Latin CEO: Executive Strategies for the Americas articles from December 2001

Latin CEO: Executive Strategies for the Americas archives from December 2001

Turning point. (Letter from the Editor).
December 1, 2001... As LATINCEO was preparing to go to press this month, a most extraordinary event occurred in Venezuela: Some 70 percent of the nation's workforce ground to a halt to protest President Hugo Chavez and his administration's seeming inability to...

New Petrobras Pres. (Upfront: Brazil).
December 1, 2001... Francisco Gros is slated to replace Henri Philippe Reichstul--who resigned for health reasons--as president of Petroleo Brasileiro. Gros, currently the head of development bank BNDES and for merly Latin American chair man for Morgan Stanley...

VW Strike stops. (Upfront: Brazil).
December 1, 2001... Workers at Volkswagen's Anchieta plant outside Sao Paulo have accepted a 15 percent salary reduction, schedule cuts, and a voluntary retirement program, in return for ending a week-long strike. The strike began when VW fired some 3,000...

Shareholder rights. (Upfront: Brazil).
December 1, 2001... A new law has passed which guarantees a company's minority (voting) shareholders 80 percent of the price paid to controlling shareholders in any takeover or acquisition. The law also sets penalties for financial crimes. While heralded as one...

Copper cutbacks. (Upfront: Chile).
December 1, 2001... Russian copper producers have joined Chilean mines in cutting production through 2002 in order to raise prices. The price of copper hit a 14-year low in November, down 20 percent since the beginning of 2001 (it has since rebounded somewhat)....

Water works. (Upfront: Chile).
December 1, 2001... Britain's Thames Water PLC has paid US$171 million for a 30-year license to operate water utility Empresa de Servicios Sanitarios (Essam), which serves 4.4 percent of the national market.

Telecom and tech. (Upfront: Chile).
December 1, 2001... Telefonica CTC has outsourced its information technology services to IBM Chile (part of US-based IBM) in a US$87.3 million deal. IBM will provide IT services at the corporate level and to Telefonica CTC's data customers.

Regional air travel. (Upfront: Chile).
December 1, 2001... LanChile has spent US$200 million to consolidate and expand domestic and regional air travel services offered by it and subsidiary Ladeco into a separate company, called LanExpress. LanExpress is targeting the60 million bus trips taken by...

Generation Power. (Upfront: Guatemala).
December 1, 2001... US-based Duke Energy International has purchased Grupo Generador de Guatemala from US-based Constellation Energy Group. The two plants in the group have a combined generating capacity of 167 megawatts, and Duke is adding another 160...

Natgas fill-up. (Upfront: Mexico).
December 1, 2001... Gaz de France will invest US$500 million in natural gas transmission in the nation over the next five years. Plans include launching a natural gas distribution company for both individuals and businesses. GDF already owns two natural gas...

Bank jobs withdrawn. (Upfront: Mexico).
December 1, 2001... Another 3,600 jobs at Citigroup's Grupo Financiero Banamex-Accival (Banacci) will be cut as the company eliminates redundancies among its Mexican units following the US$12.5 billion merger between Citigroup and Banacci.

Land Canal. (Upfront: Panama).
December 1, 2001... Panama's new transcontinental railroad, which connects Latin America's largest container port in Colon (on the Gulf of Mexico) with the container port in Balboa (on the Pacific coast), has begun shipping cargo and passengers. US-based Kansas...

Oil law threatens investment. (Upfront: Venezuela).
December 1, 2001... Venezuelan President Hugo Chavez has decreed a new law that raises oil royalty payments to the government from the current 16.6 percent of revenues to between 20 percent and 30 percent. The new rates will be highest in the industry worldwide....

Business strike. (Upfront: Venezuela).
December 1, 2001... Members of Fedecamaras, the organization which represents the business leaders from nearly all of Venezuela's non-oil industries, have planned a 12-hour strike on Dec. 10 to protest 10 of President Chavez's 49 new business laws, including...

Central-American electricity. (Upfront: Regional).
December 1, 2001... Endesa of Spain has joined six state-owned Central American electricity generation companies to create a single regional grid that will include a 1,144-mile, 230-kilovolt power line from Guatemala to Panama, and could eventually link to...

Digital signatures signed off. (Upfront: Argentina).
December 1, 2001... The senate has approved a digital signature bill (it passed the lower house in August) that creates standards for online documents, digital certificates, and the fights of holders of digital licenses. The law also requires the government to...

