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SPECIAL ADVERTISING SECTION

PIMM

A new trading concept

being able to reach 566 million Latin American
consumers from one permanent port of call, a place
Imagine

that has all the advantages of a free trade zone, with

access to a host of trade-related support services,
multilingual staff, and a superb location at the hub of
the Americas.
Currently under construction near the Colon Free
Zone, the Panama International Merchandise Mart
(PIMM) S.A. will be the first of its kind in Latin
America, and the largest in the world, offering around
6,800 permanent showrooms, as well as hotels, offices and
condominiums over 1,300 acres of land.

The brainchild of enterpreneur Raynald H. Katz, PIMM represents a

new concept in wholesale trading, offering buyers and sellers
showroom units in the he best environments possible for trading on a
global scale. The idea has already been so successful, the first phase
of showrooms is 100% sold. Here, Katz talks about his vision.
You are PIMM´s founder, creator and visionary. How did the
idea come about?
It is an interesting story. I was in the Colon Free Zone area of Panama,
looking for showrooms for my own business. However, the
management there informed me there was no space available, that
“I went ahead and created PIMM and sold the first phase
of 800 showrooms in only three months. My prediction was
right. I hit the jackpot.”
PIMM takes global trading to a new level
America on direct flights. So, in many ways, Panama is the center of
Latin America. It is near the Atlantic and the Pacific oceans. After
researching the area thoroughly, I realized it would be the ideal place
to open a mart, for both economic and social reasons.
Is PIMM limited to Panama?
No, even though PIMM stands for Panama International Merchandise
Mart, the concept is expanding and PIMM will become a brand name
in its own right. Within three years, we will open PIMM in South Africa,
PIMM in China, PIMM in India. PIMM is a way of doing business and it
will soon be a well-known brand.

What are PIMM’s comparative advantages?

there were already 2,500 people in line waiting for showrooms. I
quickly realized the potential: I realized that if there were 2,500 people
like me, then there was a market, and if I opened my own showrooms
I would immeditely have 2,500 customers interested.
So I went ahead and did it, I created PIMM and I sold the first phase
of 800 showrooms in only three months, so my predicition was right.
I hit the jackpot!
What are the advantages of Panama?
I wanted to bring the wholesale concept to Latin America because this
is one of the fastest growing parts of the world, and there is a
magnitude of potential consumers—some 566 million in fact. I chose
Panama as a base for a number of reasons: it is a democratic, stable
country, it has the dollar as its currency, and the Panamanians are very
friendly, honest people. And because of the canal, there is also a long
trading history here, of course.
Panama is a Spanish speaking country, and in Latin America 90%
of the people speak Spanish. From here, one can travel all over Latin
First of all, Panama is an offshore jurisdiction, so any business done
there that does not touch Panama land so to speak is tax-free.
Secondly, PIMM has a generic name. Wholesalers will not say they are
going to the Shanghai Mart, or the Dallas Mart, for example. They will
say “I’m going to PIMM.”
How many showrooms will be available and when will
they be complete?
Initially, I thought we would only have 800 showrooms, but we sold
these in just three months. so we had to open more. At the moment,
we have 6,000 more showrooms that will be ready within two to three
years. At this moment in time, we are selling at a rate of U.S.$1 million
a day. This morning, we sold three showrooms at U.S.$250,000
each—that’s U.S.$750,000 in one morning. People want to be in
PIMM because it offers them a new way of doing business. U.S. and
Shanghai wholesalers, for example, would probably never have
considered Panama as the center for their business, but now they see
the strategic oportunities it offers.

