RVO´s Seminar: Fact-finding study Colombia Bridge.pdf · RVO´s Seminar: Fact-finding study...

RVO´s Seminar: Fact-finding study Colombia

By Diana Alarcón & Juliana Niño

The Hague,26 March 2015

For Today…

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Business Bridge

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Who are we?

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Our approach to this study

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Dairy Sector in Colombia

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Current state

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Value Chain & its challenges

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What do the challenges bring to the Dutch dairy sector?

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Opportunities

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Our Concept & Strategy proposal

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Areas

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EDI

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Conclusions & next steps

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Study conclusions

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Steps to implement EDI

Business Bridge

•  Business Bridge •  Who are we?

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Current state

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Value Chain

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Challenges

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Opportunities

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Areas

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EDI

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Study conclusions

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Business Bridge

Who are we?

•  Consortium of business consultants in The

Netherlands and in Colombia. Specialized in

services for bilateral commercial and cooperation

projects

•  We apply our skills and expertise across sectors.

We partner up with specific experts based on the

project´s subjects

•  Mirror structure in Colombia & in the Netherlands

•  Dutch & Colombian cultural & business

sensibility

Business Bridge

•  Business Bridge • 

Who are we?

•  Our approach to this study

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Current state

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Value Chain

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Challenges

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Opportunities

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Areas

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EDI

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Study conclusions

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Business Bridge

Our approach to this study • 

Desk Research (quantitative information)

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… and previous studies review

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Interviews (qualitative information)

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Sector, government & private organizations,

cooperation organisms, EU representatives

•  Situation analysis & idea-generation meetings.

Discussions around…

•  sector strategies, policies, prioritization of

areas that require support

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what the Netherlands has to offer to overcome

identified challenges

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Dairy sector workshops

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With key sector stakeholders

•  Interviews & visits to Dutch-dairy related

organizations in the Netherlands

•  To asses strengths that could potentially offer a

solution to Colombian challenges


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Business Bridge

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Who are we?

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•  Dairy Sector in Colombia •  Current state

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Value Chain

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Challenges

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Opportunities

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Areas

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EDI

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Study conclusions

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Current State • 

COLOMBIA

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28 times the size of the Netherlands

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Eight times more milk producing than the

Netherlands (1.550.000)

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Yearly production of almost 6800 million liters ->

half of the Dutch production (12 billion liters)

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Fourth largest milk producing country in Latin

America after Brazil, Mexico and Argentina

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Colombia´s dairy sector

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10% agricultural GDP

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24% livestock GDP

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3,5% industrial GDP

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Share in national GDP close to 2.3%

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Generates around 618,000 jobs in milk production

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More than 15,000 in dairy processing industry



Milk Productivity

•  Fresh milk in Colombia is produced in 22 out of the 32 Colombian provinces

•  Factors that determine production: altitude-adapted breeds and seasonality



Milk Production Systems

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specialized & dual purpose

Dual Purpose System Specialized System

Livestock number

(20.4 million in total)

7.900.000

2.400.000 Amount of farms

(497.747 milk

producing farms in

174.211

29.865 total)

35%

6%

Cow productivity

4+lts+per+day

15+lts+per+day

Production (lts per

year)

Milk quality

3.639+million 2.977+million

Although+these+are+less+ More+productive+animals

productive+animals,+they+ In+these+areas,+the+dairy+

produce+55%+of+the+total+ production+is+the+basis+of+the+

produced+milk+in+the+country livestock+business

Solids+composition+not+as+

good+as+in+dual+purpose+

Better+composition,+but+in+ systems,+but+hygiene+is+much+

average+hygiene+is+deficient better

Average milk prices

$+844

$+914+ per liter - Feb 2014

€+0,28

€+0,31 (formal market)

Usually+5%+to+10%+higher+than+ the+price+for+dual+purpose+ system Jobs created per 100

animals

5+to+6

7+to+8


Current State •  Milk Production Regions

•  8 producing regions prioritized by CNL - Colombian Dairy Value Chain organization



Milk Productivity

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ranging from around 15 liters/day/cow to around 4 liters/day/cow



Regions prioritized during the study: Selection based on:

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Production and efficiency levels

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Potential for increasing production

•  Level of organization of the producers and involvement in the national dairy

development initiatives


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Business Bridge

• 

Who are we?