External debt payments.
December 1, 2001... External Debt Payments Gross payments toward external debt in 2000 (US$ millions) Mexico 148.8 Honduras 4.6 Guatemala 3.9 El Salvador 2.9 Costa Rica 4.1 Panama 5.6 Ecuador 13.5...

Cost of office space.
December 1, 2001... Cost of Offuce Space The cost of office space in certain cities in Latin America, such as Buenos Aires and Sao Paulo, has been among the highest in the world. Rates peaked in 2000, however, and have come down in most cities this...

Vacationing at home. (Bulletin Board).
December 1, 2001... * Increase in domestic travel by Brazilians since Sept. 11: 21% * Decrease in foreign travel by Brazilians since Sept. 11: 24% * Expected increase in foreign travel to Brazil during 2001: 13% * Travel agency revenues from domestic...

Gas demand billows. (Bulletin Board).
December 1, 2001... * Natural gas consumption in Argentina in 2000: 1.7 billion liters * Change from 1999: 11.4% * Change in consumption of regular gasoline from 1999 to 2000: -26.7% * Total natural gas vehicles in Argentina in 2001: 668,480 *...

IDB changes course. (Bulletin Board).
December 1, 2001... * Total active loans at Inter-American Development Bank: US$49 billion * Urban development loans, 2000: 13% * Urban development loans, 1989: 2.4% * Transportation and communications loans, 2000: 8% * Transportation and...

Laundered cash. (Bulletin Board).
December 1, 2001... * Suspicious banking transactions reported in Colombia, 1998-2001: 20,748 * Formal investigations opened: 24 Source: Agence France Presse

Mexico going hydro. (Bulletin Board).
December 1, 2001... * Potential hydroelectric power in Mexico: 50,000 MW * Potential hydroelectric sites in Mexico: 580 * Sites developed: 20% * Potential state power company investments for hydroelectric site through 2006: US$3 billion Source:...

Energy rationing killing aluminum. (Bulletin Board).
December 1, 2001... * Decrease in Brazilian aluminum production, January to September 2001, compared to same period 2000: -7.6% * Decrease from August to September 2001: -4.8% * Decrease from September 2000 to September 2001: -22.5% Source:...

Vesper. (Investments, IPO's and M&A's).
December 1, 2001... * Brazilian wireless services provider Vesper received a cash infusion of US$346 million from US tech firm Qualcomm, and Brazil-based VeloCom. The money re-capitalized the failing company, and placed 74 percent of its ownership in Oualcomm's...

New York Stock Exchange. (Investments, IPO's and M&A's).
December 1, 2001... * Brazil's Banco Bradesco launched Level 2 American Depository Receipts (ADRs) on the New York Stock Exchange Nov. 21. The shares, listed at US$25 each, should raise the bank's liquidity and its profile. Unlike Level 1 ADRs, which are limited...

Brasil Telecom. (Investments, IPO's and M&A's).
December 1, 2001... * Brasil Telecom Level 2 ADRs also began trading on the NYSE on Nov. 16 under the ticker BTM. Each ADR represents 3,000 local shares. CEO Carla Cico told reporters the move gives minority shareholders more access to liquidity and opens the...

Companhia Energetica de Minas Gerais. (Investments, IPO's and M&A's).
December 1, 2001... * Companhia Energetica de Minas Germs (Cemig) placed US$245 million worth of 10-and 8-year bonds on the local market Nov. 13. The bonds will be used to pay for electricity generation projects already underway. The Brazilian state of Minas...

MetLife. (Investments, IPO's and M&A's).
December 1, 2001... * US-based insurance company MetLife will acquire Santiago-based re-insurer Soince and Santander Seguros, units of Santander Central Hispano. Price tag: US$250 million. The US$1.1 billion-asset Santander Seguros will operate under the name...

BankBoston. (Investments, IPO's and M&A's).
December 1, 2001... * US-based BankBoston has acquired the Chilean personal banking portfolio of ABN-Amro for an undisclosed amount. The Dutch bank has nine branches in Chile and 13,304 accounts.

