Do the Math, La Ceiba has the Whole Package

With the emergence of San Pedro Sula over the last several years, Honduras has rapidly become one of the hotter Latin America BPO investment centers. While San Pedro Sula has become the fastest growing BPO market in Central America, Tegucigalpa has become very active in attracting BPO investment.  StarTek’s recently announced decision to expand its nearshore operations deeper into Honduras with the opening of a site in Tegucigalpa proves that Tegucigalpa is indeed well positioned for further expansion in near-shore outsourcing.

One the biggest issues within Central American markets such is the lack of secondary markets. Countries such as Nicaragua (Managua), El Salvador (San Salvador) and Guatemala (Guatemala City) have only one viable market for attracting labor with quality English language skills.  With two major hubs from which services can be delivered, Honduras will enjoy a major advantage over other countries, where there is typically just one viable market.

While it should also be noted that the contact centers, mainly 3^rd party outsourcers, are willing to take the rather calculated risk of opening call centers in places where few have ventured before, many smaller “niche” providers prefer a market where they can “stand alone” and be the “big fish in a small pond” so to speak. Honduras potentially has a tertiary market that can tick all the right buttons: Small, but sustainable; Safe, but accessible and more importantly; bilingual. This market would be La Ceiba.

Why La Ceiba do you ask?

• The metro area has an estimated population of over 200,000.
• The city is home to Dole’s headquarters in Honduras and has been one of the most vital multinational companies in Honduras for over a hundred years. The growth of Dole within the city has maintained the areas bilingual capabilities.

La Ceiba has mainly been a commercial hub, but recently has seen itself becoming more of a tourist destination. Also known as the “Bride of Honduras” (La Novia De Honduras), La Ceiba is a very attractive city with natural attractions such as:  Rafting, Canoeing and an exquisite mountain called Pico Bontito in the southern tip of the city. The city is only 15 minutes away from the Bay Island on a plane and an hour via a ferry.

• Golosón International Airport is located on the western side of the city and is for local flights only, although it also receives international charter flights. The local flights are from and to San Pedro Sula, Tegucigalpa and the Bay Islands.
• Wal-Mart will start construction by 3^rd Quarter of 2014 on a new Wal-Mart Superstore.  This will be only the second Wal-Mart Superstore in the country.
• While Honduras has some of the most competitive cost in the region with the average customer support representative earning approximately $600 – $800 USD per month (including the country mandated benefits), La Ceiba will be approximately 15-20% lower with agents starting at approximately $400 USD per month.

These facts illustrate a very attractive and competitive scenario. But alone, they are not enough to build an important call center industry. Why?

Safety concerns across Honduras have been a major issue that continually needs addressing. The local mayor of La Ceiba has been actively combating this issue by recently signing agreement with the International Association of cities and U.S. counties (ICMA) administrations, for the launch of a pilot program of twinning in order to support the coexistence with the Vice-Mayor of the city of Los Angeles, California.

Solutions to Saftey Concerns

Through this agreement, the Honduran Fund for Social investment (FHIS), ICMA and the municipality join efforts to work on a project in two neighborhoods of La Ceiba, Armenia Bonito and the Bonitillo sector, to improve safety conditions, mitigate environmental problems and promote coexistence. The components of the violence prevention initiative, include the construction of sports fields, playgrounds, improving public lighting, as well as support the outreach centers where young people learn how to avoid drugs and learn a trade.

Also, the entire country has been designated as a Free Zone. Most foreign companies are located in these areas and in Export Processing Zones. Most of these companies are into apparel and sporting goods manufacturing, electronics and automotive assembly, textiles, agribusiness and business service exports (Call Centers, BPOs, etc). Companies located within these areas enjoy the following benefits:

• Unrestricted Currency conversion.
• Duty-free import of all machinery, raw materials, supplies and anything required for the plants’ operations.
• Clearing of incoming and outgoing shipments in less than a day with minimum documentation.
• 100% foreign ownership permitted.
• Exemption from sales, corporate and income taxes.
• Unrestricted repatriation of profits and capital at anytime.

While there are now many reasons to consider La Ceiba, Honduras as a potentially tertiary offshore call center market: stable economy; young and “semi” qualified labor force supply; neutral English agents and strategic location in the region; Honduras is still hindered by high crime rates and low levels of education. These issues are being addressed, not only in major markets such as San Pedro Sula, but potential emerging markets such as La Ceiba.