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

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

The reign of free trade. (Letter from the Editor).
June 1, 2001... THIS MONTH, WE DEVOTE A SIGNIFICANT PORTION OF our pages to Central America. While in numbers it is a relatively small piece of the Latin American economic puzzle, the region is an important trade bridge between the Americas, and a stellar...

The government has injected another US$24 million into ailing Aerolineas Argentinas in order to pay back salaries for its workers. (Argentina).
June 1, 2001... The government has injected another US$24 million into ailing Aerolineas Argentinas in order to pay back salaries for its workers. The airline, with nearly US$900 million in debt, had attempted to dismiss 500 employees since a strike began in...

Metrovias has received the first five of 80 high-tech subway cars from French Alstrom. (Argentina).
June 1, 2001... Metrovias (part of Roggio) has received the first five of 80 high-tech subway cars from French Alstrom, part of a US$214 million contract that will include upgrades of the subways' sign system and installation of an operations center.

Buenos Aires' position as a regional technology hub was further enhanced when Japan's NEC Corp. (Argentina).
June 1, 2001... Buenos Aires' position as a regional technology hub was further enhanced when Japan's NEC Corp. announced plans to invest another US$100 million into its technological development center in the city; NEC will develop more Spanish-language...

Energy market spot prices have tripled since the first quarter, as power shortages continue to threaten the country. (Brazil).
June 1, 2001... Energy market spot prices have tripled since the first quarter, as power shortages continue to threaten the country. Faced with a huge power shortfall due to drought (most of Brazil's power is hydro-electric), the government is launching a...

AES Corp. (Brazil).
June 1, 2001... At the same time, power companies are worried that government-mandated energy prices will be too low to justify new investments. AES Corp. has said it will suspend US$2.5 billion in investments for 10 new hydroelectric plants until their...

The government has announced a US$1 billion extension to the Metro subway system. (Chile).
June 1, 2001... The government has announced a US$1 billion extension to the Metro subway system, financed by public debt to be repaid over the next two decades. The 33-kilometer expansion will be added to the current 40-kilometer network, and is expected to...

Grupo Mexicano de Desarollo chairman Jorge Eduardo Ballesteros Franco. (Mexico).
June 1, 2001... Grupo Mexicano de Desarollo chairman Jorge Eduardo Ballesteros Franco, his nephew Juan Pablo Ballesteros Gutierrez and his brother, the late Jose Luis Ballesteros Franco, have been indicted in US court for illegal insider stock trading...

In a separate case, a US court has accused eight people of insider trading related to the purchase of CompUSA by Grupo Sanborns SA. (Mexico).
June 1, 2001... In a separate case, a US court has accused eight people of insider trading related to the purchase of CompUSA by Grupo Sanborns SA., which is owned by billionaire Carlos Slim. The accused include Alejandro Duclaud Gonzalez, a partner in...

The government has ordered Telefonos de Mexico to pay Avantel. (Mexico).
June 1, 2001... The government has ordered Telefonos de Mexico (Telmex) to pay Avantel, Alestra and Marcatel US$210 million and has fined the company US$3.6 million for double-charging the telcos for call interconnection fees. Payback terms for Avantel and...

Toyota Motor Corp. (Mexico).
June 1, 2001... Toyota Motor Corp. has created a Mexican sales unit, Toyota Motor Sales de Mexico, and could possibly build a factory in the country Toyota will begin sales in 2004 under new North American Free Trade Agreement (NAFTA) regulations that will...

President Vicente Fox has bowed to Congressional pressure and backed off on naming businessmen Lorenzo Zambrano, Alfonso Romo Garza and Carlos Slim to the board of Petroleos Mexicanos. (Mexico).
June 1, 2001... President Vicente Fox has bowed to Congressional pressure and backed off on naming businessmen Lorenzo Zambrano, Alfonso Romo Garza and Carlos Slim to the board of Petroleos Mexicanos. In their place, he has named economy minister Luis...

Siderurgica del Orinoco. (Venezuela).
June 1, 2001... Workers at steelmaker Siderurgica del Orinoco (Sidor) have ended their 22-day strike and have agreed to postpone contract negotiations until next year, in exchange for a US$2,940 bonus for each worker. The strike cost the company more than...

Deal spotlight: Citigroup/Banacci. (Portfolio).
June 1, 2001... It's the mother of all Mexican banking deals. Citigroup Inc., the world's largest financial services company, has offered US$12.5 billion in cash and stock for Mexico's No. 2 banking company, Grupo Financiero Banamex-Accival (Banacci). The...