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PIMM
Grand plans for a ground-breaking wholesaling experience
PIMM is also beneficial for logistical reasons. Latin importers and
wholesalers going to the United States or to China do not have the
added challenge of obtaining a visa. It also means that Latin America
exporters do not have to spend two days flying, getting jet-lagged, and
spending a lot of money. For around U.S.$500, they can fly to PIMM
and be picked up at the airport. There are no language barriers either.
Many more companies have discovered that Latin America is the
new market to be present in, especially with the slow-down in the
United States, and they are discovering they can run their business
“I would like to launch the concept in India, Russia,
Belgium, Poland, Brazil, Mexico and other countries. I have
already drawn up a map!”
from PIMM. About half of our companies are Asian, 20% are North
American, 20% are European, and the rest are Latin American. This
melting pot of cultures is also a valuable advantage.
The PIMM plans include four hotels. Who will be building them,
and will they be run by yourselves?
We are building and financing the hotels, but they will be operated
by European, American, or Mexican firms. We are seeking operators
now, and the best offer received will be the one who wins the race.
Is PIMM going public? Where would this be?
We will be going public, and will probably do so in New York. Although
there is no written commitment yet, we are talking of going public in
June 2008. This will help finance future PIMM outlets. Each PIMM
costs around U.S.$750 million to 1 billion to set up, and I need to build
them fast. Timing is very important, otherwise you lose the
opportunity. I would like to launch the concept in India, Russia,
Belgium, Poland, Brazil, Mexico, and other countries around the world.
I have already drawn up a map!
What is the secret behind PIMM’s success?
The idea and the concept, without a doubt. I would also say my
tenacity. If I want something to happen, I will work night and day until
I get it When I started PIMM there were hundreds of people who said:
“Oh, I had that idea before you” but nobody did it. I was the one who
actually accomplished it. Anyone can have the idea—success comes
2 Business Outlook
SPECIAL ADVERTISING SECTION
when you pull it off. Part of the appeal of PIMM is the dream, but 95%
is getting it done, and this means getting the money, convincing the
government to back you, putting together a great team, making sure
the customers understand what you are doing, and making the project
known. And, of course, you always have to be ahead of the rest.
There is no doubt that PIMM is becoming a huge success. To a
great extent, business people investing in PIMM are putting a
high degree of confidence in you. At a personal level, this must
give you a great deal of satisfaction.
It does. I go to bed very happy each night! I have surprised myself with
how successful it is. I allowed myself two years to sell the first phase of
showrooms, yet I did it in 3 months. I didn’t do it for the money,
because I already had money. I did it because I liked the idea. I am a
perfectionist. I look at the details. Being a perfectionist allows me to
achieve what I am achieving now.
You started your first business at 19 years old. What was it
about business and closing a deal that attracted you?
I think my father, a successful businessman, influenced me a great deal.
I would see him working so hard, and I always wanted to be like him,
but I always wanted to do bigger things. At a very young age he would
give me pocket money, but I always wanted to earn it on my own. My
objective is to be good in my business, be good to my suppliers, to my
customers, and my employees—money is the reward you get for doing
things right.
Years ago, you also foresaw the power of the Internet and set
up the first Internet duty free company. Does PIMM reflect a
change in this vision, in that you feel people need to meet face
to face?
The Internet is a good business tool, but it is sometimes too
impersonal and I think we need to get back to one-to-one business
relationships. In business, you want to see the buyer, look him in the
eye, feel the reaction, and this is part of how PIMM functions.
I actually believe business worldwide would be much better if
people worked in this way. A strong personal relationship makes the
buyer and the seller happier, which in the long run will translate to
more business.”
With hundreds of large and exclusive brands already on board,
covering anything from cars to clothes, it seems PIMM has already
been given the stamp of approval from the global business community.
The PIMM way of working in a nutshell
Any U.S., Asian or European manufacturer wishing to export a
product to the Latin American market now can, even without a
physical presence in the region.
The manufacturer simply has to contact PIMM to buy a
permanent showroom and on-site living accommodation can be
arranged, while a PIMM representative assists the manufacturer
with a more permanent housing solution. Once established in the
new showroom, the manufacturer can exhibit and sell to the Latin
American importers, wholesalers and buyers coming to purchase
from the vast array of manufacturers located there.
Similarly, Latin American suppliers can set up a showroom in
PIMM to access the U.S., Asian and European markets, thus
avoiding the challenges of visa restrictions, flight costs and jetlag.
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SPECIAL ADVERTISING SECTION PIMM

