SPECIAL REPORT: LOGISTICS, THE NEW OPPORTUNITIES
YOUR BUSINESS SOURCE FOR LATIN AMERICA » WWW.LATINTRADE.COM SEPTEMBER/OCTOBER 2013
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RECOGNIZING EXCELLENCE AND LEADERSHIP IN GOVERNMENT, BUSINESS AND SOCIAL DEVELOPMENT
BUSINESS AWARDS 2013
S
Otto Pérez Molina • María das Graças Silva Foster • Álvaro Fernández Garza Germán Efromovich • Ignacio Antoñanzas • The Goodyear Tire & Rubber Company
Magalie Dresse • Marina Silva • Enéas Pestana
ALSO INSIDE:
A TRUTH ABOUT PDVSAPRIVATE BANKING AND PHILANTHROPY
EXECUTIVE EDUCATIONFINANCE: LATIN AMERICA 2014
www.arcosdorados.com
www.arcosdorados.com
4 LATIN TRADE SEPTEMBER-OCTOBER 2013
CONTENTS SEPTEMBER/OCTOBER 2013 VOL. 21 No.5
30 40 42
28 30 32 34
26 36 38 4240
FeaturesBRAVO Business Awards 19: The 2013 Winners
26 Leader of the Year: Otto Pérez Molina, President of Guatemala 28 Lifetime Achievement: María das Graças Silva Foster, CEO, Petrobras30 CEO of the Year: Álvaro Fernández Garza, CEO, Alfa32 Innovative CEO of the Year: Germán Efromovich, CEO, Synergy Group34 International CEO of the Year: Ignacio Antoñanzas, CEO, Enersis36 Trade Americas BRAVO Award: The Goodyear Tire & Rubber Company38 Innovative Social Sustainability: Magalie Dresse, President, Caribbean Craft40 Distinguished Service in the Hemisphere Award: Marina Silva, Former Senator of Brazil and Director of the Institute of Democracy and Sustainability 42 Dynamic CEO of the Year: Enéas Pestana, CEO, Grupo Pão de Açúcar
46 Lawyers: Iberian Action Spanish Wave
The top law firms are going at it alone.
50 Oil & Gas: PDVSAThe ugly truth about PDVSA
56 Private Banking: Philanthropy The altruistic angle
62 Foundations: High ImpactHouses with a heart
Ronald McDonald House Charities is one of the few foundations that extend throughout the entire region of Latin America. A case study of high impact.
64 Investment: UruguayA national purpose Its investment climate makes it a magnet
for foreign investment.
66 Special Report: Executive EducationThe search for the ideal executive
The skills and training firms look for.
Special Report: Logistics The opportunities of the new international order of logistics.
84 Economy: Forecast 2014 Better, but not the best Predictions for Latin American economies.
88 Ranking: The 25 Most Powerful Women The women at the top Meet the women who head the Latin American
business community.
23-43
72-82
6 LATIN TRADE SEPTEMBER-OCTOBER 2013
CONTENTS SEPTEMBER/OCTOBER 2013 VOL. 21 No.5
Editor’s Note8 Leadership, the key to growth
The Scene 12 Entrepreneurship and Social Mobility
12 Opportunities in the United States
Opinion14 The Contrarian: Latin America’s
Booming PharmaBy John Price. Read about how pharma
has become a local affair.
Agribusiness16 Olives
The new American fruit.
Beverages18 The promised land
China gives the Mexican drink a shot.
On the Road94 Duty-free: Growth, Challenges & Change.
The Latin American duty-free market evolves.
Events 98 CFO Bogota
A good lesson from Sura´s CFO.
100 CFO Sao PauloThe road ahead.
SPECIAL REPORT: LOGISTICS, THE NEW OPPORTUNITIES
YOUR BUSINESS SOURCE FOR LATIN AMERICA » WWW.LATINTRADE.COM SEPTEMBER/OCTOBER 2013
RECOGNIZING EXCELLENCE AND LEADERSHIP IN GOVERNMENT, BUSINESS AND SOCIAL DEVELOPMENT
BUSINESS AWARDS 2013
Otto Pérez Molina • María das Graças Silva Foster • Álvaro Fernández Garza Germán Efromovich • Ignacio Antoñanzas • The Goodyear Tire & Rubber Company
Magalie Dresse • Marina Silva • Enéas Pestana
ALSO INSIDE:A TRUTH ABOUT PDVSA
PRIVATE BANKING AND PHILANTHROPYEXECUTIVE EDUCATION
FINANCE: LATIN AMERICA 2014
Cover: 19th Annual BRAVO Business Awards Photo: Pablo Blazquez
WebFind us online at www.latintrade.com
16
94
14
ERRATUMOn page 73 of our July/August issue, by mistake we identified Francisco Estrazuelas de Souza, consultant Connect Americas at the IDB, as Daniel Veron. Our sincere apologies.
On the list of the Latin 500 we erroneously classified Skanska as an auto maker. It should be classified under construction. Skanska is involved in construction, commercial property and public private partnerships.
