OpportunitiesforIndi anExportersintheColo nFree Zo

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Produced for: Market Research “Opportunities for Indian Exporters in the Colon Free Zone” Embassy of India Panama April 2007 Produced by Investigaciones Mercadologicas

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FOREWORD The Colon Free Zone (CFZ), located at the northern tip of the Panama Canal, is one of the largest free trade zones in the world. Last year, the total trade turnover in this Zone was around US$14.4 billion, with US$6.8 billion imports and US$7.6 billion re-exports. The Zone is used extensively by neighbouring countries of Panama, viz. Colombia, Venezuela, Central American and Caribbean States and others, who make purchases in this local market instead of importing these products from far off continents. The well established business network in the CFZ makes it a convenient commercial hub for exporters as far off as in East Asia, and for buyers in Latin America. The rates of growth in the CFZ are indicative of its increasing popularity. This study is intended to inform the Indian exporting community, which has so far not made use of the CFZ and the opportunities it offers, to penetrate the South American, Central American and Caribbean markets. It is hoped that this study will generate interest amongst Indian exporters who are seeking to build commercial collaborations with Latin American partners. I would like to take this opportunity to thank Shri B. Rajagopalan, First Secretary (Com) in the Embassy who has worked hard to give final shape to the Market Survey Report as well as to Mr. Manuel Alvarado Guardia, President, Investigaciones Mercadologicas, SA for conducting the Market survey and preparing the report. (Ashok Tomar) Ambassador

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I n d e x Introduction ……………………………………………………………………………………….. 4 Objectives of the Study………………………………………………………………………….. 5 Information on Colon City and the Colon Free Zone………..……………………………… 6-16 Analysis of imports from India…………………………………………………………………. 17-24 Market Survey …………………………………………………………………………………….. 25-36 Recommendations for Indian exporters …………………………………………………….. 37-40 How to do business in Colon Free Zone …………………………………………………….. 41-50 Annexure 1 “Detailed data on imports into and re-exports from Colon Free Zone”…. 51-64 Annexure 2 “Methodology used for the quantitative Study”.……….…………………... 65-67

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Introduction The following report is the result of marketing research conducted in Colon Free Zone during March and April. The main objective of the study was to examine the opportunities for exports from India to Colon Free Zone and to determine the feasibility of establishing a warehouse in this Zone, to be operated by an Indian private party which may have connections or ties with the Exporting Agencies from India. The market research consists of two parts: a) Statistical information (internal sources) Research plan b) Quantitative surveys (external sources) Republic of Panama, 30/04/2007

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Objectives of the study In more specific terms, the objectives of the marketing study are: Establish the product groups and value of imports into and re-exports from Colon Free Zone. Establish the regions and destination-countries with value of re-exports from Colon Free Zone. Analyze the exports being done by other exporters from Asia (PRC, Taiwan, Hong Kong, South Korea and Japan) to Colon Free Zone, in order to provide a comparative statement. Establish the product groups and estimated volume / value of imports from India. Analyze the strengths, weaknesses, challenges and opportunities for imports from India. Determine the feasibility of having a warehouse arrangement which could facilitate logistical transactions of goods imported from India. Analyze the utility of establishing a sales office by Indian exporters and also provide cost estimates.

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Information on Colon City and the Colon Free Zone Investigaciones Mercadologicas April 2007

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Information on Colon city and the Colon Free Zone The City of Colon - Colon is the second largest city in the Republic of Panama. Located at the Atlantic entrance to Panama Canal. Colon is the Capital of the Province of Colon. - Panama's Colon Free Zone ensures its importance as a crossroad for worldwide merchandise traffic. One of the largest port/haven systems in Latin America which even surpasses the Port of Miami. Included are the Manzanillo International Terminal, Colon container Terminal, Panama Port Terminal and Colon Port Terminal.

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b) Colon Free Zone It started operations in 1948 and occupies 400 hectares of land. It is located near the Atlantic Sector Entrance of the Panama Canal. Divided in two big areas: one located in Colon City, segregated from the city itself by a wall; and the other relatively new, in the France Field area, which is designed for warehouses covering 130 acres and at a distance of only 400 yards from the Colon commercial sector. There are more than 2000 companies presently in the Free Zone. They can count on all services and facilities offered by the Free Zone, for importing, storing, assembling, re-packing and re-exporting products from all over the world: from all types of electrical and electronic appliances to pharmaceutical products, liquor, cigarettes, office and home furniture, clothing, shoes, jewellery, toys, etc. It is considered the “Trading Showcase” of Central and South America as well as of the Caribbean. Colon Free Zone (“CFZ”) is the largest free zone in the Americas and the second largest in the world. CFZ receives yearly more than 250,000 visitors from all parts of the world, mainly from countries such as Haiti, Jamaica, Costa Rica, Venezuela, Colombia, United States and Ecuador. CFZ imported and re-exported goods valued at US$6.8 billion and US$7.6 billion respectively in 2006 (Chart-1, page 11). It is one of the leaders in global trade. According to statistics, the country noted as the largest importer of goods from CFZ is Venezuela (US$1.58 billion).

