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Sharing Value in Central America

Coyol Free Zone

4. Quality Education 8. Decent Work and Economic Growth 9. Industry, Innovation and Infrastructure 10. Reduced Inequalities 17. Partnerships for the Goals

Overview

Coyol Free Zone (CFZ) in Costa Rica has embedded sustainability in its core business since its inception. Located in a region facing social development issues such as inequality, unemployment, and lack of quality education, CFZ stands out for its innovative proposition, managing to attract leading global Life Sciences and smart manufacturing companies. Its strong commitment to sustainable development has resulted in a successful, awarded business that provides employment and educational opportunities to 18,400 people in the industrial park and supports the development of communities and the overall economic prosperity of the country.

Author

Mariana Monge

Mariana Monge

School

York University- Schulich School of Business

York University- Schulich School of Business

Professor

Charles Cho

Charles Cho

Innovation

CFZ is an area where free zone benefits apply, such as incentives for medical devices companies that can provide up to 8 years of full exemption on income tax. Since its beginning, CFZ does business in a sustainable way, impacting their colleagues and external communities with the generation of opportunities: quality work and education.

Investment in poverty and development studies has allowed CFZ to identify where the most vulnerable populations and the opportunity gaps were located. With a clear vision of needed opportunities, CFZ has developed an entire ecosystem of innovative initiatives that revolve around three areas of impact: their people, companies in the park, and community projection.

‘Integrate a Coyol’ is a human talent selection and training program located in the park's areas of influence, to offer skilled and committed talent to companies - a key differentiator for CFZ. It provides inductions required for the park's industries, including training on key regulations and basic processes that unlock better employment, and the economic and social benefits it brings. Many other local training programs are offered, by strategic alliances formed with over 10 leading educational institutions of the country.

The company has also developed educational programs, such as ‘BachiCoyol’ which, in alliance with the Ministry of Education of Costa Rica, allows employees to complete their High-School education. In addition, CFZ has participated in a Dual Education Program with the government and national academic institutions. "This project promotes a format where students from technical schools can be trained in an educational-labor modality with professional internships at companies in CFZ", said Carolina Zamora, Post-Sales Services Manager.

CFZ also provides recruitment support for its companies, with training programs, job fairs, and an online Recruitment and Employment Data Base. Currently, there are over 150,000 registered candidates, who are also offered a free manufacturing training course –a highly sought-after training for life sciences companies. Certified operators are rewarded by having their profiles directed to a special database. These talent attraction services, free of charge to companies, have reduced turnover and increased workers stability.


Sharing Value in Central America

Inspiration

Costa Rica is a country famous for its natural wealth, with beautiful beaches, rainforests, and biodiversity, as well as a stable democracy and the abolishment of the army in 1949. Before becoming CFZ, the area was a family-owned property full of sugar cane and trees – many of which were preserved during the park's construction and expansion – and since this first development the family learned the value of living with and protecting its surroundings. “Because of its upbringing and core values, a Costa Rican is a different businessman. Respect and love for nature and our communities are embedded in our DNA. The social sensitivity with which we were shaped from birth led us to establish a clear purpose when doing business: let's do it by building - not destroying", said Alvaro Carballo.

When a group of businessmen saw the great potential of an industrial park development that would offer the possibility of attracting investments and companies to the country, with the capacity to grow in the future, they did it with a vision of sustainability. As the President of the park describes it, from the beginning of the development of the business idea, they devised an organization that would seek a shared value between "maximizing its positive impact on the region, and the economic and competitive benefits for the company".


Overall impact

CFZ, with its people-centered focus, works every day with the commitment to provide services and training that enrich the work of the companies located in the park and adjacent communities. Around the SDGs, CFZ has been highlighted for its impact on two targets primarily: SDG #4 - supporting quality education in the country and fostering the introduction and learning of STEM at school, university level, and among its collaborators; and SDG #8, with the generation of decent work and economic growth. “Everything works together to create a fairer, more conscious company, with a desire to maintain nature and support our country’s economy”, said Alvaro Carballo, President of Coyol Free Zone.

