Caribbean & Central America - February 2024

Goods exports from Costa Rica were worth a total US$18.24bn in 2023, according to the country’s official export promotion agency (Procomer), a 15.5% increase on the previous year, with the medical devices sector continuing its strong recent growth.

This figure is the second highest increase in the last five years, Procomer said in a statement published 23 January, with growth driven by medical devices and agriculture. The country’s largest exports were medical devices (US$7.6bn), bananas (US$1.18bn), and pineapples (US$1.15bn), it said. Medical devices made up 42% of total exports and increased in value by 28% compared to 2022. As for agriculture, the sector contributed 18% of total goods exports, an 11% increase compared to the previous year. Laura López, general manager of Procomer, hailed the diversification of exports, which she said contributed 40.5% of Costa Rica’s GDP.

In recent years the country has had great success in developing its medical devices industry, which became its largest export in 2017, and there looks to be further growth to come following a raft of recent investments. In May 2023, US firm Tekni-Plex Healthcare, announced the expansion of its production facility in Cartago province. Then in August 2023, US company Intricon announced that it would open its first plant in Costa Rica, the company’s only facility in Latin America, with the start of operations earmarked for late 2024. It will be the first plant in Costa Rica where medical devices containing microelectronics, biosensors, and electromagnetic navigation (EMN) sensors are developed and manufactured. The 3,250m² facility also has capacity to expand to more than 14,000m². 

In September 2023, Johnson & Johnson MedTech, the medical device business of US multinational pharmaceutical and medical technologies firm Johnson & Johnson, announced that it would construct a 19,000m² manufacturing facility in Grecia municipality, Alajuela province. Creating 3,000 jobs over three years, this is the largest investment J&J MedTech has ever made outside the US, according to Procomer. That same month, US medical devices manufacturing firm Boston Scientific announced that it would hire 1,200 people for a new plant in Cartago province. Already the largest employer in Costa Rica’s medical devices sector, the firm is planning further expansion.

Another firm, Inari Medical of the US, one of the world’s largest medical device manufacturers, announced its own new investment in November 2023, revealing plans for a manufacturing facility in Tacares municipality, Alajuela province, employing up to 600 people, which will be the company’s first plant in Latin America. And most recently US firm Solesis, which owns Secant Group, Polyzen, Charter Medical, and SanaVita Medical, announced plans for a new manufacturing plant in the Greenpark Free Trade Zone near San José. Operations are scheduled to begin in spring 2025, the company said in a statement published 1 February. 

Industry executives have hailed Costa Rica as a gateway to the region, given its strategic location between North and South America. For one firm, Roche Pharma, which is headquartered in Switzerland, the country acts as a distribution centre for 24 Latin American markets. Executives also cite Costa Rica’s free trade zones, reinvestment incentives, and the work of CINDE, the government agency tasked with attracting foreign investment, as well as a stable political situation and strategic free trade agreements.

• Trade fair

CINDE participated in a major trade fair which took place from 6-7 February in California, US, for the life sciences industry – an event which brings together more than 1,500 companies and 14,000 executives with links to the industry. A CINDE statement announcing its participation in the trade fair, dated 1 February, notes that Costa Rica is the second largest Latin American exporter of medical devices, hosting over 14 of the world’s top 30 original equipment manufacturers.

The country has benefited from a trend towards nearshoring, as multinational firms look to shorten supply chains and move production closer to major markets in North America. Doug King, CEO of Riverpoint Medical, a US firm that employs 140 people in Costa Rica, also cited the country’s human capital. “Costa Rica offers a winning formula to support our growth as an organization by combining a desirable geography, incredible and talented people and a strong education system that caters to the medical device industry,” said King.

The medical devices sector is a bright spot for Costa Rica and looks set for continued growth. However there are growing concerns about the impact of growing insecurity, with the number of homicides skyrocketing in the last few years to a new record in 2023. While the killings are linked to drug trafficking, a security crisis could impact Costa Rica’s reputation as a safe haven and worsen the business climate.

Tool for growth

Costa Rica’s foreign trade minister, Manuel Tovar, said that international trade “is a tool for economic growth, bringing down the cost of living, stimulating investment, and as a result, generating jobs.”