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China exports the largest volume of goods to CFZ (US$1.9 billion). In 2006, re-exports from CFZ increased 15.1% in value and 9.6% in volume, while the imports increased 9.7% in value and 6.9% in volume. The CFZ success is due to a combination of factors such as the geographical location of Panama at the crossroads of the world, the Panama Canal, the fact that the US dollar is legal tender, a large banking center at its doorstep, a well developed insurance and reinsurance industry, several state-of-the-art container ports and not very onerous business requirements. Due to its geographic location, the CFZ is a major factor in channeling goods from large exporting countries to consumer markets in Latin America. Most Free Zone merchandise is transshipped from Colon to other parts of the Western Hemisphere and Europe. Imports into the CFZ come mainly from the Far East (63%). The largest individual supplier of the CFZ in 2006 was China (28%), followed by Hong Kong (18%), Taiwan(10%), United States(9%), Japan(3.6%), Korea(2.4%), Mexico, France, Switzerland, Italy, Thailand, Puerto Rico, Switzerland, United Kingdom, Malaysia and Netherlands. These countries supplied more than 85% of all CFZ imports. Venezuela, the largest buyer of merchandise, imports around 20% of all CFZ re-exports. Other principal purchasers are: Colombia, Panama (domestic market), Guatemala, Ecuador, Dominican Republic, Costa Rica, Ecuador, United States, Honduras, Cuba, El Salvador, Mexico, Brazil, Chile, Peru and Haiti. These countries buy approximately 65% of all re-exports from the CFZ. The CFZ is administered as an autonomous institution of the Panamanian government. The CFZ Administration is operated and managed by its Board of Directors, an Executive Committee and the General Manager of the institution. Corporations or individuals of any nationality may establish operations in the CFZ without obtaining a commercial license or investing any minimum amount of capital. Firms interested in operating in the CFZ must file an application and provide a copy of the articles of incorporation and bank references.

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Companies operating in the CFZ can be engaged in four types of sales operations: Re-export of goods from CFZ warehouses Sales to clients located within Panama’s customs territory Direct sales to foreign clients in which goods are shipped from a third country manufacturer without physically arriving in the CFZ Transfers in which sales are made to other CFZ firms. Companies operating from the CFZ enjoy many trade advantages along with special tax incentives such as tax credits, depending on the number of Panamanian employees, and special income tax rates on foreign trade operations. Companies in the free zone do not pay corporate income tax. Dividends paid on profits from foreign trade operations and from direct sales are not subject to the dividend tax. Merchandise arriving at, stored in, or leaving the CFZ destined for a foreign country is exempt from taxes, charges or any type of tariff. Also, CFZ companies are not subject to any type of federal or municipal tax. c) Transportation System Colon Free Zone is easily accessible from Panama City. Motor vehicles take 55 minutes from Panama to Colon. Panama has two modern airports– one international and the other providing services for regional airlines and all types of private planes. Helicopters and light aircraft are commonly used. Public bus and taxi services are available. Panama Transcontinental Railroad also provides services for passengers and freight. Panama Canal Transit.

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Chart 1 Statistics of Colon Free Zone Total Imports and Re-exports during 2000-2006 (P): Provisional statistics Source: Colon Free Zone Department of Economic Studies