If the Citigroup/Banacci merger was the mother of all banking deals, then Argentina's plan to swap debt is the mother of all bond deals. (Bonds & Obligations).
June 1, 2001... If the Citigroup/Banacci merger was the mother of all banking deals, then Argentina's plan to swap debt is the mother of all bond deals. After months of hand wringing, the government of Argentina announced its plans to swap most of its...

Cia. Siderurgica Nacional. (Bonds & Obligations).
June 1, 2001... In a bid to reduce its debt costs as Latin American bond prices continue to fall, Brazil-based steel maker Cia. Siderurgica Nacional has offered to buy back bonds with a total face value of US$367 million. The outstanding 9.125 percent bonds...

Globo Communicacoes e Participacoes SA, the finance arm of Brazilian media conglomerate Grupo Globo. (Bonds & Obligations).
June 1, 2001... Globo Communicacoes e Participacoes SA (Globopar), the finance arm of Brazilian media conglomerate Grupo Globo, plans to sell 100 million euros (US$87.6 million) of bonds. The three-year bonds pay 9.75 percent interest. JP Morgan Chase & Co....

Telesp Celular Participacoes. (Bonds & Obligations).
June 1, 2001... Telesp Celular Participacoes plans to issue 180-day promissory notes worth US$398 million (900 million reais) on the local market. The mobile communications provider will use the proceeds as a short-term bridge loan to restructure existing...

Portugal Telecom plans a public tender offer this fall worth approximately US$2.4 billion. (Bonds & Obligations).
June 1, 2001... Portugal Telecom plans a public tender offer this fall worth approximately US$2.4 billion. The offer is for the 58.8 percent of shares and American Depositary Receipts (ADRs) that it does not already own of Sao Paulo-based mobile operator...

Celulosa Arauco y Constitucion SA. (Bonds & Obligations).
June 1, 2001... Wood pulp maker Celulosa Arauco y Constitucion SA is looking for US$225 million to finance its expansion. The unit of Chile-based Copec SA plans to use the loan to buy more forest tracts and build a wood board plant in Puerto Piray,...

Vitro SA. (Bonds & Obligations).
June 1, 2001... Mexican glassmaker Vitro SA is negotiating a US$250 million syndicated bank loan to refinance some of its debt coming due in the near future. Vitro corporate finance director Juan Orozco says the money would be used, in part, to refinance a...

Andean Development Corp. (Bonds & Obligations).
June 1, 2001... Caracas-based regional development bank Andean Development Corp. plans to sell up to US$1 billion in bonds this year to finance Latin American projects, says its president, Enrique Garcia. The bank sold US$300 million worth of 10-year bonds...

Argentine steel maker Siderca SA launched a US$36.3 million American Depositary Receipt (ADR). (IPOS).
June 1, 2001... Argentine steel maker Siderca SA launched a US$36.3 million American Depositary Receipt (ADR) offering on the New York Stock Exchange in May. Trading under the ticker symbol SDT, each Siderca ADR represents 10 shares traded on the Buenos...

US-based Clorox Co. will pay US$175 million to acquire a 50 percent stake in Clorox-Bombril S.A. (Investments and M&As).
June 1, 2001... US-based Clorox Co. will pay US$175 million to acquire a 50 percent stake in Clorox-Bombril S.A., a new venture to be formed by Clorox and Brazilian commercial and household solvents firm Bombril SA. The transaction is contingent on, among...

Ivax Corp. (Investments and M&As).
June 1, 2001... Ivax Corp., a Miami-based pharmaceutical maker, has launched a tender to acquire all of Chilean drug company Laboratorio Chile SA (LabChile) for an estimated US$395 million, or US$1.25 per share (US$25 per ADR). Comercial e Inversiones...

Chile's Luksic family confirmed that it plans to merge Banco de Chile and Banco de A. Edwards. (Investments and M&As).
June 1, 2001... Chile's Luksic family confirmed that it plans to merge Banco de Chile and Banco de A. Edwards, a move that will create the biggest private-sector bank in Chile. Guillermo Luksic, chairman of the family's holding company Quinenco SA, says...

Filanbanco SA. (Investments and M&As).
June 1, 2001... The government of Ecuador has moved to capitalize Filanbanco SA with US$300 million from the issuance of state bonds, with the aim of bringing it up to the nation's banking standards. Filanbanco, one of Ecuador's largest banks with more than...

