Grupo Argos President Jorge Mario Velasquez talks about 90 years of the company – Business – Economy

27 February, Grupo Argos celebrates 90 years of operations in Colombia and 20 other countries. Going forward, it plans to make significant investments in new projects in non-conventional renewable energy, road and airport concessions, besides continuing to expand its cement business.

However, to bring these plans to fruition, Jorge Mario Velasquez, President of Grupo Argos, Commenting that it is necessary to have regulatory certainty and stability in the rules of the game.

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He also talks about the future of this holding company after the exchange of shares with Nutresa and Sura, and does not rule out that the cross-shareholding between Grupo Argos and Sura may later be sold to a third party. May go.

As you turn 90, what will be your assessment of the company?

The company began as an enterprise in 1934 and last year it achieved the best results in its history, not only in numbers, but also in possibilities for strategic change. At this time we are experiencing the birth of the fifth phase with the transformation of investments in the United States and the exchange of shares with the Nutresa and Sura groups. It is a story created by many people over nine decades, there is not a single person who can say “I created this story.” The company democratized its ownership, listed very quickly on the stock market and today is owned by 19 million Colombians through pension funds.

(Also: Grupo Argos to invest $2 billion in 2024 for infrastructure development)

What’s next for the company after the share exchange with Nutresa and Sura?

Since we signed the macro agreement in the middle of last year, I have said that this agreement is balanced, fair and equitable for all parties. Grupo Argos sold its 9.9 percent stake in Nutresa in exchange for increasing its participation in Grupo Sura to focus on the infrastructure business and acquire economic rights over 50 percent of the country’s most important financial group. . It is not the intention or business of Grupo Argos to consolidate or control Grupo Sura as the Grupo Argos entity is an infrastructure and construction materials holding company. We are studying options, but in the medium term I see two separate organizations, each with its own share structure., are probably listed on the New York Stock Exchange and focus on their own businesses. We are going to give it time, we are studying it and we will do it in the changes agreed with the shareholders, but increasingly these groups will specialize in their own businesses.

Can these cross-shareholdings be sold to other interested parties?

I do not deny, but I do not confirm that we sell shares, there may be many ways and mechanisms. I believe both of these groups are going to be more specialized in the future without cross-shareholding and will be listed on an exchange such as the United States, which has liquidity, value realization and appropriate mechanisms for companies of this type. size. , Whether it will be sold, combined or liquidated has not been defined.

What is the size of Grupo Argos today?

Currently, Grupo Argos has cement businesses (Cementos Argos), energy (Celsia), concessions (Odinsa) and real estate (urban development business). Its total assets are approximately 53 billion pesos, It sells 22.6 billion pesos on a consolidated basis, its EBITDA is 5.5 billion pesos and its net profit in 2023 is approximately 1.5 billion pesos.

(In other news: This is how Grupo Argos was born, which celebrates 90 years of operations in Colombia)

What are the development plans for 2024?

This year marks a new era for the cement business following the combination of assets in the United States with Summit Materials, valued at approximately $9.4 billion, 12 million tonnes of cement, ports, 300 concrete plants and 5,500 million tonnes of aggregates. This is a game-changer because it will help us continue growth in the United States.

Which new markets do you hope to reach with the cement business?

In the United States, through Summit Materials, we want to expand the aggregates business. We are also studying expansion options for grinding facilities in Central American countries (such as Guatemala). Last year we expanded export capacity from Colombia with an investment of more than $40 million. This is in addition to the investments we are making in plant modernization in the Dominican Republic and distribution and digitalization in Colombia.

And what’s next in the energy business?

Celsia has a clear call to become a very significant player in non-conventional renewable energy. Last year, there was a divestiture of its assets in Central America, which brought in $400 million. It has 17 solar plants in Colombia, with about 300 MW installed and projects for an additional 400 MW. We also announced a 218 MW wind project in Peru. At Celsia we are confident of remaining a relevant player in the non-conventional renewable energy and energy transmission and distribution businesses in the region.

