Vigo Free Trade Consortium is a public institution that has been working since 1947 to encourage international trade and economic development in southern Galicia. From its logistical area, located in the port of Vigo, the consortium oversees a free trade zone with all of its related importation and exportation advantages. As an economic development agency, the consortium is the main developer of business parks in its area of influence. It also provides companies with a whole range of services including: finance, via the capital risk company Vigo Activo; support for entrepreneurs, via business initiative centres and collaboration with the University of Vigo in the form of seed funding; plus financial information required for decision making, via the Ardan business information service.
Some 350 companies currently occupy the different parks developed by the Consortium. In 2010 the Free Trade Zone parks network generated 26.57% of the total wealth of the Vigo Metropolitan Area and 25.56% of all employment in the region. The consortium is currently involved in extending the almost 5 million square metres of land offered and managed in the business parks of Balaídos, Bouzas, A Granxa, Parque Tecnolóxico e Loxístico (PTL) and Porto do Molle, via the new Salvaterra-As Neves Logistic and Industrial Platform (PLISAN) and a new Business park in Vigo.
The consortium is formed by entities such as Vigo City Council, Pontevedra Provincial Council, the Chamber of Commerce, the Harbour Authority and the Spanish State; with the Spanish Cabinet responsible for appointing the Special State Representative proposed by the Department of the Treasury.
The current State Representative, Teresa Pedrosa, presides over the monthly meetings of the executive committee, the body responsible for the management, administration and running of this public institution. The Vigo Mayor's Office is responsible for the chairmanship of the Consortium.
State representatives Names and dates of the appointment of state representatives in the Vigo Free Trade Zone Consortium:
Rafael Portanet Suárez: 22/09/1947.Decree of September 22, 1947 Fernando Alonso Amat: 26/06/1978.Royal Decree 1440/1978 of 26 June 1978 Francisco López Peña: 27/01/1989.Royal Decree 97/1989 of 27 January 1989 Pablo Egerique Martínez: 12/07/1996.Royal Decree 1750/1996 of 12 July 1996 Francisco López Peña: 7/06/2004.Real Decreto 1379/2004, de 7 de junio de 2004 María Teresa Pisano Avello: 30/05/2008.Real Decreto 932/2008, de 30 de mayo de 2008 Teresa Pedrosa Silva: 10/02/2012.Real Decreto 372/2012, de 10 de febrero de 2012
History
A major part of Vigo's development has been due to the activities of the Free Trade Zone. The Consortium developed the Balaídos Industrial Estate, where a Citroën Hispania factory was established in the Fifties, which led to the growth of an important car sector in Vigo. It was also responsible for the development of the Valadares Technological Park and the other main operations involving industrial land in the city and surrounding areas, as well as a large urban restoration project, Abrir Vigo al Mar (“Opening Vigo to the sea”). The Consortium established the Galician Sea Museum, which once finished was transferred back to the Galician Regional Government. During its fifty plus years of existence the consortium has played a role of ever-growing importance in the city's financial framework and also in infrastructures, urban planning and support for the entire business process - from entrepreneurs to firmly established industry.
Origins
In 1947, when the decree by which the Spanish Government granted Vigo the right to establish the third Free Trade Zone in Spain (after Barcelona and Cadiz) was published in the State Official Gazette, this news was welcomed with great enthusiasm by local authorities and business organisations, who rightly realised that the advantages this offered in comparison to other cities would drive the economic growth of Vigo.
As Francisco López Peña, State Representative on two separate occasions, explained to University of Vigo students, “When the Free Trade Zone was created, Spain was still in a state of complete self-sufficiency with a completely closed economy. The prohibition on importations had been a huge mistake. Indeed, instead of protecting the country's industry, it resulted in industrial processes being more expensive and effectively prevented the economy from becoming specialised and competitive. However, the Free Trade Zone, allowed companies to be established that took full advantage of the availability of cheap imports and the possibilities for exports. It was a highly significant step for the city, a comparative advantage that permitted the city’s economic expansion”.
Nevertheless, some years would have to pass before the promising expectations generated by the authorisation to establish the Free Trade Zone were fulfilled. The Consortium responsible for its operation and administration was presided over by Vigo City Council and included a State Representative and several municipal councillors and representatives from public entities. It had to present a plan to the Cabinet for the delimitation of the Free Trade Zone, so its members debated for some time about the correct direction required for the project: industrial or commercial. Rafael Portanet, the first State Representative for the Consortium, preferred the former option, given that the driving of industrial development was an urgent requirement at that time.