8 LATIN TRADE SEPTEMBER-OCTOBER 2013
Santiago Gutiérrez,
Executive Editor
EDITOR’S LETTER
LEADERSHIPTHE KEY TO GROWTH
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Big entrepreneurial success stories are
becoming more and more common in
Latin America. Th e list of large, effi cient
international companies has grown, and
they have become more relevant to the
world economy.
Th e explanation for their success goes be-
yond high commodity prices or the growth of
the middle class. On one hand we have enor-
mous worldwide liquidity that has lowered
interest rates and moved investors’ money
into the developing economies, where there
is a higher return on capital. Th ere is also
growth in local savings in the pension funds,
the retreat of multinational fi rms to the their
trenches in their fi rst-world home countries,
and the changes in the way goods are made
in global manufacturing chains that require
decentralized production processes in dif-
ferent parts of the world. In large and small
ways, all of this is creating a space for the
growth of local companies.
In the last few years a powerful economic
and fi nancial tail wind has been generated
which facilitates the take-off of companies
in the region. All of the companies, the good
and the not so good, have felt this positive
Never have there been changes of direc-
tion so profound, or results so favorable in this
region like those of the last fi ve years. Behind
those changes are managers who are ever more
audacious but who are increasingly tying their
actions to their basic corporate values. Th e
proof? Th e leadership styles of the CEOs who
are winners of the BRAVO 2013 Prizes in
Business who are showcased in this edition.
As we have learned in so many ways in
Latin America, opportunities are worthless
without business leaders who fi nd them and
take advantage of them for the good of all.
Hence, an extraordinary tool for accelerating
economic growth would be to make good cor-
porate leadership a more abundant resource.
For now, it’s still re-
freshing to think that
you can be successful
in any sector, provided
that the leader allows it
to happen.
eff ect. Th e same is happening to the region’s
countries. Almost all of them grew regardless
of their starting point or their policies. To put
this in more familiar terms, paraphrasing the
old adage, it was the hurricane that enabled
even turkeys to fl y.
In spite of such favorable conditions, the
fastest and most long-lasting growth will
surely come from the companies with the
best leadership. Th e proof? Th e facts. With
just two exceptions (chemicals and manu-
facturing) the diff erence between companies
with the biggest and the smallest operating
margins in the 22 sectors included in the
Latin 500 of Latin Trade is above 14 per-
centage points. Th e average diff erence is 35
percentage points and in some sectors, such
as energy, retail, aluminum and beverages, it’s
more than 50 points. Th at’s a huge diff erence
between the two extremes (See the details at
www.latinbusinesschronicle.com). What this
means is that the profi ts of a company don’t
depend on the industry but on the leadership
each one has for conceiving and executing its
strategic decisions. Th e best companies have
operating margins of up to 50 points larger
than the worst ones.
ENERO-FEBRERO 2013 LATIN TRADE 9
10 LATIN TRADE SEPTEMBER-OCTOBER 2013
CEO
Rosemary Winters
EXECUTIVE DIRECTOR & PUBLISHER
María Lourdes Gallo
EXECUTIVE EDITOR
Santiago Gutiérrez
DEPUTY EDITOR
Mark A. Keller
ART & PRODUCTION DIRECTOR
Manny Melo
GRAPHIC DESIGNER
Vincent Becchinelli
CONTRIBUTING EDITORS
Gabriela Calderón (research), Mark Ludwig
COLUMNIST
John Price
CORRESPONDENTS Argentina: Élida Bustos, David Haskel, Charles Newbery • Brazil: Taylor Barnes (Rio de Janeiro),
Vincent Bevins, Thierry Ogier, (São Paulo) • Chile: Gideon Long China: Ruth Morris • Colombia: John OtisMexico: Arturo Franco (Mexico D.F.), Nancy Ibarra (Monterrey) Peru: Lisa K. Wing, Ryan Dube
Spain: Sergio Manaut • US: Alejandra Labanca, Joseph Mann Jr. , David Ramírez, Álvaro Moreno, Jaime Mejía (Miami), Mark Chesnut (NY) • Uruguay: Diego Stewart • Venezuela: Peter Wilson
TRANSLATION: Ken Emmond, Élida Bustos, Alejandra LabancaCOPY EDITING: Millie Acebal Rousseau, Élida Bustos
SALES & CIRCULATION
Miami/Pan-regional sales: Silvia Clarke, Senior Account Manager/Team LeaderMercedes Fernández, Business Development Director
Andean region/Central America: María Cristina Restrepo, ManagerDubai: Stephen Dioneda
Marketing & Sales Associate: Cristina DiazMarketing & Sales Coordinator: Viviana González
For advertising/sponsorship opportunities: [email protected] or [email protected]
LATIN BUSINESS CHRONICLE
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OFFICE MANAGER & CIRCULATION
Claudia Banegas
Latin Trade Group
CHAIRMAN
Richard Burns
CHIEF OPERATING OFFICER
Joanne Harras
ACCOUNTS MANAGER
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Page
87 MARKETING
CHIEF MARKETING OFFICER
Nick MilesMARKETING MANAGER
Gina Ortela
EVENTS & CONFERENCES
PROGRAM MANAGERS
Victoria Kenny, Yndira Marin, Drew Westervelt
EVENTS EXECUTIVE
Ileana CutiéAUDIENCE DEVELOPMENT
Ana Laura Miranda
12 LATIN TRADE SEPTEMBER-OCTOBER 2013
FIVE SECTORS COULD
SUBSTANTIALLY PROMOTE
THE GDP OF THE UNITED
STATES BY 2020
...AND TWO OFFER EVEN
GREATER IMPACT BY 2030
Incr
em
en
to a
nu
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de
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IB (
en m
iles
de m
illon
es d
e U
S$)
380-690
200-590
155-325 270-320165-265
THE SCENE
The Inter-American Development Bank (IDB) has published
the study Is Entrepreneurship a Channel of Social Mobility in
Latin America? in which its authors, Francesca Castellani and Edu-
ardo Lora, fi nd that entrepreneurship doesn’t occur among people
by chance. In fact, the evidence shows that entrepreneurs are found
more frequently among higher-income groups who have more prob-
ability of having experienced intergenerational social mobility – that
is, who have more years of education than their parents. Th e authors
also show that in Colombia, for example, entrepreneurship is more
common among more educated older men. In Uruguay, the children
of entrepreneurs receive more years of education than the children
of those who are not in business, regardless of the education level
of the parents. Th e results of these two countries suggest that entre-
preneurs are as much the result of more social mobility, as they are
the cause of it. In Mexico, the authors found that the probability
of becoming an entrepreneur increases when the father has also es-
tablished a business of his own, which suggests that there is a high
“model to follow” eff ect.