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23 33 30 26 23 30 32 Cigarettes 76 81 62 45 592 89 65 Bed linen 94 151 103 87 441 27 32 CDs/DVDs blank & recorded 98 136 110 83 100 65 57 Liquor beverages & beer 86 120 108 76 109 120 147 Clocks and Watches 51 122 116 94 121 153 209 Gold Jewellery & Other precious metals 154 114 205 162 125 136 145 Audio and Video Equipment 122 164 155 119 146 165 212 Artificial Synthetic Fibre 163 200 164 118 141 154 155 Perfumes & Cosmetics 156 191 183 148 145 159 138 Linen 439 565 485 443 88 96 318 Pharmaceutical products 421 515 401 315 309 337 322 Shoes and Sport Shoes 368 478 397 348 459 501 539 Radio, TV & Communication Devices 881 1,096 851 618 719 786 671 Textiles 2006(P) 2005 2004 2003 2002 2001 2000 Custom Tariff VALUE : US$ MILLION THE MOST IMPORTANT PRODUCT GROUPS (2000-2006) REGISTERED IMPORTS COLON FREE ZONE PRODUCT GROUPS 2000 2001 2002 2003 2004 2005 2006 (P) Note: For detailed break up, please refer to Annexure 1 (pages 52 to 56) Chart 2 (P) Provisional Statistics (January-September)

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COLON FREE ZONE REGISTERED RE- EXPORTS THE MOST IMPORTANT PRODUCT GROUPS ( 2000-2006 ) VALUE : US$ MILLION Chart 3 Note: For detailed break up, please refer to Annexure 1 (pages 57 to 60) (P) Provisional Statistics (January-September)

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Chart 4 Main exporters from Asia (China, Taiwan, Hong Kong, South Korea and Japan) to Colon Free Zone During the period 1996 to 2006 the most important exporters to Colon Free Zone were: 1) HONG KONG: $13,601 million 2) CHINA: $ 6,170 million 3) TAIWAN: $ 5,986 million 4) JAPAN: $ 3,325 million 5) SOUTH KOREA: $ 2,155 million Sources: Colon Free Zone Administration Colon Free Zone Users Association In depth interview

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Analysis of Imports from India Investigaciones Mercadologicas April 2007

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Introduction Statistics provided by the Colon Free Zone (CFZ) Administration as well as the Market Survey conducted as part of the study, show a very low level of Indian exports to the Zone. The average annual exports from India to the CFZ have been US$40-45 million up to 2004. During the last two years, these exports have risen to around US$57 million. India´s share in global exports to CFZ is presently around 0.84%. The bulk of Indian exports to the CFZ are textiles and clothing, and some aluminium ware. There is no Indian company present in the Zone. The Market Survey conducted as part of the study shows quite clearly that our low commercial presence is mainly on account of our physical absence from the Zone and the consequent lack of knowledge among buyers about Indian products. The CFZ has never been used by Indian exporters, despite the fact that there are no obstacles for India to do business there. The following charts give details about the kind of products exported by India to CFZ as also the views of buyers in CFZ about Indian products.

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Chart 7 Imports from India during the period 1997-2006 The total value of imports from India during the period 1997 to 2006 was $446.52 million. Source: Colon Free Zone Administration “Statistics and census” (P): Provisional Statistics

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Imports from India (Cont…) (Most important product groups) Source: Colon Free Zone Administration/“Statistics” (P): Provisional Statistics

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Source: Colon Free Zone Administration/“Statistics” (P): Provisional Statistics Imports from India (Cont…) (Most important product groups)

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Source: Colon Free Zone Administration/“Statistics” (P): Provisional Statistics Imports from India (Cont…) (Most important product groups)

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Source: Colon Free Zone Administration/“Statistics” (P): Provisional Statistics Imports from India (Cont…) (Most important product groups)

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Source: Colon Free Zone Administration/“Statistics” (P): Provisional Statistics Imports from India (Concld.) (Most important product groups)

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Market Survey Investigaciones Mercadologicas April 2007

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Market Survey A sample study was conducted among Colon Free Zone’s regular customers on the places of origin of the products sold, types of products most sold, the destination points of re-exports, etc. The size of the sample study was kept at 100 customers. The Free Zone's consumer is well aware of what product he needs. His expectations are strongly related with “price and quality”. For the consumer, it is also the meaning of a “good deal”. A combination of good price and service are strong elements in the decision making as to where and what to buy. A “good product” is defined as sturdy with good quality. China and Taiwan, followed by Hong Kong, Japan and USA are the countries which were perceived by the customers as supplying most of the products to CFZ. Indian products are not well known in this market. Indian products are mainly associated with incense, “home decoration products/ vases and women's clothes”, “textiles, perfume and table linen”. Nevertheless, 4 out of every 10 CFZ customers interviewed had experience with Indian products, and their qualification of such products was very favourable. The following pages will present a scope of the attitudes, expectations and opinions of the CFZ customer.