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•  Dairy Sector in Colombia • 

Current state

•  Value Chain • 

Challenges

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Opportunities

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Areas

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EDI

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Study conclusions

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Value Chain


Value Chain - Inputs


Value Chain - Inputs • 

Inputs for milk production

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Milk livestock has a large dependence on

concentrate feed -> largest proportion of costs

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Farms located in remote areas have the highest

proportional concentrate feed costs

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Colombian concentrate feed market is stable

and mature -> traditional, relatively dominant

producers

•  Pasture feed market is still quite rudimentary


Value Chain - Milk Production


Value Chain - Milk Production National milk production

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Steady growth in the last 3 years

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This growth is due to international technological developments like:

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Genetic improvement

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Livestock feeding

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Nutrition programs


Value Chain - Milk Production


Value Chain - Collection & Transportat



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Collection Centers:

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Collecting, cooling, selling milk to formal processing industry:

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Cooperative collection centers

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Processing companies collection centers

•  Collecting or picking up at farms, selling milk to informal processors (rural artisanal

producers), small grocery stores and consumers in remote areas



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Transportation systems:

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Cooled tank trucks -> large processing companies

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Trucks carrying milk pails -> picked up on the road

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Farmer´s own means -> motorcycles or horses


Value Chain - Processing


Value Chain - Processing

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Pasteurization, pulverization and dairy production factories

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Based on the volume of milk they process, these companies are classified as:

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Familiar Companies: Regional artisanal processors (mostly cheese) in rural, low

developed milk producing areas

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Small & Medium companies

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Big Industry: Most traditional and dominating the national market


Value Chain - Processing •  Processing companies segmentation


Value Chain - Processing •  Artisanal regional cheese variety


Value Chain - Processing • 

SME´s


Value Chain - Commercialization & Con


Value Chain - Commercialization & Consu •  Local consumption

•  Colombia is the ninth milk consumer market in the world: around 140 liters per person

per year

•  Milk demand is concentrated in the upper socioeconomic levels

200

NATIONAL AVG.

LOW

150

MEDIUM

100

HIGH

50

0


Value Chain - Commercialization & Consu •  Dairy products consumed per income level in Colombia


Value Chain - Commercialization & Con • 

Foreign Trade: FOB value (million USD)

120 Exports

100

80

60

40

20

0 2008 2009

2010 2011 2012

Imports

2013


Value Chain - Commercialization & Con Foreign Trade

•  Main exported products


Value Chain - Commercialization & Consu Foreign Trade

•  Main export destinations:


Value Chain - Stakeholders


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Business Bridge

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Who are we?

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Current state

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Value Chain

•  Challenges

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Opportunities

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Areas

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EDI

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Study conclusions

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Challenges in Colombia


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Business Bridge

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Who are we?

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Current state

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Value Chain

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Challenges

•  What do the challenges bring to the Dutch dairy sector?

•  Opportunities

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Areas

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EDI

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Study conclusions

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Challenges in CO and Opportunities for


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Business Bridge

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Who are we?

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Current state

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Value Chain

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Challenges

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Opportunities

•  Our proposed concept •  Areas

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EDI

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Study conclusions

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Our proposed concept - Areas

•  All opportunities structured in an unifying concept

Colombo-Dutch Ecosystem for Dairy Innovation (EDI)

1. Research & Innovation

Lead%#%1.1

New%Product%Development%

Lead%#%1.2

Reconversion%

Lead%#%1.3

Inclusive%Innovations%

2. Institutional

Development

Lead%#%2.1

Public%Policy%Support

Lead%#%2.2%

Training%for%trainers

Lead%#%2.3%

Financial%Consultancy

Tecnhical

Lead%#%3.1

Profesioanlization%of%the%

dairy%sector

Lead%#%3.2

Good%Production%Practices

3. Knowledge Transfer

Associativity & Renewable energy &

Entrepreneurship water management

Lead%#%3.3% Lead%#%3.6%

Milk%Production% Water%Management%&%

Profitable%Business Irrigation%systems

Lead%#%3.4 Lead%#%3.7

Local%dairy%clusters% Soil%&%Water%

development Preservation

Lead%#%3.5 Lead%#%3.8

Dairy%Community%Centers Renewable%Energy


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Business Bridge

• 

Who are we?