According to Game Changers: Five
opportunities for US growth and
renewal, a report published by McKinsey
Global Institute (MGI), growth in the
United States over the next 10
years will come from fi ve sectors:
energy, trade, technology, infra-
structure and talent. Th e latter two
sectors will be important sources of
growth until 2030. Latin America
has enormous opportunities in
some of the fi ve catalysts identifi ed
by the global consultant, mainly
in trade, infrastructure and energy,
given that, in addition to favoring
trade with the United States, the
region could increase the invest-
ment of its multinationals by
having a presence in these sectors
there. To identify the catalysts,
MGI looked for developments that
are at the point of achieving scale,
as well as areas with an immediate
opportunity for action. Th e cata-
lysts could have an eff ect on the
demand from stimuli that the economy will
receive in the short run and could also have
longer-term eff ects which favor American
competitiveness and productivity. If we are
to take seriously the recommendations of
the report, we would be close to a takeoff
point for the American economy that
Latin America could capitalize on.
ENTREPRENEURSHIP AND SOCIAL MOBILITY
OPPORTUNITIES IN THE UNITED STATES
SOCIAL ORIGIN OF ENTREPRENEURS (percentage)
Source: IDB, Is Entrepreneurship a Channel of Social Mobility in Latin America?
Note: Social classes are defined according to the ranks: daily income per capita of less than $10 PPP corresponds to the lower class; between $10 and $50 corresponds to the middle class; and more than $50 corresponds to upper class
Sources: Economist Intelligence Unit; IHS Global Insight; and McKinsey Global Institute
Social Class Argentina Brazil Colombia Ecuador El Salvador Peru
Lower Class 23.3 19.8 34.4 42.3 51.6 62.0
Middle Class 63.9 61.3 46.3 50.6 44.2 33.2
Upper Class 12.8 18.9 19.3 7.0 4.2 4.8
Sector/participation in the GDP of 2020
An
nu
al
GD
P in
cre
as
e (
billi
ons
of U
S$) 380-690
2.0–3.7% 1.1–3.1% 0.8–1.7% 1.4–1.7% 0.9–1.4%
200-590
155-325
Energy Trade Big data Infrastructure Talent
REFORMAS ESTRUCTURALES
14 LATIN TRADE SEPTEMBER-OCTOBER 2013
BY JOHN PRICE
THE CONTRARIAN
Getting older and wealthier by the
day, Latin Americans increas-
ingly visit their pharmacy. Since 2008,
the region is by far the fastest grow-
ing pharmaceutical market in the
world. By 2017, Brazil will become
the fourth largest pharma market, be-
hind the U.S., China and Japan. But,
this impressive growth story is not a
victory for multinationals. Th e real
winners are Latin American generic
drug makers and locally owned retailers.
In the course of two decades, Latin Ameri-
can generics have evolved from a nuisance to
the international laboratories into the domi-
nant force in most medication categories. Th e
most accommodating market in the region is
Argentina. Patents were only fi rst legally rec-
ognized starting in 2000, so as a result, many
international drugs marketed there carry no
patent protection. Non-original drugs are
classifi ed as Biosimilars (not generics) and
thus do not require proof of bioequivalence.
Furthermore, data exclusivity, the most im-
portant step of protecting original formulas
in developed markets, is not even recognized
in Argentina. Argentina’s lax intellectual
property protection has enabled the generic
industry to thrive. Companies like Labo-
ratorios Raff o, Driburg, Grupo Bago and
Biosidus are some of the largest private sec-
tor employers in Argentina and the pride of
Kirchner administrations, under whose favor-
able regulatory regime they have expanded.