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When you think of India, what products come to your mind? Sample= 100 Most of the cases did not associate India with any product in particular. India is more associated with incense In 2nd place with “home decoration products/ vases and women clothes”. In 3rd place were “textiles, perfume and table linen” Source: Quantitative research Chart 8

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Have you ever bought products made in India? Sample= 100 4 of every 10 cases under study, have bought products made in India, and qualify them as “Excellent". The experience was good: Durability Quality finish The products sold well in the market Good textile material Source: Quantitative research Chart 9 Why have you never bought products made in India? Chart 10 Sample= 56 The most important reason for never buying products made in India was “lack of knowledge”

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Which of these phrases compare best or how do you feel about the Indian products that you bought ? Sample= 44 Among those who have dealt with Indian products, the qualification of the experience was “excellent” and is rated as very significant (98%) in the scale of bipolar evaluations. The main reasons for such qualifications are: Quality Durability/endurance Good market demand Source: Quantitative research Chart 11

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In your opinion, which Indian products will be more successful in Colon Free Zone? Sample= 100 -The product groups found more successful: “Furniture”, “Incense”. “Clothes”, “Perfume”, “Table clothes”, “Jewellery” and “Ceramic vases”. These are the products often associated with India. Source: Quantitative research Chart 12 What will you recommend for an Indian company to achieve success at the Colon Free Zone? Chart 13 Customer recommendations: - Strong local and international advertising Good prices & discounts products offered have good demand in the market - Variety and quality of products.

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If you could locate a company which sells the desired Indian products at Colon Free Zone, which of the phrases will best describe your feelings? Chart 14 Sample= 100

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Reasons for interest or lack thereof in Indian products Source: Quantitative research Chart 15

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What are the most important attributes in the process of choosing where to buy in the Colon Free Zone? The marketing strategy will be successful if it is oriented to the “price” issue: “Good price deals” + “service” = customer satisfaction. Sample= 100 Source: Quantitative research Chart 16 What should a new enterprise do to be better and different than the other companies at Colon Free Zone ? To achieve positioning through a good image, the new business should provide: “Good price and discounts” “Good service” “Assortment of products” “Recognized brands” Chart 17

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In your opinion, which exporter sells more and better products at Colon Free Zone? According to the perception of the consumers in study, China and Taiwan are the two exporters that have the largest volume of sales in Colon Free Zone. In the next place is Hong Kong with 8 perceptual points Finally Japan and United States with 6 percentage for each. Sample= 100 Source: Quantitative research Chart 19 Why do you think that ____ sells more and better products at Colon free Zone? Chart 18

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What do you think is missing in the Colon Free Zone or what else should be available? Sample= 100 Most of the group studied said that The Colon Free Zone needs nothing else. Those who mentioned some: - Liquors from other countries - More textiles stores - Other cloth brands Source: Quantitative research Chart 21 Usually what kind of products do you buy here at Colon Free Zone? Chart 20 The most bought products in Colon Free Zone, according to the group in study, are in order of relevance : - Clothes - Shoes and Sports shoes - Home electronic products

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How will you define a good product? Sample= 100 For the Colon Free Zone’s consumer, a good product is: The one with more durability, sturdy With good quality Manufactured with good materials Source: Quantitative research Chart 22 What will be a good deal in Colon Free Zone? Chart 23 A “good deal” for the Colon Free Zone’s consumer is: “Good price and quality products”

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Recommendations for Indian exporters

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The market study brings out the need for Indian exporters to establish their presence in the CFZ. CFZ is an extremely important commercial hub in the Latin American region. Importers throughout the continent of America and even beyond, use the CFZ for large scale imports and purchases of a variety of products. The concentration of a significant number of traders in the Zone enables importers in these countries to place orders and receive goods without having to bother about logistical problems with customs and ports authorities in other continents. The CFZ has well developed trading infrastructure and practices, that facilitate commercial interaction. Thus, for an importer in Colombia, Venezuela or the Caribbean or even in other countries of Latin America, it is often easier to place an order for various products in Colon, and receive the consignment, than to seek out exporters of these products in other continents. Exporters in Hong Kong and China have utilized the services of CFZ for maximum benefit. They have agents, salesmen, warehouses and showrooms in Colon for generating orders. Indian exporters need to look at possibilities in CFZ. Export promotion councils/trade bodies in India also need to encourage their members to make better use of CFZ. The following steps are recommended: Organize Buyer-Seller Meets, both in CFZ and India Organize manufacturer/exporter delegations from India to visit CFZ to introduce their products. Indian exporters/EPCs should consider establishing showrooms and warehouses of their products at CFZ..