The man behind PIMM

This fascinating wholesale concept has a natural born entrepreneur at the helm.
in Avignon, France in 1955, Reynald H. Katz was introduced to Around this time, the U.S.
business from an early age, when he used to help his father government approached him
Born

manufacture cosmetics at the family plant during his summer
holidays, and his hunger for clinching a deal soon started to
show. “I was always selling something to someone during my
school years,” he says. “As a teenager, I used to hire a booth
at the annual Avignon Festival and sell my own hand-made
jewelry, where I soon amassed around U.S.$100,000.”
At the age of 18, Katz worked with his father full-time as head of the
nail polish plant, but by 19, he had decided to go it alone. He flew to
London to meet an English chemist who had discovered a new anti-
chipping nail polish formula—a revolutionary invention in the
cosmetics industry—and they set up a company together.
Katz injected all his savings into the company and took care of the
selling and finances, while the chemist took care of production. He
says: “At the time, the British government was giving grants to
companies establishing plants 300 kms outside the city of London.”
Katz seized on this opportunity was able to get the manufacturing
facility free of charge and a grant for R&D.
Within two years, the entrepreneur had conquered 80% of the
worldwide nail polish market, and two years later, ICI, his main vendor,
bought the business for U.S.$8 million. Katz then traveled the world
selling this innovation, falling in love with Panama along the way. Living
life in the fast lane, he returned to Paris and bought everything his
young heart desired. Youth and too much of the high life led him to
forget to pay his taxes, however, so when the tax bill, and the inevitable
fine, finally arrived, he had to sell most of his assets to pay them.
“As a teenager, I used to hire a booth at the Avignon
Festival and sell my own hand-made jewelry. Within a few
years, I had amassed around U.S.$100,000.”
The experience brought Katz back down to earth and back into
business. He says: “I went to Italy to open another cosmetics firm, this
time making lipsticks, and developed a way to sell the cheapest lipstick
on the market. I became a pioneer in the field of cheap, attractive,
quality cosmetics within Europe.”
His export markets also included the Middle East. “On my many
trips there,” he says, “I discovered it was a virgin cosmetics market,
ready for conquering, and that it would be an easy opportunity for me
given my flair for languages.” (At the time, he was already fluent in
Italian, English and French and he later learned Arabic, Spanish, and
Chinese.) “I lived in the Middle East for six years and became Cosmetic
Head Buyer for one of the governments in the region.”
In 1986, he arrived in the U.S. as there was a boom in the perfume
industry and, all the main brands were establishing themselves.
“Everyday, there was a new perfume brand emerging,” Katz recalls,
“but I could see there was a need for cheaper attractive quality
fragrances.” He quickly created his own line of budget price perfumes,
installing a plant in Miami. Once the products were introduced, he sold
the plant in 1996 to a major U.S. company.
with a request from the Chinese
government to develop the
perfume area for a new mall
concept it was expanding.
Having just sold the Miami plant,
Katz thought it would be a good
opportunity to learn about
business in China, and was soon
appointed Senior Advisor to the
Ministry of Internal Trade,
Cosmetics Division.
Katz lived in China for six
months, developing a model for
cosmetics areas within shopping
malls. He opened three malls
himself and his template was
used in 124 more malls.
“I developed the link between Reynald H. Katz
President & CEO, PIMM
the Chinese government and
the U.S. cosmetics manufacturers, which included organizing fairs and
invitations,” he recalls.
In 1998, he went back to Miami and was amazed by the potential of
the Internet business, and the magnitude of the new market the
Internet was creating. This developed into the creation of the first
Internet duty-free e-commerce business. He was invited to the Cannes
Duty-Free Show as a speaker to present his new concept of selling
duty-free goods over the Internet, where he received a standing
ovation in front of 3,000 people.
Sadly, at the moment he was about to go public in 2001, the Internet
e-commerce business crashed, so the public offering had to be
withdrawn and the project cancelled. He says: “It was that which led
me back to Panama. I researched the country’s geopolitical
advantages and decided now was the time. “
Katz purchased a distribution liquor company at the Colon Free
Zone and began to work in Latin American markets such as Colombia,
Ecuador, and Nicaragua. Once again he discovered another niche: this
time for budget-priced liquor brands, and began to produce his own
brands in Panama. He currently holds a 16% share of the entire
Colombian market.
It was this business that led him to look for a showroom at the Colon
Free Zone, but in his search, he discovered there were no showrooms
available. When he asked what he needed to do to get one, he was told
to wait: there were some 2,500 companies on the waiting list.
“With that news,” he says, “I left the Colon Free Zone government
offices with the wonderful news that there was a market available for
2,500 showrooms. I began to investigate, and found that Panama
actually needed thousands more showrooms.
“It was therefore more than logical that PANAMA INTERNATIONAL
MERCHANDISE MART—PIMM—should no longer remain just a dream,
but become a reality.”
The rest, as they say, is history…

