin America and beyond.

Jimmy Suazo: Costa Rica has made a strong commitment to educating and developing a qualified workforce. We have been especially impressed by the women we have interacted with, who are all highly capable, confident and ambitious in a wide variety of fields that interest them (medical devices, engineering, public relations, communications, public sector and government alike). It is evident that they are as seen as equal and important partners, and have broad support from their country to pursue their careers and dreams.

Adam Bruns
Managing Editor of Site Selection magazine

Adam Bruns

Adam Bruns has served as managing editor of Site Selection magazine since February 2002. In the course of reporting hundreds of stories for Site Selection, Adam has visited companies and communities around the globe. A St. Louis native who grew up in the Kansas City suburbs, Adam is a 1986 alumnus of Knox College, and resided in Chicago; Midcoast Maine; Savannah, Georgia; and Lexington, Kentucky, before settling in the Greater Atlanta community of Peachtree Corners, where he lives with his wife and daughter.

   



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