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These steps will enable exchange of information and contacts between Indian exporters and importers in Colon. Even without an actual physical presence in the Zone, India is now exporting goods worth US$57 million annually. With focused attention and systematic use of facilities of CFZ, there is no reason why these exports cannot be increased to US$400-500 million annually in coming years. The largest product groups sold in CFZ are also among India's main export items viz. textiles, pharmaceuticals, footwear, linen, plastic ware, aluminum ware, electrical goods, spare parts for vehicles, etc. Charts 26-29 in Annexure-1 provide details of the product groups traded in CFZ and the destination countries of the CFZ exports. The main importers from CFZ are South American, Central American and Caribbean nations, which are the focus of Indian exporters. The CFZ offers a new export route to these nations.

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“Analysis of Strengths, Weaknesses, Challenges and Opportunities for imports from India” Source: Quantitative research Statistic study In depth interview Challenges Hong Kong, China and Taiwan are the most relevant competitors They have already positioned their products in the Colon Duty Free Zone and are competing on price. Some companies are doing trading in Indian goods without developing the right image and communication. Opportunities To develop a communication strategy: Offer assortment of products in most demand. Quality products Compete with prices Offer an excellent service and information related to the products. (Make the difference to achieve positioning). Weaknesses Lack of information regarding the products Wrong perception of Indian capabilities, on account of limited range of products sold. HONG KONG, TAIWAN and CHINA are strong and are the most relevant competitors. The competitors are already established in the Colon Free zone. (positioning). Lack of communication/ advertising Strengths Good assortment of products Already exceeding minimum sales without even an exclusive representative company. Good image of products sold Chart 24

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How to do business in Colon Free Zone Investigaciones Mercadologicas April 2007

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How to do business in Colon Free Zone According to information gathered from the current owners of businesses in Colon Free Zone, a new company that wants to enter Colon Free Zone, should be able to do a minimum annual sales of $5 million. Otherwise, it will not survive the operational and financial expenses. General rules and regulations: According to Law 18 of 1948, companies operating in the Colon Free Zone are required to comply with the following rules: No commercial license or minimum capital investment. Proof of legal status required: Articles of incorporation, banking and commercial references. Employ a minimum of five (5) local workers. Re-export a minimum of 60% of merchandise imported during the year. Agreement to pay the rent within the first five (5) days of every month. Report the commercial movement of all merchandise imported and re-exported to the Administration in the appropriate forms, when the transactions are being made. Sources: Colon Duty Free Zone Administration Colon Duty Free Zone Users Association

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- Representation agreement: Will assume the costs of B2, D, E and F, in addition to the percentage (for storage, handling, etc) agreed between parties. - Storage or Public Deposit Contract: Will assume the costs of operation A and E in addition to 0.5% F.O.B. (Freight On Board) value of Merchandise. - Operation Permit Contract: Private property: Rent agreed between both parties authorized by the General Management based on resolution No. 04-92 of March 25, 1992. ** Operation Key definitions: Users: Free Zone clients who have operation permit or rental agreement to use an office. They are the ones who have an office but may or may not rent a warehouse. Represented: Companies already established in Free Zone, that represent a specific brand or brands. Those represented brands can be dealt only inside the offices. Storage or Public Deposit Contract: The Free Zone has a public warehouse for packaging and re packaging , distribution and re-distribution of goods. The cost is 0.5% of the total value of the merchandize. It is a rental space for the company and the contracting company must provide its own personnel. It is a place that can be utilized for storage. Sources: Colon Free Zone Administration Colon Free Zone Users Association

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Identify the main channels of imports, including logistics and financing requirements The main channels of imports in the Colon Free Zone are groups of international salesmen teams. They have a basic salary of $ 500.00 per month plus 1% in sales commission. The company pays all their travel expenses. The international salesmen use catalogues and product samples. International salesmen tour: a) South America (Primary target) From a week to a week and a half in Colombia From a week to a week and a half in Venezuela b) Central America and the Caribbean (Secondary target) An average of two weeks for Central America and the Caribbean. Each one of the tours has an average cost of $ 2,000 to $ 3,000 for the company. According to the source located in Colon Free Zone (In depth interview), which deals with 500 containers, it has a logistic team of 3 units for cargo handling. Their net monthly salary is between $400 to $600 each. The warehouse has one manager and nine employees on duty (See the sample chart next page). Source: In depth interview Colon Free Zone Administration Colon Free Zone Users Association