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PIMM SPECIAL ADVERTISING SECTION

Taking social responsibilities seriously

Job creation and economic prosperity are integral to the PIMM philosophy.
importance to the Colon Province, and indeed to Panama, in a country without involving the local people. He says: “It is important
cannot be overemphasized. There are currently 88,000 for the local community to feel included and valued, and local
people living in the area—many of whom are descendents of employees will be at the heart of PIMM’s success.
PIMM’s

Caribbean settlers who have spent their lives working in and
around the Panama Canal.
PIMM adds up in many ways. The Latin American Market
Estimates suggest the project
566 million consumers
could add a total of U.S.$87million
per year to the local economy. It Caribbean 39
will also completely open up Latin
America to the world. However, on Central America 149
a societal level, PIMM’s most impacting
legacy will be job creation.
Just over 30,000 of the population are
of working age, but 70% are out of work.
Studies undertaken by the PIMM research Total 566
team predict the merchandise mall, when Population in millions
built, could provide jobs for most of them.
Raynald Katz, CEO and founder of PIMM, says: “It is a perfect
opportunity to kickstart the local economy, and the local people have
the advantage of speaking English perfectly.”
While some firms may pay lip service to their responsibilities as a detailed below, will make all the difference to many families, bringing
local employer, Katz believes you cannot have a million dollar business added prosperity to a country where the idea of trade comes naturally.
“I am going to put all my efforts into making sure the people who
work for PIMM are happy, whether it be the
directors of the showrooms, or the people
who work in them, are happy. Giving the
people of Colon and Panama the chance
South America 378 to eat and live well will, in turn, make me
very happy too.”
The conscientious entrepreneur also
believes that one reaps what one sows. He
says: “If you treat employees well, they
respect you and work better. If they work
well, business is better.
“There are many million dollar
Source: Population
Reference Bureau2006 companies that take their employees for
granted, when I believe they should
distribute a bonus of their annual earnings to employees and treat
them like part of the family.”
The predicted impact of PIMM on an economic and social scale, as

PIMM — Making a substantial impact on Panama’s social and economic landscape

The PIMM project will be divided into Estimates suggest the PIMM project, in all its phases, will generate
Social Activity:

Economic Activity:

four phases and estimates suggest it a total of U.S.$434 million for the Panama economy, in salaries,
will employ around 31,195 people showroom sales and other buildings’ activities, tax revenues and
during this time. consumer spending.
Of this number, 30,821 (98.80%) will
be workers directly related to the • Transactions from building • Total salaries payable will be
project, through activities in the sales, hire and hotel services will around U.S.$158 million
showrooms and office buildings. be around U.S.$73.8 million (36.37%).
(16.98% of total economic input).
The breakdown is as follows:

• The services department will need an

estimated 30,645 workers, representing
98% of the workforce.

• The administration and finance

department will need an estimated 139
people, which represents 0.45%.

• The marketing, sales, operations and legal

department will need around 37 people,
which represents 0.12%.
• Consumer spending will be around • The project will generate an
• The remaining 374 people (1.20%), will U.S.$118 million (7.37%). estimated U.S.$83 million in
be directly related to the construction taxes revenues (19.29%).
of the project.
Panama International Merchandise Mart www.pimm.co

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