Report: Surprisingly Different Panama
Media: Lufthansa Inflight Magazine
Publication Date: September 2016
The Panama Evolution
While growth predictions for Panama’s economy rightly centre on the canal, the country also offers other exciting opportunities.
When the Meyer’s Group moved into Panama in 2006, there was no question that its maritime division would remain at the heart of its operations. Originally a Venezuelan company, its maritime heritage can be traced back more than 100 years. “Despite our experience, moving into Panama was tough at first as there were many new companies setting up and competing for business,” Michel Mittelmeyer, CEO of the Meyer’s Group, admits. However, Panama’s growing economy provided fertile ground for expansion. The numbers tell the story: “When we started, we had just 20 employees; now we have more than 600, and we record on average 6% growth per year.” Expectations are that the expansion of the Panama Canal will boost Meyer’s maritime business, such as its towing and piloting services in Panama’s ports. However, says Mittelmeyer, other economic activities also have the potential to shape the country’s economy in the years ahead, and he is confident that the Group’s investments in Panama’s construction and agricultural sectors will pay off.
The opening of the Panama Canal expansion in June is widely seen as a game changer. It has tripled the size of ships that can now travel the canal, fuelling hopes that Panama can gain market share from rival Suez and US land routes. By 2021, the Panama Canal Authority is hoping the project will bring in US$2.1 billion per year in added revenue, representing 2.8% of Panama’s GDP. The Meyer’s Group expects about 7-10% growth in its operations as a result of the expansion and has rolled out new tugs and technologies ahead of the opening of the widened Panama Canal. “I firmly believe that the new canal will not only be positive for Panama, but for the world,” says Mittelmeyer.
The Meyer’s Group has also become a key player in infrastructure construction in Panama. The firm was involved in the construction of a new metro line and a new highway, amongst other projects. “We invest a lot in machinery,” explains Mittelmeyer. This makes Meyer’s one of the go-to-firms for civil construction. Panama City, he says, is already well developed, but there are other areas of the country that offer tremendous potential. Revitalising the agricultural sector has also become a top priority for Panama, and the Meyer’s Group has turned its attention to the production of dairy and pork. Thus far, Panama’s agri-food businesses are facing a number of challenges, including fragmented land ownership and limited access to financing. “Most food products in Panama are imported and hence expensive,” says Mittelmeyer. However, efforts to address the sector’s structural issues are under way and are driven by the country’s desire to move beyond its purely service-based economy. “I would like us to become one of Panama’s leading agro-food businesses. I believe that the production and the distribution of organic and more natural food also offer excellent export opportunities. We are open for business with Europe and the rest of the world.”