How do you see the current circumstances to make that growth a reality?

It must be said very clearly, regulatory stability and the rules of the game are a fundamental element for investment in this sector, infrastructure and many other sectors. In an environment of volatility, regulatory uncertainty and regulatory changes are elements that do not help in accelerating investment. We have said that we will continue to think about investing in Colombia if the conditions for permits, procedures, licenses and construction of transmission lines are met. At the EL TIEMPO Forum, the President of Ecolgen (Natalia Gutiérrez) said that renewable energy projects are very difficult to materialize. Out of every 10 MW awarded in the auction, only six were built, it indicates the difficulty that is being experienced in going from the structuring of a project to its implementation. What needs to be noted is that, as a country, we need to look for mechanisms to accelerate this investment. This also happens in road and airport concessions. To the extent that there is stability in rules and guarantees in the sources of payment for long-term contracts, this requires not only national actors, but also international actors in addition to financiers. It is important to emphasize that regulatory stability is very important to guarantee investment.

How is the sale of Celsia’s wind farms in La Guajira progressing?

Celsia has said that there have been some delays in Acacia 2 and Camellias for different reasons: environmental licensing, consultation with communities and the entry of the Kolektora transmission line. What the board has decided is that all options including a sale will be evaluated. The fact that La Guajira has not only Celsia, but also about 2,500 MW of projects is something that should make us move forward as a country, Explain the strengths and make every effort to minimize the obstacles. If that happens, Celsia will without a doubt invest in La Guajira, but we cannot wait forever and keep the equipment we have bought there for the next five years. Then, projects emerge in other countries where they can be used. I am confident that all projects, not only of Celsia, but also of other generators, can be unblocked as the country needs to install new generation capacity.

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How has the government’s cooperation been in overcoming these difficulties?

I hope that the discussion that has started in the country after Celsia announced one of the options for the sale of these projects will work so that between all actors we can find ways while respecting institutions, communities and permits. Environmental issues – to accelerate the creation of these initiatives. If there is a clear indication of being able to build those wind farms, the organization would be interested in building them.

What will be at stake on infrastructure?

for this year We announced an investment of 2 billion pesos to be executed mainly in Colombia. In addition, we have airport and road projects under construction and development worth approximately $4,000 million. Most relevant is the private initiative we are preparing to expand El Dorado Airport and increase the number of passengers transported from 40.5 million last year to 65 million. Similarly, there is another initiative to improve the runways and taxiways. These are investments worth $2.5 billion and we are in the process of presenting them. The project is in the process from pre-feasibility to feasibility, which takes time. There is a certain urgency to doing this expansion and ANI and Aerocivil are aware of this need. The initiative may take 4 or 5 years between approval, contract, final design, construction and operation. Another project is the second airport in Cartagena, with an investment of 800 million dollars, in addition to a series of road projects such as the Perimetral de la Sabana, the Conexion Centro and the extension of the Oriente Tunnel in Medellín, which will involve an investment of 1.2 billion pesos. There should be dual carriageway.

How do you see the transport ministry’s approach to these initiatives?

These initiatives are being studied and the processes are being implemented appropriately. Security and stability in regulations are very important for these investments to materialize. A project of this magnitude requires a long-term approach to monetizing the investment and sustainability and payment sources are critical. For this reason, I have stressed that it is very relevant that future legalization schemes and tolls are maintained as contractual payment mechanisms for concessions. Assessment is viable as a payment mechanism, but it should be complementary or alternative, not a substitute. What is already contractually binding should not be amended.

Are you interested in railway projects?

I would say never say, the country is in debt to the railways. These projects require very careful planning to be able to do them in sections where there is substantial load. The rehabilitation of the railway sections between the center of the country and the Atlantic coast is a very important first step, and reactivating the section between Sogamoso and Bogotá is an early win. We have to look at how projects are structured.

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