Former Brazilian health minister, Jose Serra
famously stood up to the international phar-
maceutical industry in the 1990s by criticizing
the lengthy patent protections of expensive
HIV drugs. After winning their showdown
with global pharma, Brazil began opening
the regulatory door to more generics. Th ough
considered more respectful of intellectual prop-
erty rights than Argentina, Brazil nonetheless
supports one of the world’s largest generic in-
dustries. EMS, Brazil’s largest drug laboratory,
began producing generics in 2000, and today
employs over 5,000 Brazilians and exports
generics to 40 plus countries. Even Mexico,
bound by the rigors of Nafta, has developed an
impressive homegrown generics industry.
Generics can be as much as 70 percent
cheaper than original drugs. Since medical
prescriptions in Latin American countries
must only list the medical name and not the
brand name, pharmacists tend to recommend PH
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generics. In spite of their aff ordability, generics
are mindful to incorporate a healthy margin for
pharmacy retailers into their pricing structure.
Th e accessible prices of generics has helped
unleash consumer demand for pharmaceuti-
cals. Rising incomes and an aging population
further bolsters medication volumes. Th e phar-
macy retail sector is quickly evolving to meet
demand. Chile was the fi rst to modernize and
consolidate its pharmacies. Farmacias Ahu-
mada S.A. (Fasa), based in Santiago, is the larg-
est drugstore chain in Latin America and one
of the largest in the world in number of outlets,
with a network of nearly 1,000 pharmacies in
Chile, Peru, Brazil, and Mexico.
Consolidation is underway in other markets,
most evidently in Brazil and Mexico where
independents are losing ground to well-lit large
size pharmacy chain stores modeled after U.S.
and UK equivalents where a high percentage of
sales come from OTC and non-medical re-
lated items. In Mexico and Brazil, the
larger pharmacy chains are striving to
stay ahead of the process and prevent
foreign competitors from entering.
Th e greatest threat to pharmacy chains
comes from non-medical retailers like
Walmart, who mastered the pharma
product category in its U.S. stores and
now sells more than 250 generics in its
Mexican outlets. Almost one fourth
of all pharmaceutical sales in Mexico
today go through non-medical retailers
including Superama, and Soriana, two of the
largest supermarket chains.
Latin America’s $100 billion pharmaceu-
tical industry is today dominated by Latin
American fi rms. Brazilian, Argentine and
Cuban generics producers already export
their goods to other emerging markets in
Asia, Africa and the mid-East. It may not be
long before Latin American pharmacy giants
do the same. Perhaps then, the multinational
players will fi nally act upon the opportunities
south of the Rio Grande.
LATIN AMERICA’S
BOOMING PHARMA INDUSTRY IS A LOCAL AFFAIR
John Price is
the managing
director of
Americas Market
Intelligence and a
20-year veteran of
Latin American
competitive
intelligence and strategy consulting.
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
80,00070,00060,00050,00040,00030,00020,00010,000
0
Brazil Mexico
PHARMACEUTICAL SALES (USD millions)
Colombia
OIL AND GAS: PDVSA
16 LATIN TRADE SEPTEMBER-OCTOBER 2013
BY ELIDA BUSTOS
AGRIBUSINESS: OLIVES
With more than 247,000 acres planted, Argentina is the leading
Latin American producer and exporter of table olives and olive
oil, and it occupies a prominent place in the international market,
where Spain and Italy are the biggest producers. According to the lat-
est data compiled by the Madrid-based International Olive Council
(IOC), Argentina is in eighth place worldwide as a producer of table
olives and in tenth place in olive oil. It exports 90 percent of its table
olives and 80 percent of its olive oil production.
“Th e sector has seen extraordinary growth in Argentina since 2000,
when it launched a diversifi cation program that expanded the area
planted from 74,000 acres to today’s 250,000 acres,” Maria Eugenia
Gallego, an agricultural engineering researcher in olive culture for the
Federal Investment Council based in Buenos Aires, told Latin Trade.
In the provinces of La Rioja, San Juan and Catamarca in the coun-
try’s northeast, growers have taken advantage of policies promoting its
cultivation, and today have fi rst-class processing plants which produce
extra virgin oils of the fi nest quality. Th ese oils have even won awards at
international competitions.
Argentina consumed 5,500 tons of olive oil during the crop year
2010/2011 and produced 20,000 tons. It’s estimated that it produced
32,000 tons last year.
Other Latin American regions are also increasing production.
Jean-Luis Barjol, executive director of the IOC, told Latin Trade,
“Although some countries have not started producing yet, they will
in the near future.” For the French-born executive, the strength of
“producer countries like Argentina, Chile, Uruguay and Peru is their
high production and the expectation of growth; their weakness is
low internal consumption.”
TO EXPORTChile and Uruguay have plantings but above all, international ambi-
tions. “We want exports of olive oil to rise to about $100 million by
2015, which means deliveries of 25,000 tons of extra virgin olive oil,”
the general director of ChileOliva, Gabriela Moglia, told the daily pub-
lication Estrategia a few months ago. Last year, their exports totaled
$24 million, or 6,714 tons.
Th e International Olive Council says, “Chile has lower production
than Argentina, and until recently, cultivation of olives was more tra-
ditional, extensive and of low productivity.” But since the end of the
1990s, it has gained momentum and today, there are about 15,000 acres
in production and 49,000 more planted and maturing. An olive tree
needs about ten years before it starts producing economically. Chilean
producers are betting on being able to off er an oil of high enough qual-
ity to compete in the most discriminating markets.
