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Honduras Gets Nearshoring Boost with Satuyé Port
February 13, 2023
One of the most important lessons born from the global disruptions of the Covid era was the need for more resilient and proximate supply chains. Nearshoring became necessary to ensure access to essential goods and remove China as a potentially critical point of failure. One key component of the nearshoring movement is the potential for developing new ports in the western hemisphere. These ports serve as gateways for the movement of goods, connecting manufacturers and suppliers with buyers and consumers. They also provide essential infrastructure for the growth of local economies, creating jobs and driving economic development.
Spearheading the nearshoring movement
Prospera's announcement of the Port of Satuye Nearshoring Hub in Honduras is a game changer for the nearshoring movement in the western hemisphere. This ambitious project aims to enhance the country's port infrastructure and boost Honduras role as a significant contributor to the global economy. The new port, located in La Ceiba on the Caribbean coast, will feature state-of-the-art technology and automation, making it one of the region's most efficient and competitive ports. The project will not only support the nearshoring movement by providing a reliable and cost-effective gateway for the movement of goods, but it will also drive economic growth and create jobs for local and regional communities. With its strategic location and modern facilities, the Satuye port project is set to become a key hub for trade and commerce in the western hemisphere.
Satuye's strategic location makes it a natural fit as a nearshoring hub. It is ideally connected along the main industrial corridor of Honduras by road and presents the possibility to enhance Honduras' maritime connectivity to the United States, Mexico, and Central and South America. The port's geography will contribute to the reduction of logistic costs, creating operational and revenue advantages for companies located in the hub.
Unique governance system
Prospera offers a variety of regulatory frameworks for industries requiring significant oversight. One of those options is for a business to propose its own unique framework to the governing council. If adopted, this new framework is subsequently available to other firms operating in that same industry. This is particularly advantageous for heavily regulated industries like healthcare and related biosciences. These common-sense regulations, along with growth-friendly tax policies inside the zone, will attract innovative companies to Honduras. They will bring diverse new industries while enhancing and enabling exponential growth for local and regional commercial sector players.
Companies are already expressing interest in relocating their China-based supply chains to the Americas. The CEO of one international supplier of point-of-care medical diagnostics claims, "We are impressed with the Prospera platform, the talent from local universities, and the quality of the workforce overall. Once we are satisfied with the economics of the overall project, we intend to move forward with the development of a manufacturing facility in 2023."
The Port of Satuye opens opportunities for companies seeking to grow or redirect their supply chain capabilities into the Americas. These companies will draw from Honduras' significant talent pool, creating stable, well-paying jobs for the country's most industrious and capable workers. The 396 acres (160 hectares) city-scale development will be home to more than 100,000 workers and 50,000 residents. Jacobs Engineering led the master plan design, and the operators of the $600-million smart, sustainable infrastructure will ensure consistent, safe, and secure power, water, and transportation services for the entire development. The Jacobs Engineering Port of SatuyÃ© Master Plan states, "The Port of Satuye will attract the world's best and most innovative companies to Honduras. The nearshoring hub will bring diverse new industries while enhancing and enabling exponential growth for local and regional commercial sector players." Jacobs intends to lead the design and engineering teams to Satuye's successful completion.
Creating thousands of jobs in Honduras
The development of Satuye will bring jobs to the community, and by creating those opportunities at home, Hondurans don't have to migrate to provide for their family and realize a secure future. Quality of life amenities like affordable healthcare, education, hospitality, retail, and open & green spaces will enhance the health and happiness of all residents of La Ceiba and surrounding communities.
The U.S. and Honduran development team is led by proven city-scale development professionals, supported by the best strategy, design, engineering, and financing partners. Prospera's projects in SatuyÃ© and the city of St. John's Bay on the island of Roatan represent complementary components made possible by special economic zones. This is analogous to Hong Kong, Singapore, and Songdo, in Korea. Ironically, these modern SEZs are necessary for the western hemisphere to counteract regional Chinese tactics.
In recent years China has used the siren song of its Belt & Road Initiative and the promise of major infrastructure financing to lure Latin American nations into agreements that held substantial downside risk for the host nation. These BRI projects tend to under-employ locals and often generate unmanageable levels of debt, which leave the host nation vulnerable to further influence from China. A recent report from CSIS points out, "Should the Chinese model dominate the Americas, it is likely that a far more hostile environment will await international private enterprise in the region." Latin American countries that move toward implementing Chinese BRI projects are not blind to the downsides but often cite the lack of a reasonable counteroffer from the United States as a rationale for a turn toward China. For this reason, private non-partisan SEZs represent a twofold opportunity for Latin American nations. They can participate in the nearshoring movement and utilize an alternative to Chinese BRI without all the burdensome financial risks.
A much-needed stimulant for the global economy
As the nearshoring movement takes hold, countries that proactively engage in the process will see an increase in foreign investment as companies look to take advantage of the region's growing economic potential. For Satuye, it is estimated that the total investment for the development over the next decade will exceed $5 billion. Prospera is doubling down on their investment in Honduras, believing the combination of their city and Roatan and this port in La Ceiba will usher in a new era for Honduras as a trade hub. If they're right, Honduras will be well positioned to capitalize on this nearshoring realignment, with hopes of writing a new story for their economy and country.
Source: International Business Times