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Source: In depth interview

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Maritime transport services (for potential Indian exporters) Size of containers Chart 25 Inland haulage (surcharge code : DHT) for Colon Free Zone & Panama City. GRR USD 450/600/675 as from December 1, 2006 Onwards Source:  Aykira de Muñoz Ejecutiva de Ventas Norton Lilly Internacional (Panama), S.A. Como Agentes de Cia. Sudamericana de Vapores Telf. (507)431-4544 Fax: (507)441-6057/441-8598 Celular: (507)6613-4631 E-mail: azachary@norton-lilly.com

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Colon Free Zone 1. Telephones: (507) 475-9500 /01/ 02 / 03 2. Facsimile: (507) 475-9622 3. Address P.O. Box 0302-00512, Colon Free Zone Colon, Republic of Panama 4. E-mail: zonalibre@zolicol.org 5. Web: www.colonfreezone.com www.zonalibredecolon.com.pa 6. Colon Free Zone Users Association P.O. Box 0302-00079, Colon Free Zone Colon, Republic of Panama Telephone: (507) 441-4244/ 4992/ 4166 Facsimile: (507) 441-4347 e-mail: usuarios@auzonalibrecolon.com Web: www.auzonalibrecolon.com

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Annexure 1 “Detailed data of imports into and re-exports from Colon Free Zone” Investigaciones Mercadologicas April 2007

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Imports of main products at Colon Free Zone, by weight and Value CIF, Year 2006 Republic of Panama General Controller Office Statistics and Census Directorate Chart 26

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Pharmaceuticals imported in Colon Free Zone Chart 27 2005 2006(P) Source: Colon Free Zone Department of Economic Studies (P) Provisional Statistics

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Republic of Panama General Controller Office Statistics and Census Directorate Re-export of main products from Colon Free Zone, by weight and Value FOB, Year 2006 Chart 28

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0.04 8 17 2,738 0.9 129 2 610 Other Central American countries 0 0 0 0 0.5 71 0.6 58 Other Caribbean countries 33 2,913 40 2,520 27 2,074 21 1,907 Puerto Rico 1 101 1 152 2 139 0.9 74 Virgin Island 4 270 4 307 3 188 3 149 San Martin (North) 8 721 9 773 9 651 7 510 San Martin (South) 0.06 11 0.03 3 0.3 63 0.1 10 Bonaire 53 4,297 45 3,790 41 3,703 31 2,856 Curazao 28 1,964 27 2,151 26 2,146 33 5,468 Aruba 1 186 1 187 1 110 1 137 Martinica 6 729 6 822 4 570 3 417 Guadalupe 91 9,129 74 9,417 67 7,582 48 5,771 Trinidad & Tobago 13 2,228 11 2,186 11 1,975 9 1,646 Windward Islands (UK) 8 611 7 712 6 491 4 389 Leeward Islands (UK) 110 13,577 92 12 87 12,721 80 12,059 Jamaica 24 1,233 25 1,299 19 932 20 674 Bahamas US$ mn. M.T. US$ mn. M.T. US$ mn. M.T. US$ mn. M.T.   VALUE WEIGHT VALUE WEIGHT VALUE WEIGHT VALUE WEIGHT DESTINATION COUNTRY 2006 (P) 2005 2004 2003  

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Annexure 2 Methodology used for the Study Investigaciones Mercadologicas April 2007

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Methodology used for the Study a) Internal part For the internal part, the Agency conducted face to face interviews with the Colon Free Zone Administration and also a Market Intel through several sources. An economic program was used to perform econometric regressions of the selected country to obtain trends by analyzing the last 10 years and be able to do precise future projections. The plan also contains Market Intel conducted inside the Colon Free Zone. b) External part Quantitative Survey The universe is a “finite population” (persons in transit doing business in Colon Free Zone). Therefore, the sample size was estimated between 100 persons doing business in the Colon Free Zone. This sample provides a margin of error of ± 6% and confidence level over 95.5 % (2 sigma). The given value of p/q was 90/10 (filters were applied to select only the target group: people in transit, doing business in that location) s = 4 pq n s = 4 (90) (10) 100 s = 3600 100 s = 36 s = ± 6% s = Margin of error p = Probabilities to perform the event q = Probabilities for not performing the event n = Sample size Development:

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Field work The field work was performed by professionally trained interviewers and the team was supervised by one of our executives on a daily basis. Digitalization All the data was processed by using a special survey software. All the information was verified before entering the data into the system. Chronologic phases W e e k s Phases 1 2 3 4 5 6 Field work Data processing Interpretation and analysis Final report production Results presentation