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• 


• 

Current state

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Value Chain

• 

Challenges

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Opportunities

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Our proposed concept

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Areas

•  EDI

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Study conclusions

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Our proposed concept - EDI

•  Ecosystem for Dairy Innovation (EDI)


Our proposal to approach EDI: 4 compon

•  1st component:

A bilateral Dairy Innovation Plataform (DIP)



•  2nd component:

A Business and Institutional Dairy Development center (BIDD)



•  The 3rd component:

Dairy Community Learning Centers (DCLC)



•  The 4 th component:

Dairy Model Farms


Our proposal to approach EDI: 4 compon A bilateral dairy innovation platform (DIP)…

Coordination

Develop methodologies

Lead # 2.2 Training for trainers Training programs for trainners

Lead # 2.3 Financial Consultancy

Business-center

Binational Innovation Dairy Network development Advise & coaching

Lead # 2.1 for institutional

development Public Policy Support

Business & Institutional

Tracking, tracing & control of collected milk

Lead # 3.5 Financial services

Dairy Community Cooling Chain Centers Supplies for breeding

Milk Coolers and feeding Lead # 3.6

Water Management & Irrigation Systems Lead # 3.2 Soil & Water Preservation Lead # 3.2 Renewable Energy

Local Dairy

Development Center

Lead # 3.1 Profesionalization of the dairy sector Lead # 3.3 Milk Production Profitable Business

Improve their farm management skills - Training with experts Learn how to improve productivity

Animal health

control / veterinary

Lead # 1.1 Lead # 1.3 New Product Development Inclusive Innovations

Improved Transport

Dairy Community CENTER

Lead # 3.4 Local Dairy Clusters Development

Lead # 1.1 New Product Development

Adapt, test & evaluate research

Lead # 3.6 Water Management &

A Business & Institutional dairy development

center (BIDD)

…

Lead # 1.2 Reconversion Inclusive Innovation

development Lead # 1.3 Inclusive Innovations

Workshops / learning by doing

Demonstration of best practices: Community &

Learning Centers (DCLC) …..

Irrigation Systems Lead # 3.2 Soil & Water Preservation Lead # 3.2 Renewable Energy

- animal health - production Dairy - income generation

Model Farm

Lead # 3.2 Good Production Practices

… and Dairy Model farms


The whole proposed concept: EDI


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Business Bridge

• 

Who are we?

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Current state

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Value Chain

• 

Challenges

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• 

Opportunities

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• 

Areas

• 

EDI

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•  Study conclusions • 



Study conclusions

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Conclusions

•  Market is growing and can grow more

-> potential for producing more in Colombia selling in new local, regional markets.

New doors open up with FTAs

-> potential for innovative products

•  Challenges in Colombia match strengths in the Netherlands

-> potential for offering knowledge transfer, expertise, consultancy on:

- knowledge transfer

- associativity and entrepreneurship

- dairy policy development

•  Lead potential maximized when realized in articulation and in alignment with

initiatives already in place, for synergies and further momentum

-> Our proposal could be the place for knowledge transfer and institutional

capacity development


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Business Bridge

• 

Who are we?

• 


• 


• 

Current state

• 

Value Chain

• 

Challenges

• 


• 

Opportunities

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• 

Areas

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EDI

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Study conclusions

•  Steps to implement ED



What WE will do

1.  Structure a basic proposal for EDI

2.  Encourage bridges between possible partners

3.  Define their role, possible contribution and potential gain

4.  Invite required partners to participate

5.  Define and sign collaboration agreements

6.  Present the project to various institutions in the Netherlands (RVO) and

in Colombia (Ministries and local governments)

7. Implement



What YOU can do

1.  Let us know if you would like to know more about participating in EDI, how

you could contribute and what’s in it for you

2. Participate in the coming mission to Colombia that RVO is organizing:

get to know them and let them know you 3. Stay in touch with us: stay in the loop and crystalize opportunities


Thank you!!!

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Contact details Business Bridge in the Netherlands

Diana Alarcón

Juliana Niño

[email protected]

[email protected]

+31 6 1 439 18 68

+31 6 2 46 76 179

www.businessbridge.com.co

• 

Q&A session follows

RVO´s Seminar: Fact-finding study Colombia Bridge.pdf · RVO´s Seminar: Fact-finding study...

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