One of the latest multinational companies showing interest in investing in Panama is Nestle. The Swiss company known around the world for a multitude of consumer products has chosen Panama as its premier location for a regional purchase center. This would essentially connect large-scale distribution in Central America, in a way that’s both cost-efficient for the company, and beneficial for Panama. Nestle currently has a large presence in Latin America, and considers Panama an ideal spot to expand their market, and make it easier for distributers to get their product at a competitive price. Although the details of the finances and location are not concrete, the company has announced that Panama will be their destination for such a project.
Why is Nestle investing in Panama?
Panama continues to have a favorable investing climate, and because of it, attracts a lot of big companies to the region. But investing in Panama, when talking about these types of multinationals, is not just about doing business in Panama, but also using Panama as a hub for greater regional growth. Having a regional hub in a country like Panama means stable corporate taxes, a stable currency, and a great logistical location for distribution. Panama’s market itself is nothing to scoff at either. With more purchasing power than practically any other regional market, Nestle can build on Panama’s propensity for consumer products. That’s a win/win for both Nestle, and the local economy.
What Nestle is planning for Panama
While the announcement is still fresh, and certain details have yet to emerge, Nestle has made a public commitment to Panama as their destination for a new regional purchase center. According to a spokesperson, Nestle in Panama will “have a range of services, including purchasing management of specific raw materials, packaging, indirect materials (which are not directly related with the manufacture of products) and other services.” The idea would be to reduce both their cost, and the cost of their partners and distributors in Central America by getting closer to the markets.
What it means to the local economy
A large-scale distribution and purchase center could be a huge boost to the local job market, where services continue to dominate. Panama’s workforce is both equipped and large enough to provide jobs for a number of these types of corporate investments should the Nestle project lead to other companies following suit. It will also help increase other companies’ interests in Panama, by making the center a premier purchase destination for Nestle distributors. It will be interesting to follow this investment in Panama, and see exactly how big, and how far Nestle is willing to go.
Panama is still the most stable economy in the region, and with the expansion of the Panama Canal, will continue to be a global shipping and logistics leader. These are all huge factors in building the services economy, and Nestlé’s investment announcement is a positive sign for future potential and things to come soon.