Cerve-cerias Baru-Panama SA. (Investments, IPO's and M&A's).
December 1, 2001... * Colombia's largest brewer, Bavaria SA, says it will buy a controlling interest in Cerve-cerias Baru-Panama SA from Coca-Cola de Panama for US$13.50 a share--a US$3.50 premium. In October, Bavaria announced plans to acquire Panama's only...

US Treasuries. (Investments, IPO's and M&A's).
December 1, 2001... * The Colombian government sold US$500 million of 10-year bonds Nov. 14. The bonds bear a coupon of 10 percent and are priced at 97.52 to yield 10.39 percent--a spread of about 582 basis points above US Treasuries of similar maturity.

Petroleos Mexicanos. (Investments, IPO's and M&A's).
December 1, 2001... * Petroleos Mexicanos (Pemex) issued US$750 million of 10-year bonds on Nov. 14 instead of the US$500 million it had planned. The over-subscribed issue will likely yield a spread of 20 basis points more than government bonds of the same term.

Verizon Communications. (Investments, IPO's and M&A's).
December 1, 2001... * Mexican cell phone company Iusacell completed a US$100 million rights offering to its Series V shareholders. Verizon Communications and Vodatone Group subscribed for approximately US$72 million, an aggregate of 42 percent of Series V shares.

Altos Hornos de Mexico. (Investments, IPO's and M&A's).
December 1, 2001... * Altos Hornos de Mexico (Ahmsa) says it may restart debt payments now that the iron and steel company has hired US-based agent the Weston Group. Details were not forthcoming. Approximately US$500 million of Ahmsa's US$1.85 billion debt are...

Telefonos de Mexico. (Investments, IPO's and M&A's).
December 1, 2001... * Telefonos de Mexico (Telmex) paid the Guatemalan government US$451.8 million as the final installment of the telco's 84 percent stake in Telgua, Guatemala's largest telco. Telmex has also pledged to invest US$300 million more in Telgua...

Falling star? (Deals Spotlight).
December 1, 2001... * The sun may be setting on once high-flying Internet company StarMedia Corp. The New York-based firm, which had been among the first and most vocal proponents of the Internet in Latin America, announced Nov. 19 that it would restate its...

Default watch: Argentina. (Deals Spotlight).
December 1, 2001... * Cut Argentina some slack. On Nov. 19 the beleaguered, cash-strapped nation began the first phase of its planned swap of US$60 billion of locally held bonds. Economy Minister Domingo Cavallo asked the lenders to accept new securities...

Just add water. (Manufacturing).
December 1, 2001... Gerdau has long been one of Brazil's most successful steel manufacturing companies, producing components for the construction business and other heavy industry sectors. Now, the company is quickly finding itself in the business of home...

All that glitters. (Illegal Substances).
December 1, 2001... The struggle to eliminate the production of illegal drugs in Latin America has always run into one major stumbling block: the crops designated to replace coca and poppies--used for narcotics--are simply not as lucrative. Now, Governor...

Where to next? (Technology).
December 1, 2001... You've just finished a late-afternoon meeting and things didn't go well. You could use a stiff drink, but are in an unfamiliar part of town. If you're a Telernig Celular user in the Brazilian state of Minas Gerais, you could pull out your...

Mexican birds fight the new flocks: the Mexican government's latest concessions for satellite signals in its territory has Satmex CEO Lauro Gonzalez crying foul. (Strategies).
December 1, 2001... STRUGGLING IS NOTHING new for 39-year-old Lauro Gonzalez, the CEO of Mexican satellite company Satmex. His teenage dream to be a soccer star was crushed after a go-kart accident placed him in a wheelchair for two years. Once he could walk...

Shining star: In the rough-and-tumble world of supplying cell phones to Latin America, Brightstar has bested its competition with a combination of smart selling and cultural savvy. (Strategies).
December 1, 2001... LIKE A LOT OF COMPANIES, wireless telephone handset distributor Brightstar Corp. was rattled by the Sept. 11 terrorist attacks that rocked the US--and world--economy But once the smoke cleared, the company saw little evidence that its...

The big squeeze: the selling of design: how Venezuela's tiny OrangeX and its CEO Carlos F. Egana turned orange juicers into a big export business. (Strategies).
December 1, 2001... CARLOS F. EGANA sees gold in every glass of orange juice. With every squeeze, the 37-year-old CEO of OrangeX is wringing more profit from his company's housewares products, some of which now line the shelves of top-name US retailers such as...