As Juan José Vázquez-Portomeñe indicated in his book Los consorcios administradores de zonas francas. El Consorcio de la Zona Franca de Vigo (“Free Trade Zone Administrative Consortiums: Vigo Free Trade Zone Consortium”): “The debate ended with an apparent compromise, as the project presented by the Consortium for approval by the Government included both an industrial and commercial area. However, over the long run, the industrial option took precedence, and the commercial area that had been initially planned failed to materialise.”
The initial project included the construction of a harbour in Alcabre on land recovered from the sea, which would even include oil refinery installations. But as the huge technical and financial requirements involved in the realisation of this plan became apparent the project was restricted to an area of some 650,000 square metres in Balaídos, sufficient space to meet the requests for land presented by several companies. This decision was taken due to the threat of expiry of the initial authorisation for the creation of the Free Trade Zone.
In order to acquire the land in Balaídos, around two thousand small plots had to be bought using compulsory purchase orders. However, at that time the Consortium only had a state grant of one and a half million pesetas, insufficient to cover the cost of the purchases. In the end, a loan of thirteen million pesetas from Caja de Ahorros de Vigo (the local savings bank) allowed the Free Trade Zone to start its operations.
Aluminium and ferroalloy companies and, above all, Citroën Hispania, were first to take full advantage of the tax incentives offered by the Free Trade Zone and effectively determined its industrial orientation. In 1956, the decision by the French car manufacturer to establish operations in Vigo was a crucial moment, not just because its activity would become the main source of the financial resources that have allowed the Consortium to adopt its current role as an institution for economic development, but also because it resulted in the appearance of a new industrial sector in the city that, over time, drove the creation of an important network of auxiliary companies for the car industry. The current Car Cluster not only provides parts and components for the PSA factory in Vigo, but is also a supplier for other car manufacturers and attracts multinational companies to Vigo.
EU Regulations The entry of Spain into the EU in 1986 brought about a radical alteration in the configuration of the Free Trade Zone. On the one hand, Spain had to adopt EU legislation, which does not consider Free Trade Zones to be industrial in nature, but rather points of entry for products from third countries free from taxes or duties, and on the other hand, the country's economy became entirely open, functioning with a series of different parameters.
Given these new events, which resulted in the loss of the Free Trade Zone's industrial character, the Consortium had to reconsider the function of the Free Trade Zone. At this point a decision was taken to create a commercial area in the harbour for services, logistics, storage of goods and support for international traffic. However, it was also the moment to use accumulated equity to continue driving the economic growth of Vigo and to commence other kinds of activities. The Free Trade Zone would rapidly become a local development agency.
Economic development agency
From 1989 onwards the strictly commercial activities of the Free Trade Zone started to move towards the new harbour area of Bouzas, where the Consortium had obtained authorisation from the Harbour Authority for the use of an area of 144,352 square metres in exchange for agreeing to create the infrastructures required to finish the space reclaimed from the sea. During the following decade all of the installations were occupied, and by the year 2000 the area had to be extended to the current 200,000 square metres with facilities for covered and open-air storage of goods with its own customs office. The Consortium's central offices were also transferred to Bouzas.
Some forty companies are currently present in this space, and enjoy the infrastructures, services and tax advantages offered to them for the storage and distribution of goods. As the Consortium's promotional publications affirm, Bouzas Commercial Area has become the “Atlantic gateway” for southern Europe.
Nevertheless, more than its commercial activities, the role of the Free Trade Zone Consortium as a development agency has transformed the Consortium into the true driving force behind Vigo and its greater metropolitan area. In this regard, the creation of business parks and the provision of industrial land to all classes of companies became its principal activity, as a huge demand for land in Vigo was obstructing the progress of the city. Having realised that Vigo's economic growth was less than its potential, the Consortium felt that the provision of publicly developed land with a full range of services was of supreme importance.
The first industrial estate created by the Consortium, without having the status of a Free Trade Zone, was the A Granxa estate located in the town of O Porriño. Inaugurated in 1996, the estate generated some three thousand new jobs in the Vigo area. From that time to the present day, the Consortium has acted as property developer, in conjunction with the towns where the land is located, for millions of square metres of business land, fully equipped and strategically situated in the greater metropolitan area.
The next project was the creation of Vigo Technological and Logistic Park, home to initiatives of such interest as Texvigo, a cooperative of textile micro-enterprises which share R&D and marketing processes. The park currently has some seventy companies, including the Japanese multinational company Denso and the German multinational Benteler, creating approximately three thousand five hundred jobs.
In the town of Nigrán, the “Porto do Molle” business park, with a surface area of more than one million square metres, offers more land for businesses. Porto do Molle has been designed as a working city, where an individual can work, do sports, shop, stroll and take his/her children to school.