Competitive costs in Valle del Cauca
Last update: 12/09/2022
The region has competitive costs in real estate, human capital, utilities and logistics, which make it an attractive destination to host multiple business operations. This stems from the abundance of qualified human talent, availability of locations and its robust infrastructure network.
Real estate costs
Valle del Cauca and its capital, Cali, have a wide range of real estate offerings: from offices to warehouses, industrial parks and land for crops that fit the needs of companies seeking to establish their operations here.
The region has the lowest costs for warehouse rentals, with savings of 30% on average, compared to the main industrial hubs in LATAM. The average cost per square meter m2 for warehouses for sale in industrial parks is USD$555. The average value per square meter m2 of land for sale in industrial parks is USD$106.
The supply of office spaces in the city is distributed across strategic areas with access to public transportation, centers of great influence and commercial premises, and with ample availability of human capital.
In the market for arable land, Valle del Cauca has an average price per hectare of USD $8,000, mostly located in the north and center of the department. It is one of the regions with the greatest potential for agricultural expansion in the country, having 708,950 hectares of land suitable for cultivation and currently more than 360,000 hectares available for agricultural expansion.
Salaries costs
Salaries in Cali and Valle del Cauca region are among the most competitive in Colombia. For example, in the BPO sector, the city has salaries at least 10% lower than in other cities in Colombia for key contact center positions, while in the IT & Software sector salaries for programmers are up to 16% more competitive -on average- than the other main cities in the country.
Salaries for the manufacturing sector in Colombia are the third lowest in Latin America. It is also the second most cost-efficient region for logistics operations. They are 38% lower than Mexico and 40% lower than Brazil, two of the most important markets in the region.
Utilities costs
Valle del Cauca has the third best power supply quality and reliability in Colombia, with a cumulative interruption of only 21.6 hours per year.
The cost of electricity per Kwh in the region varies from USD $0.126 to USD $0.173, depending on the voltage level required. Furthermore, in the unregulated electricity market prices (consumption over 57,500 kWh) can be negotiated and a reduction of up to 13.2% over the average cost can be achieved.
Regarding natural gas, the rate per m3 varies from USD $0.615 to USD $0.644, depending on consumption. Much like power supply, the rate can be negotiated in the unregulated market (consumption over 75,000 m3) between 23% and 70% below the average cost.
Regarding water supply, Valle del Cauca has one of the main aquifers in the country. Ground water is abundantly available and its extraction is much lower than the annual recharge, so it is in constant balance. The price is $0.34/m3. Well water is only 10 meters deep, with a flow rate between 80 and 100 liters per second (Lt/sec).
Logistic costs
Companies located in Valle del Cauca have the fourth lowest logistics costs in Colombia (7% of company sales). It excels in storage rates at port terminals in Buenaventura, 33% to 73% cheaper than its equivalent in Cartagena for stays shorter than 10 days.