As for Uruguay, Barjol of the IOC says that “since the end of the
1990s they have increased their interest in this product and the area
planted to olives has increased considerably.” Uruguay has 22,000 acres
under cultivation, most of which has not yet started to produce.
Th e IOC also says other South American countries such as Ven-
ezuela and Peru and others “have increased their consumption of olive
oil and table olives in the last few years.” In Peru, consumption of table
olives increased form 14 tons in 1990 to 50 tons in 2011, while in
Brazil, which is not a producer, olive oil consumption ballooned from
13,500 tons in 1990 to 61,500 tons in 2011. Th e IOC projects that it
will surpass 70,000 tons in 2012/13.
In Argentina, Gallego thinks the next stage of development of the
sector will be increased mechanization of the harvest. Th is will be cru-
cial to make up for the steady reduction of available workers, and there
already is a made-in-Argentina harvester in operation. Th e researcher
says that improved access to education for low-income people means
they have gone on to jobs requiring higher qualifi cations, and this has
resulted in fewer people available for the harvest. Another reason for
the decline in the number of foreign migrant workers from neighbor-
ing countries is the dollar trap. Th ese workers can no longer be paid in
dollars due to the restrictions imposed by the Argentine government.
And, as with so many other food products, China is also waking
up. Th e China Daily recently reported that imports of olive oil will
increase from 32,000 tons in 2011 to 160,000 by 2015. It’s yet another
source of income for Latin American exporters.
And so it is that olive oil is moving from being a gourmet experience
to making space for itself in supermarket shopping carts.
Elida Bustos reported from Buenos Aires.
Some 500 years after olives
were introduced by the Spanish
conquistadors, olive production off ers
good potential for South American
farm producers.
NEW AMERICAN FRUIT
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REFORMAS ESTRUCTURALES
18 LATIN TRADE SEPTEMBER-OCTOBER 2013
BY RUTH MORRIS
BEVERAGES: CHINESE MARKET
China has already developed a taste for
French wine and Scotch whisky. Now,
Mexico is asking the Middle Kingdom to give
tequila a shot.
During his June visit to Mexico, Chinese
President Xi Jinping signed a trade deal that
lifted restrictions on imports of Mexico’s fi n-
est, 100 percent blue agave tequila. Along with
eff orts to boost Mexican pork shipments, the
agreement strives to narrow a yawning trade
gap that favors China 10 to 1 and represents
the worst trade imbalance in Latin America.
If all goes according to plan, distillers will be
the big winners, and some already have boots
on the ground.
“We’re thinking tequila can easily become
one of the biggest and most expensive imports
into China, in spirits,” said William Jarod
Webb, Asia fi eld support director for Dos Lu-
nas Spirits, LLC.
Webb boarded a plane to China two weeks
before President Jinping arrived in Mexico. Th e
game plan, he said, is to be the fi rst horse out
of the gate, and to replicate the success of fi ne
cognac – China’s No. 1 imported liquor and a
favorite among China’s well-healed and emer-
gent professionals.
“Tequila has an oaky, caramel fl avor, similar
to a fi ne cognac,” Webb said. “We think we can
start importing in the next three months.”
Mexico’s national tequila industry chamber
forecasts exports to China will catch fi re, hit-
ting 2.6 million gallons of superior quality
tequila in fi ve years. Th at would make China
its second largest market for 100 percent agave
tequila after the United States, which imports
about 13.7 million gallons a year.
China eff ectively banned 100 percent agave
tequilas in 2008 as part of a sweeping move to
crack down on fake alcohol with toxic levels
of methanol. Premium tequilas had methanol
levels slightly above China’s cut-off , due to
their high agave content.
Francisco Soltero Jimenez, the Tequila
Chamber’s director, said China now represents
the most dynamic new market open to tequila
producers. “For Mexico, tequila is not just a
national spirit,” Soltero said. “It’s also a product
that has shown in diff erent markets that Mexi-
co can make products of very high quality. Th at
means for the government, tequila is more than
a revenue generator. It has a symbolic value of
what the Mexican economy can be.”
Distillers have their work cut out for them.
Although China never banned lower agave
tequilas—known as mixtos— imports have
Will tequila exports to China catch fi re? According to forecasts, it
could become the second largest market after the United States.
THE PROMISED LAND
“We’re thinking tequila can easily become one of the biggest and most expensive imports into China, in spirits.”
PH
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been slim, to the tune of 108,000 gallons last
year. Tequila is relatively unknown here.
Th e chamber plans to familiarize Chinese
consumers with “sangritas” and “margaritas”
through tastings later this year, and by placing
bottles in prestigious clubs and restaurants.
Distillers also will have to contend with the
lofty import taxes China slaps on luxury items.
Webb, at Dos Lunas, estimated a bottle of the
company’s reposado tequila, aged in oak barrels,
would cost between $80 and $100 in China,
about double U.S. prices. Th e distiller will even-
tually make its grand reserve bottles available
in China too. Aged over 10 years in Spanish
cherry wood barrels, its grand reserve tequila
sells for $2,500 a bottle in the United States.
