Fort Smith man has big dreams for Costa Rica.
A charter commercial jet service, casino boats, a gasification plant, a synthetic fuel refinery and the rebuilding of the Costa Rican railroad top the list of projects the design engineer said he hopes to pull off in the coming years.
So far, all that the CEO of Lovelace North America LLC of Fort Smith has is a letter of intent from Japdeva -- a super agency in the Caribbean coast province of Limon equivalent to a combined port and regional development authority -- that says it supports a laundry list of Lovelace's proposals. And, he said, the Fort Smith company has received about $25 million worth of investment commitments, all but roughly $5 million that's needed for the first phase of projects in Limon.
The Costa Rican government is putting up $15 million for the design and engineering fees, Lovelace said. Lovelace also has refineries planned near Houma, La., and in Green County, Pa.
But Lovelace, a Pine Bluff native, is most optimistic about his Costa Rican ventures. The deal maker, he said, is making a "lifetime commitment" that's mutually beneficial to Costa Rica and not simply designed to send profits back to the United States.
"We're not going to be the Ringling Brothers trying to do this all at once," Lovelace said. "We're doing it in small bites. This is the way you eat an elephant."
Lovelace said he's convinced, relationships forged by Marisol Gibson, a native Costa Rican and vice president of Lovelace N.A., opened the right doors and put his company on equal or better footing than other investors in that economy such as semiconductor and rmcrochip producer Intel Corp.
"I understand the culture and how the ministries work," Gibson said. "Costa Rica faces a number of challenges, and helping the nation address those challenges increases your chances of doing business there."
Gibson has family members who work for Columbian shipping conglomerate Groupo de Coremar (The Coremar Group), which floats substantial political weight in Costa Rica. The loosely constructed letter of intent was obtained on a recent trip to the Central American nation when Lovelace was entertained by officials including Sergio Pacheco, son of Costa Rican President Abel Pacheco. And it doesn't hurt that the Pachecos are Limon natives.
Sergio Pacheco, manager of Japdeva, and Delroy Barton, the agency's director of regional development, said in telephone interviews that Lovelace's proposals address several priorities for their country
"We intend to do oar best to see that Mr. Lovelace's projects have the best opportunity to come to fruition," Sergio Pacheco said.
Sandwiched between Nicaragua and Panama, the Republica de Costa Rica is about a third of the size of Arkansas with twice as many citizens. According to the Central Intelligence Agency's international fact Web site, the democracy's gross domestic product for 2001 was $31.9 billion (compared to Arkansas' $63.7 billion gross state product). Agriculture, manufacturing -- especially microprocessors -- and tourism are Costa Rica's biggest industries.
Costa of Doing Business
Lovelace N.A., which employs 126 people, including 84 mostly in its MDS Construction subsidiary in Fort Smith, has been a client-driven design engineering business. Lovelace got his start 14 years ago with M.J. Mattes & Associates in Chicago, a design and industrial engineering firm he later bought out.
Much of the $5 million firm's experience has been in infrastructure for industrial parks and a variety of industrial processes for factories. But opportunities with synthetic fuel refineries, coupled with the firm's Costa Rican inroads, prompted Lovelace to think bigger.
Lovelace, who holds degrees in biochemistry and physics, said his goal is to help design and develop thermodynamic refineries that could produce synthetic fuel more cheaply down south than what's been accomplished in the United States
Barton said attempts have been made to convert sugar cane alcohol into ethanol in his country, but Costa Rica still must import more than half of its petroleum. So a Lovelace refinery, even if exporting 80 percent of its products back. to the United States, could greatly benefit Costa Rica 's economy. The venture would also be timely for the United States since, according to congressional testimony this month by Federal Reserve Chairman Alan Greenspan, natural gas supplies will likely remain tight for some time.
Synthetic methane can be turned into several fuel products, including diesel and gas. Lovelace said synthetic methane can be produced by removing and reprocessing rubber-based and other fuel feed stocks from landfills, hence mitigating another Costa Rican problem.
Richard Mahon, a consultant with the Raymond Division of French firm Alston Powr, is working with Lovelace N.A. Mahon said Lovelace's engineering is sound, but the economics of a Central American venture are out of his personal area of expertise.
Although the chemical processes involved are complicated, Lovelace said, the economics are not. The exchange rate for Costa Rican colones is 386.5 per U.S. dollar. So the same capital investments in the United States would be far costlier, to say nothing of labor and other overhead. But by cutting through red tape and by initially investing in what Lovelace describes as "cash cows" in Costa Rica, the firm's cash flow risks could be greatly reduced.
Lovelace, 45, said his firm will open offices this month in Limon and San Jose, Costa Rica's capital. It's in negotiations to buy SOS acres of property for more than $1 million, including 200 acres that could close this month.
The rest of the firm's aspirations start with investments that would help tourism-deficient Limon and keep Lovelace in cash. The plans include:
A $27 million-$33 million acquisition of gaming and transportation assets and the construction of. a gasification plant that could create between 400 and 600 jobs in the next 150 days.
This would include the purchase of four FlightStar L10lls (DC-10 sized commercial jets that seat 300 people each) and two commercial boats that will operate as casinos.
One boat, a mid-sized cruise ship with a 1,500-passenger capacity, is designed as a five-star hotel. The other was previously a Japanese passenger and car ferry that can hold 2,000 people. The latter will be reconfigured and used as a casino and "sun boat."
Also during the first round of investments will be Lovelace's gasification plant. The proposed facility would be 85,000-SE
* The second round of investments, Lovelace said, will include a $250 million, 13-acre refinery that will produce diesel, automotive and jet fuel. Lovelace said the thermodynamically designed refinery will create 2,200 jobs. It would cost more than $1 billion to establish a similar business in the United States.
* In about nine months, Lovelace said he hopes to be in a position to begin work on modernizing Costa Rica's 167-year-old, 570-mile railroad system, motivated by his own businesses' demand for moving raw materials.
"I know it sounds like we've got our plate full," Lovelace said. "I have learned that most things you attempt in life are not going to be a shot that lines straight up to the pocket. You've got to learn some bank shots. The endorsement of the government is worth literally billions.
"With any endeavor there's a possibiity you'll fail, but the support we've gotten from the Costa Rican government has made us confident."
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|Title Annotation:||Costa Rican government backs development plan|
|Comment:||Fort Smith man has big dreams for Costa Rica.(Costa Rican government backs development plan)|
|Date:||Jun 23, 2003|
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