Desert bloom: the top executive at Chile's PCS Yumbes is ready to take on his much larger fertilizer-mining rival Soquimich--even if his firm's parent company is now a minority owner of the competition. (Strategies).
December 1, 2001... MARK BOULANGER, the top executive in Chile for PCS Yumbes, is holding forth in a Yumbes boardroom in Santiago. The room is decorated with bottles of white, granular nitrates and miniature excavators--small-scale models of the machinery used...

Ecuador's leading lady: Isabel Noboa came from a wealthy family. But don't hold that against her. She's a self-made woman whose conglomerate, Nobis SA, holds some of Ecuador's leading firms. (Strategies).
December 1, 2001... IN 1994, ISABEL NOBOA was set for life. She stood to inherit part of a US$1.8 billion fortune when her father, the late banana baron Luis Noboa, passed away that year. Instead of living off her inheritance, the eldest Noboa daughter--a mother...

Where there's smoke there are profits: Cigarette smoking may be declining in the US, but not in Brazil, where market leader Souza Cruz and its smoking CEO Flavio de Andrade are taking on all corners in the multi billion-dollar market.
December 1, 2001... FLARIO DE ANDRADE BEGINS OUR long anticipated interview not with a "Bom dia, how are you?" or a "Please sit down," but with a cheery "Mind if I smoke?" If he were anyone--or anywhere--else, the request might seem politically incorrect....

Banorte stands alone.
December 1, 2001... Now that CEO Othon Ruiz has engineered the latest of a series of Mexican bank mergers, Banorte becomes the largest homegrown financial institution in the nation. With fewer players on the field, is consolidation in Mexico's banking sector...

Cellular conquests.
December 1, 2001... When Portugal Telecom entered Brazil's cellular telephone market, industry observers thought the company had paid too much for incumbent Telesp Celular. More than three years later, Telesp rules the Brazilian market - and CEO Carlos...

Driving to salvation--or disaster. (Industry Trends).
December 1, 2001... The recently released study, The Impact Of Mercosur On the Automobile Industry concludes that the sector has become a pillar of the Southern Cone economy. But reforms will be needed for the industry to thrive in an increasingly competitive...

Mexico's top 10 banks (by assets). (Executive Briefing).
December 1, 2001... MEXICO'S BANKS have spent the year consolidating and digesting mergers, as evidenced by the size of No. 10 Interacciones, relative to No. 1 and No. 2 banks BBVA-Bancomer and Banamex. More consolidation is on the way: Citibank has purchased...

Uncertainty and Optimism: Colombia's leaders sound optimistic that the Andean nation will experience economic growth through 2005, but significant hurdles remain to be addressed. (Country Outlook: Colombia).
December 1, 2001... FOR COLOMBIA, THINGS could not be much worse. The nation of 42.3 million continues to be mired in a civil war that has displaced approximately 3 percent of its population during the last decade. And economic prospects appear dim in light of...

Hot laps: the latest laptop computers reveal more of everything--mostly more power in a smaller box. (Gadgets).
December 1, 2001... For years, we've referred to laptop computers as notebooks. Now they've finally gotten small enough to really deserve the designation. There are lots of options out there, from desktop replacements with a full complement of ports and drives,...

Urban renewal: Mexico's richest man throws his hat into the effort to restore the historic center of Mexico City. (Places).
December 1, 2001... CARLOS SLIM HELU, LATIN AMERICA'S wealthiest person and patriarch of Carso Global Telecom, Grupo Carso and Grupo Financiero Inbursa, is a man of few words. He usually limits his press conferences to one, sometimes two, a year, and these...

A quiet auction: Christie's and Sotheby's annual New York auctions of Latin American art were quiet affairs this year--though they did produce a few new record prices for select artists. (Art).
December 1, 2001... IN THE WAKE OF THE SEPT. 11 TERRORIST ATTACKS, the mood was subdued during the eve of Christie's annual auction of Latin American art. Bidders were modest and selective as they raised their paddles. The room was quiet and several chairs were...

Trade Greens the Environment; the newest case for free trade: open market economies are cleaner, greener and far more prosperous. (Final Thoughts).
December 1, 2001... As THE UNITED STATES CONGRESS prepares to vote on whether to grant Trade Promotion Authority (TPA) to President Bush, activists again are raising the specter of an environmental "race to the bottom" caused by free trade. While mostly...