On the other hand, Webb said limited sup-
ply would work to distillers’ advantage. By law,
tequila can only be produced from agave grown
in Jalisco and a few regions in other Mexican
states. Th e grains that go into other spirits are
easier to come by. Dos Lunas is a U.S.-owned
company, but its tequilas are distilled and
bottled in Mexico.
Another advantage, according to Soltero, is
tequila’s versatility. Distillers will likely begin
by targeting China’s status-conscious snifter
set. “Th e United States has shown us that the
tequila sector that has been growing the fastest
is the high-end,” he said.
But, tequila can also be downed in a shot
glass, the way Chinese drinkers consume their
favorite homegrown spirit, baijiu. Or, it can be
mixed. Soltero said early research suggests te-
quila might even go nicely with green tea.
“What we have to do for these (export)
fi gures to become a reality is work very hard
in the market,” he said, “because 1.3 billion
consumers have to get to know the drink.
Th ey have to see it… they have to try it.”
Ruth Morris reported from Shanghai.
Chinese President Xi Jinping shakes hands with Mexican President Enrique Pena Nieto during a joint press conference at the president’s offi cial residence, Los Pinos, in Mexico City.
William Jarod Webb, Asia fi eld support director, Dos Lunas Spirits, LLC.
Trademark of The Bank of Nova Scotia, used under licence (where applicable).
RegionalOffi ce
AIG701 Brickell Avenue, Suite 2300Miami, FL 33131
Main Tel: 786-777-7575
Argentina
La Meridional Compañía Argentina de Seguros S.A.Tte. General Juan D. Perón #646 Piso 4toBuenos Aires, Argentina C1038AAN
Main Tel: +5411 4909 7000
Aruba
Aruba AIG Insurance N.V.L.G. Smith Blvd. 160 Sun Plaza, Suite 202 Oranjestad, Aruba Dutch Caribbean
Main Tel: +297 582-5500
Brazil
AIG Seguros Brasil Rua Gomes de Carvalho, 1306 12th Floor Vila Olimpia - São Paulo - SPBrazil 04547-005
Main Tel: + 55 11 3809.2200
Chile
AIG Chile Compañía de Seguros Generales S.A.Agustinas 640, 8, 9 and 21st Floor Santiago Chile, Chile
Main Tel: 56-2-2826 8000
Colombia
AIG Seguros Colombia S.A.Calle 78 No. 9-57 1st Floor Bogotá, Colombia
Main Tel: +57 (1) 313 8700
Ecuador
AIG Metropolitana Compañíade Seguros y Reaseguros S.A.Ave. Brasil #293 y Antonio Granda Centeno Edif. IACA, 5th Floor Quito – Ecuador
Main Tel: 5932 3955 000
El Salvador
AIG Seguros, El Salvador, S.A.Calle Loma Linda No. 265 Col. San Benito San Salvador, El Salvador
Main Tel: 503+2250-3200
Guatemala
AIG Seguros Guatemala, S.A.7a. Avenida 12-23 Zona 9 Edifi cio Etisa, Level 3rd Guatemala, Guatemala 01009
Main Tel: 0050222855900
Honduras
Chartis Seguros Guatemala, S.A., Sucursal HondurasCo. Edifi cios Los Castaños, 4th Floor Boulevard Morazan Teguzigalpa, Honduras
Main Tel: 0050422028300
Jamaica
Chartis Jamaica Insurance Company LimitedThe Towers, 5th Floor, 25 Dominica DriveKingston, 5 Jamaica, West Indies
Main Tel: 876-926-2074
Mexico
AIG Seguros Mexico S.A. de C.V.Ave. Insurgentes Sur, #1136 Col. del Valle D.F, Mexico 03219
Main Tel: +52 55 5488-4700
Panama
AIG Seguros PanamaEdifi cio Torre de las Americas Mezanine APunta Pacifi ca, San Francisco Panama, 0816-07854
Main Tel: +507 302-5010
Puerto Rico
AIG Insurance Company - Puerto Rico250 Muñoz Rivera AvenueSuite 500Hato Rey, PR 00918
Main Tel: 787-767-6400
UruguayAIG Seguros Uruguay S.A.Colonia 999 Montevideo, 11100 Uruguay
Main Tel: +598 2 900-0330
Venezuela
C.A. de Seguros American InternationalAv. Principal La Castellana con calle BlandinTorre Digitel, Piso 7 y 14, ofi cina 7C;14A Y 14BUrb. La Castellana, Caracas, Venezuela
Main Tel: +58212-3188400/+58212-3188401
Tell us about AIG and your position in the Latin America market?
We are very proud of our history in Latin America and the Caribbean and are particularly excited about being a part of its future. We have over 75 years in the region and have an established and growing position in that market. We have the advantage of AIG’s geographical reach, service capabilities and expertise which today serves over 88 million commercial, institutional, and individual customers—that is truly unmatched in the insurance industry. In Latin America and the Caribbean we have operations in 15 countries with underwriting, claims and loss control profes-sionals on the ground.
Tell us about AIG’s product portfolio and some of the areas you are focusing on?
