UPS acquires two Costa Rica companies

In an interesting move, UPS announced the acquisition of two companies based in Costa Rica – Union Pak Costa Rica, SA, a small parcel delivery company and SEISA Brokerage, a provider of customs brokerage. Both companies have been UPS subcontractors for many years.

According to the UPS press release, Union Pak Costa Rica serves various industries while focusing its activities on areas of high technology and the manufacture of medical devices. With SEISA Brokerage, packages can be cleared and enter the free trade zone of Costa Rica on the same day, which facilitates cross-border trade.

 "UPS has enjoyed a successful relationship with these two companies," said Romaine Seguin, president, UPS Americas region. "With the ownership of these operations in Costa Rica, UPS can provide customers the full suite of logistics services and global trade expertise. UPS continually invests in its global network and these additions illustrate the company's increasing commitment to serving the needs of customers in Costa Rica, and throughout Latin America."

It appears that UPS has been expanding its footprint in Central America of late. In 2012, the company broadened its technology offerings to customers including UPS Internet Shipping, UPS CampusShip, UPS Quantum View Manage and UPS Developer Kit Applications Programming Interfaces (API) to such countries as Argentina, Bahamas, Bermuda, Bolivia, Cayman Islands, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Paraguay, Peru, Uruguay, US Virgin Islands and Venezuela.

Also in 2012, UPS expanded its Express Freight service into neighboring countries of Nicaragua and Honduras.

Why Costa Rica? If one looks at a map, Costa Rica borders Panama. As Panama prepares for the opening of a widen canal, Costa Rica will surely benefit particularly with its free trade zones and investments the country has made in infrastructure. The acquisition of SEISA Brokerage will bode well for such opportunities between the two countries.

Also, the medical device industry is an increasingly important industry for the country. In 2011, exports of medical devices accounted for 3.0% of the country’s GDP and represented 11.8% of the total exports of goods. Global medical device manufacturers such as Baxter, Hospira and Boston Scientific have all established facilities in Costa Rica.

Among Union Pak’s industry specialization is that of medical devices which also just happens to be an industry of much interest to UPS particularly as it continues to invest in healthcare warehousing and contract logistics around the world.

While UPS continues to expand its footprint in Central America, perhaps it is laying the ground work for further penetration in South America?