Telefonica SA's wireless unit is reportedly in talks to buy a major stake of Mexican wireless operator Pegaso PCS SA. (Investments and M&As).
June 1, 2001... Telefonica SA's wireless unit is reportedly in talks to buy a major stake of Mexican wireless operator Pegaso PCS SA, which is part-owned by US-based Sprint Corp. PCS Group. Analysts value Pegaso at between US$1.1 billion and US$1.5 billion,...

Mexican cement giant Cemex has bought a 99 percent stake in Thailand-based Saraburi Cement Co. (Investments and M&As).
June 1, 2001... Mexican cement giant Cemex has bought a 99 percent stake in Thailand-based Saraburi Cement Co. for US$73 million. The purchase, made through its Cemex Asia Holdings unit, may be a precursor to entering the Japanese market. Japanese newspapers...

Remittances.
June 1, 2001... Remittances (US$millions) Mexico $6,795 % of GDP: 1.4 ElSalvador $1,580 % of GDP: 12.6 Honduras $368 % of GDP: 6.8 Nicaragua $345 % of GDP: 14.4 Ecuador $1,247 % of GDP:...

The price of not being transparent.
June 1, 2001... Opacity in a country's business environment often means in-country and foreign investors are more reluctant to invest money and resources. PriceWaterhouseCoopers has surveyed chief financial officers, bank loan officers, analysts and PWC...

Exposure to US recession. (Bulletin Board).
June 1, 2001... * Percent of Mexico's GOP from exports to US: 24.9% * Percent of Chile's GDP: 4.6% * Percent of Brazil's GDP: 2.0% * Percent of Argentina's GDP: 0.9% Source: The Economist

Office space. (Bulletin Board).
June 1, 2001... * Vacancy rate for AA office space in Sao Paulo: 5% * Vacancy rate in 1999: 16% * Usable office space in Sao Paulo: 7.3 million square meters * Population of Sao Paulo: 17 million * Usable office space in London: 27 million...

Shoe shorn. (Bulletin Board).
June 1, 2001... * Total shoes exported from Brazil in 2000:162,430,000 * Total value: US$1.5 billion * Average cost of Brazil footwear, early 2000: US$8.27 per pair * Average cost, early 2001: US$9.04 per pair Source: Federation of...

Oil source. (Bulletin Board).
June 1, 2001... * Oil produced in Ecuador: 380,000 barrels per day * Oil exported by Ecuador: 220,000 barrels per day * Largest source of income in Ecuador: oil * Percent of government budget that comes from oil revenues: 26% * Portion of...

Generic medicines. (Bulletin Board).
June 1, 2001... * Generic medicines available in Brazil, year-end 2000: 70 * Number approved: 190 * 2000 generic sales: US$150 million * Brazil's rank world-wide as a medicine consumer: No. 6 * 2000 generic sales in US: US$10.8 billion ...

Waste not, want not. (Energy).
June 1, 2001... A Chilean food company has launched a pilot project that will harness methane gas from pig excrement and turn it into energy -- solving the problem of what to do with the waste that the company's nearly 500,000 pigs generate. The initiative,...

Out of Brazilian forests. (Manufacturing).
June 1, 2001... Amazonas rubber tappers and Parisian women carrying bags made from the same material? Correct. After seeing rubber tappers carrying their tools in latex bags, Brazilian businessman (and former politician) Joao Augusto Fortes helped create a...

The interactive life. (Communications).
June 1, 2001... US-based software giant Microsoft Corp. and Globo Cabo, Brazil's largest pay-television provider, recently announced a joint venture to establish interactive TV services in Brazil. A trial period for the project, which represents Microsoft's...

Match maker. (Strategies).
June 1, 2001... MasActivo uses the Internet as a key platform to deliver buyer/seller linkages for businesses in Latin America. Just don't tell the industrial equipment firm's CEO that he is operating a New Economy company. ROBERTO VASQUEZ DOES not look...

Wooden dreams: call it good fortune, but being in the right place at the right time has made CEO George Satt a chairman of a different sort. (Strategies).
June 1, 2001... AS STUDENTS ATTENDing college in North Carolina, George Satt and classmate Chris Anderson thought they could make money importing lumber from back home in Bolivia and neighboring Brazil. After all, the Carolinas were (and still are) home to...