In Commercial insurance we provide insurance so-lutions to small, mid-sized and large companies, “multilatinas”, entrepreneurs, and non-profi t organi-zations. Our product offering encompass both tra-ditional product types— including casualty, proper-ty/energy, and fi nancial lines—and highly special-ized ones such as marine, environmental, surety and trade credit. For individuals and families our prod-uct offerings span accident and health insurance, specialty coverages for high net-worth individuals, as well as homeowners and auto coverage. One of the emerging areas where we are innovating is protection against cyber risks with a comprehen-sive solution to help businesses safeguard against sensitive data breaches, computer hacking, dump-ster diving, computer viruses, employee sabotage or error, pilferage of information, and identity theft. Finally, we are leveraging AIG’s marketing leadership in the aviation business and are now
bringing our aviation expertise and decision mak-ing authority to Latin America and the Caribbean, which provides a value proposition for a region historically served by foreign markets.
As Latin American businesses are expand-ing their global footprint and need insurance programs to cover their risks, are you pre-pared to meet this demand?
As market needs evolve, so do our offerings and we provide local and global policies and Con-trolled Master Programs (CMPs) giving businesses the confi dence they need to conduct business across borders. Whatever the policy choice we work closely with our customers to ensure the so-lution matches their risk profi le, preferences, and business operations. And they can rest assured we help with the placement of locally compliant cover-age that is in line with the indigenous culture and business practices.
When you view the Latin America region what countries are you focusing on?
We are particularly optimistic about Brazil, Colom-bia and Mexico which are designated as part of our Strategic Business Expansion Plan. However, we see signifi cant opportunities in a number of other countries including Chile, Ecuador, Panama and Venezuela. What’s your outlook for the Latin America region and what are the main challenges and opportunities you foresee?
We are very optimistic as Latin America includes some of the fastest growing economies in the world. There are challenges caused by disparate economic, political and regulatory environments; high distribution costs and an uninformed insurance market. On the other hand, there are signifi cant op-portunities with a growing middle class, increasing disposable income, small and medium enterprise expansion and infrastructure spending—leading to rising demand for insurance products. With the 2014 World Cup and the 2016 Olympics both in Brazil we also expect to see increased demand in construction and property businesses, as well as prospects in marine and cargo, and accident & health coverages. Due to our long history of product innovation, market-leading claims and loss prevention expertise, and ongoing investments in technology and human capital, AIG in Latin Amer-ica and the Caribbean is very well positioned to capitalize on the positive trends in the region.
A conversation with James W. Dwane, President and Chief Executive Offi cer of Latin America and the Caribbean for American International Group’s (AIG) property casualty business.
SPECIAL ADVERTISING FEATURE
SECURING LATIN AMERICA’S FUTURE
BRAVO BUSINESS
AWARDS 2013
Over the last twenty years, Latin Trade has recognized excellence in leadership in government, business and social entrepreneurship in Latin America with the
BRAVO Business Awards. The pages of this magazine have consistently paid homage to the winners, who have helped produce deep and permanent change in the region. This year, the tradition lives on. This year’s awardees are leaders of change.
The president of Guatemala, Otto Perez Molina; the CEO of Petrobras, Maria das Graças Silva Foster; the CEO of the Mexican group Alfa, Alvaro Fernandez; the CEO of Brazilian Synergy Group, German Efromovich; the CEO of power generator Enersis, Ignacio Antoñanzas; the CEO of Brazilian retail group Pão de Açucar, Eneas Pestana; Goodyear; the president of Caribbean Craft, Magalie Dresse and the co-founder of Rede Sustentabilidade, Marina Silva.
These are leaders with a common trait: they want to make their mark in the world by doing things right. The pages that follow showcase their merits and their achievements.
THE WINNERS,UNDISPUTED REGIONAL LEADERS
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26 LATIN TRADE SEPTEMBER-OCTOBER 2013
OTTO PEREZ MOLINA PRESIDENT OF GUATEMALA
LEADER OF THE YEAR
SEPTEMBER-OCTOBER 2013 LATIN TRADE 27
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AWARDS 2013
Guatemala’s president, Otto Perez
Molina, believes that his main
achievement is to have motivated his fel-
low Guatemalans to make an effort to
change their country. It is not a minor
accomplishment. After all, the nation still
has many scars and open wounds left by
the civil war that lasted 36 years and that
ended only 17 years ago, following a peace
agreement signed between four represen-
tatives from the guerrillas and the govern-
ment, including Perez Molina himself.
“We want to look ahead. Let us not
remain entangled by ideological differenc-
es. Let us have the fight against extreme
poverty and the defeat of hunger as our
single ideology,” he said in a conversation
with Latin Trade.
At the same time, he points out that
his biggest challenge is to achieve “a safer
Guatemala.” In fact, this was one of the
main bids of the campaign that took him
to the presidency.
He believes that fighting criminals
requires various fronts. One of them,
he states, is to have strong institutions,
particularly, a well-equipped police force.
This is why President Perez Molina will
increase the number of policemen by
10,000, and his government is already
training officers and agents in specialized
schools. In addition to this, he underlines
the need to strengthen the judiciary.
