In the late 1950s, Farmazona was a distributor for pharmaceuticals in Panama. “We started out in 1958,” says Giovanni Ferrari, the company’s president. “We were a very small company then; actually we were an offshoot of a distribution company that was established in Panama.

“We distributed pharmaceuticals into the Republic of Panama,” he said, “as we had the representation of large international firms. We bought the products and sold them to the drugstores, other chains, and to hospitals, which is a traditional distribution of pharmaceuticals into the market of Panama.”

Today, this company is one of the largest third-party logistics companies in the Colon Free Zone. “The concept of third party logistics was present even back in the late 50’s,” Ferrari explained. “Our suppliers, who were mostly pharmaceutical firms from Europe, realized that it was much easier to have the goods arrive into Panama than into the neighbouring countries. They found that to ship goods from northern Europe, say from Germany into Panama, required less effort than shipping them to Costa Rica, Nicaragua, El Salvador and the rest of the Central American countries, as well as in the Caribbean.”

Ferrari indicated that at the request of the supplying companies, Farmazona began to provide the new service of receiving the goods in the Colon Free Zone and re-shipping them into the other markets outside of Panama. “This began as a side business but soon developed into the main line of business for our company.”

Farmzona began its mission as a 3PL (Third party logistics) company. (A third party logistics company is a firm that provides outsourced logistics, generally warehousing and customized shipping, for other companies). Farmazona served mostly Central America, but “with the passage of time we started shipping into the Caribbean and also into South America. Nowadays, it is very common for our clients to ship goods through us to Central America, the Caribbean and the northern part of South America – Venezuela, Colombia, Ecuador, Peru, Bolivia and even Chile, a country that is so very far away from us.” As Ferrari indicated, due to the excellent transportation network connections some clients require re-shipments from the CFZ into Chile as well.

“We specialize in handling inventories for international firms that wish to have their goods close to their intended markets of consumption,” Ferrari explained. “These companies, which have their central offices elsewhere, of course, whether it is North America or Europe or South America, establish a relationship with us.

Ferrari explained that goods entering his warehouses are still the property of the manufacturers, but they are physically in the Colon Free Zone and ready to go. They are therefore poised to get to their destinations. “Once those goods are actually ordered by their buyers,” he said, “these goods are shipped from the Colon Free Zone (so they) arrive into the markets quickly, much faster than if they would have to ship them from Europe or Asia or North America. So it really is a convenience…having these goods stored here.”

Farmazona’s half-century of growth reflects the growth of the Colon Free Zone.

Ferrari explained that Panama’s unique situation and infrastructure have contributed to the success of the zone, “The Panama Canal – the facility to bring goods and deliver goods from here; the US dollar – the currency which gives Panama the stability in terms of prices and low inflation rates; and a legal system – which was created as pro-business oriented.”

These advantages have been utilized by companies like Farmazona to develop a growing number of global clients. “We have kept our growth steady throughout the years, even though there have been occasions in which there have been threats; world recessions, problems even with Panama,” he said. “But all in all, throughout these years – 50 for Farmazone, 60 for the Free Zone – with very small exceptions, we have had a constant growth.”

Farmazona has had to adapt to market situations over the years to maintain their success. “We have had to make investments to improve the facilities,” he said, “to become ever more attractive for foreign companies to establish themselves here. That job is not finished, it (will) probably never be. There are things that need to be done…we need to keep on growing in terms of our facilities and we will do so in the next year or so.”