Power play: with a hydroelectric power shortage shaking mercosur neighbor Brazil, the CEO of Chilean power generator Gener finds himself lobbying the government to prevent a similar meltdown in Chile. (Strategies).
June 1, 2001... ANDRES GLUSKI LOOKS relaxed, dressed in a sports shirt and slacks behind the chief executive's desk at Gener, Chile's second-largest electricity generator and, since January the property of US-based AES. "I've decided to import dress-down...

Pencil me in: the CEO of Faber-Castell, the world's top pencil maker, sets his sights on Latin America. Why not? Most of his production is already in Brazil. (Strategies).
June 1, 2001... THE NAME MAY BE A mouthful, but the message from Baron Anton Wolfgang Graf von Faber-Castell is pretty simple. "We want to be your company for life," says the CEO of Faber-Castell, whose annual production of 1.8 billion units makes it the...

Ecuadoran taste: Jose Luis Alvarez has not only survived Ecuador's worst economic crisis. The CEO of the country's largest hotel chain has also capitalized on it--and on the local yearning for Ecuadoran culture.
June 1, 2001... TWO YEARS AGO, WHEN banks were collapsing and Ecuador's biggest companies were closing down, Jose Luis Alvarez did what any good entrepreneur would do: expand. His company, Apartec, bought a 15-floor office building whose owners could not...

Economic renaissance. (Central America Report).
June 1, 2001... A decade ago, Central America was ripped apart by civil and political turmoil. Now, following a remarkable turnaround and economic reconstruction, it has emerged as a magnet for tourism, foreign investment and trade. No question, Central...

Grupo Real: a taste of the good life.
June 1, 2001... GRUPO REAL, A HOTEL MANAGEMENT company with ten owned and operated and five franchised properties in Central America, Mexico, and the United Stares, is one of the four operating companies of Orupo Poma. Grupo Poma opened its first 5-star...

The first credit card that unites four Central American leaders.
June 1, 2001... GRUPO FINANCIERO UNO * GRUPO REAL * GRUPO TACA * VISA Four leading companies have pooled their resources to provide their clients with the Banco Uno Distancia Platinum Card. In the last decade, there have been significant changes in...

The Maseca maize.
June 1, 2001... At age 47, Jaime Costa has built a reputation in Mexico as a turnaround man for food beverage companies. He has successfully served as CEO of Coca-Cola Femsa, Industrial Lala and Allied Domecq. Now he has another challenge on his hands:...

Brazilian hothouse: Brazilians are being asked to turn the lights down low as electric utilities scramble to turn the juice up... for the nation and their stocks. (Marketplace: Equities).
June 1, 2001... THE ENERGY CRISIS HAS REACHED BRAZIL AND the impact, so far, is anything but pretty. For most of the rest of this year the nation's 171 million-plus population will be asked to cut back on electric use while living with the likelihood of...

Recreate and relax: everyone has their own way of relaxing-working out, playing golf, indulging in a hobby. These gadgets will help you make the most of your recreation time. (Style of Life: Gadgets).
June 1, 2001... * RICOH RDC-7 DIGITAL CAMERA If your idea of recreation runs to less active pursuits, you might enjoy this little digital imaging powerhouse. It captures both still pictures and video, and stores it on 8 megabytes of built-in memory. Of...

Days of wine and profits: vineyards come of age with offerings at the high end of the spectrum and a variety to rival the wine regions of France and California. (Style of Life: Wines).
June 1, 2001... TWO KINDS OF PEOPLE WRITE ABOUT WINE: expert critics and plain lovers of wine. I belong to the latter. The former, purist and often pedantic, enjoy dropping names in their descriptions like acidity, countertaste, tannic content, tarse and...

Skiing at the end of the world: Southern Argentina has become a real option for northern tourists who want to go skiing on their summer vacation. (Style of Life: Travel).
June 1, 2001... WHEN ONE THINKS OF WORLD CLASS skiing, it is the Alps, the Rockies or even the Pyrennes which come to mind. But the buzz these days is about the Andes and the skiing centers of southern Argentina, which have become in recent years comparable...

Aviation policy: who decides? Its time for the aviation industry to take the lead in liberalization. (Final Thoughts).
June 1, 2001... SIGNIFICANT CHANGES IN INTERNATIONAL aviation in Latin America can't be very far off. I've been saying that for the past 12 years, and so far I've been mostly wrong. Today I'm somewhat more agnostic about the prospects for meaningful growth...