Countrywide, unemployment rates are higher for women than for men – an inequality that is also reflected in gender disparities in benefits and salaries that women receive in the national workforce. On the other hand, the International Labor Organization revealed that Costa Rica has the highest unemployment rate among young people in Latin America. CFZ successfully addresses these social issues. Women represent 54% of CFZ’s workforce, and 72% of this workforce are people between 18 and 35 years old –highlighting CFZ’s commitment to gender equality and youth development.

They are also praised, by their established companies and communities, for retaining talent through better salaries, benefits, and advantages offered such as learning and development opportunities, medical services and laboratory, health and fitness programs and centers, flexible schedules, and an exclusive and reliable transportation system (used daily by over 12,000 workers). "When our business positively impacts wages, we impact many more lives - we generate a triggering reaction where a better standard of living will follow for their families," said Alvaro Carballo.


Business benefit

The park currently hosts 31 leading global Life Sciences and smart manufacturing companies, including seven of the world’s Top 30 Medical Device companies. Additionally, in 2020 CFZ reported that the companies in its park exported US$ 2,071 million in medical devices, a figure that exceeds 1% of Costa Rica's GDP.

CFZ has also been widely recognized many times for its innovation. To name a few, the Investment Monitor awarded it the Most Resilient Free Zone of the Year and overall winner in the ESG Sustainability category, in 2021. The European also recognized CFZ as "Latin American Free Zone of the Year", and "The Most Innovative Free Zone of the Year" in 2021. “The commitment to sustainable development is something that is instilled in our humanity. We did not go for the awards, we went for what we thought was right – right for our business, our people, and our environment,” said Alvaro Carballo.

CFZ’s successful and innovative way of doing business has also allowed them to thrive amid the Covid-19 pandemic and keep attracting investment and creating jobs. One example of this came in 2021, when Bayer announced a US$ 200 million investment in Costa Rica and started to build a new pharmaceutical plant in the Coyol Free Zone.


Social and environmental benefit

Coyol Free Zone has generated an important social and economic impact for Costa Rica, with the empowerment of people in academic and professional training and the economic contribution to the country with the formal and decent employment generated, as well as the exports of the established medical device manufacturing and export companies.

The company is constantly seeking social awareness, creating programs and work that benefit the internal and surrounding communities. Educational programs offered in CFZ's training center also include master's degrees, technical programs, free courses, and lectures open to the general public. These programs respond to the most urgent needs of the area, and helps the company generate trained human resources with strong market demand (such as STEM capabilities), thus generating higher-quality jobs in Costa Rica.

CFZ in addition carries out impact donations to restore and improve the infrastructure of the areas of influence, mainly children's educational centers and hospitals, with money raised from other efficiency initiatives within the park. For example, construction waste in the park is sent to an authorized manager for co-processing, and the money generated is used for donations to cover infrastructure or health safety needs of educational centers.

The managers of the park understand that investing in health and education in its areas of influence not only broadens and sustains the innovative proposal to the companies it attracts –quality human talent– but also generates business ambassadors in these supported communities.


Interviews

Alvaro Carballo, President of Coyol Free Zone

Luis Fernando Vargas Rojas, Social Responsibility Coordinator

Carolina Zamora, Post-Sales Manager

Photo of interviewee

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Coyol Free Zone

Coyol, Alajuela, CR

Business Website: https://coyolfz.com/

Year Founded: 2007

Number of Employees: 10000+

Coyol Free Zone, founded in 2007, is an industrial park where free zone benefits apply, such as incentives for medical devices companies that can provide up to 8 years of full exemption on income tax plus 4 additional years of partial exemptions. The park currently hosts 31 leading global Life Sciences and smart manufacturing companies, including seven of the world’s Top 30 Medical Device companies.