President Perez would like to be
remembered for having built the insti-
tutional foundations to achieve higher
public security in Guatemala, as well as
for having given higher priority to the
hunger-eradication policy, under his Zero
Hunger Pact. He believes that this is such
an important task that it will be contin-
ued by any of his successors. He estimates
that these two pillars will speed up the
country’s path to development.
Yet, there are other topics that are
capturing the president’s energy and
attention. Education is one of the most
important. The government just estab-
lished a plan that will eliminate illiteracy
from various towns and provinces. Out
of the 334 municipalities in the country,
20 are already illiteracy-free, and 10 more
aim to become so before the end of this
year. It is expected that two out of a total
of 22 provinces become fully literate this
year. It is not an easy task, but it is being
done with the standards monitored by
Unicef, explained President Perez. He
also highlighted the importance of the
program to educate teachers. “This is the
beginning of everything. (The program)
goes forth and has no turning back,” he
emphatically said.
Attracting foreign investors is a task
on his personal agenda too. Local busi-
ness leaders join him on his international
trips just to make it clear that the interest
to develop Guatemala is equally shared
by the government and private sec-
tor. Foreign direct investment soared at
unprecedented rates in 2011 and 2012.
Disciplined and formal, the 63-year old
Perez Molina, although retired, is a sol-
dier to the bones. He graduated from the
military academy in his country in 1973,
got a master’s degree in international
relations from the Francisco Marroquin
university in Guatemala, and studied at
the Inter-American Defense College in
Washington D.C.
Nowadays, in the presidency, his
tone has a different hue. He changed
the leadership style he deployed during
his 30-year military career, in which he
achieved the rank of general. “It is not an
authoritarian leadership, but one by exam-
ple and conviction,” he says using just that
style. Anyhow, he acknowledges that his
military experience allowed him to devel-
op that characteristic to the maximum.
“There is competition for leadership and
recognition for leaders in the academy.”
Otto Perez Molina has four basic life
principles. He practices and passes them
on to his two children. “I do my best effort
so that not only they hear them, but see
the example.” The first, he says, “is the
value of the name. Honesty and sincerity
are basic principles I recommend to my
children. Honesty is priceless.” The second
one is modesty. “You must have your feet
on the ground. You have to be humble,
simple,” he points out, while affirming that
this is achieved by being a good listener.
The third one, he adds, “is the constant
fight to reach goals. Nothing comes as a
gift, for free.” The fourth basic principle
that guides his job is family unity.
Guatemala’s president, Otto Perez
Molina, believes that in addition to these
principles, his love for his country and
his spirit of service are qualities that
have helped him the most in his career.
Perhaps, it is now time to also add to his
capacity to innovate and design new ways
to resolve his country’s problems.
Santiago Gutierrez reported from Miami.
OTTO PEREZ MOLINA Committed to development
BY SANTIAGO GUTIERREZ
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28 LATIN TRADE SEPTEMBER-OCTOBER 2013
MARIA DAS GRAÇAS SILVA FOSTERCEO, PETROBRAS
LIFETIME ACHIEVEMENT
SEPTEMBER-OCTOBER 2013 LATIN TRADE 29
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AWARDS 2013
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Petrobras finds itself in more troubled
waters these days than just five years
ago, when the discovery of deep-sea oil
finds inspired optimism. Nevertheless,
one thing remains sure: Maria das Graças
Silva Foster, the company’s CEO, will
address those difficulties head on. She has
never shied away from tough decisions
in the company where she has worked
for some 33 years. The executive speaks
frankly and forcefully about the challenges
Petrobras faces, including debt, falling
production, imports, and its mandate to
buy local.
Solutions might seem hard to come by,
but she seems best suited to find them:
not only because of her academic cre-
dentials and her long and diverse experi-
ence in the oil business, but because she
knows that achieving big goals does not
come easy.
Her path to the top of Petrobras – a
position that makes her the only female
CEO of a large oil company in the world
- underscores the value of education,
hard work and perseverance. Foster, who
lived part of her childhood in the Rio
de Janeiro favela (squatter settlement)
of Complexo Alemão, earned extra cash
in her childhood by reading and writing
letters for her neighbors. “I have always
worked to help support my mother and
my children and pay for my studies.
Willpower is everything for me. I was
never afraid of work,” she said in an inter-
view with Brazil’s O Globo, just after her
taking office.
Foster completed her education in Rio
de Janeiro’s public universities - whose
limited spots are coveted by students who
take rigorous entrance exams – first with
a degree in chemical engineering from the
Federal Fluminense University and later
with a master’s degree in chemical engi-
neering and graduate studies in nuclear
engineering at the Federal University of
Rio de Janeiro. She also earned an MBA
from the Fundação Getulio Vargas.
Having started as an intern in Petrobras
in 1978, Foster was hired as a chemical
engineer in 1981. Her ascension brought
her to the secretariat of petroleum, natural
gas, and renewable fuels of the Ministry
of Mines and Energy from 2003 to 2005.
She was appointed by president Dilma
Rousseff, who at the time was Luiz Inácio
Lula da Silva’s minister of mines and
energy. Foster first worked with Rousseff
in 1998, when the former managed a
pipeline project for natural gas from
Bolivia and Rousseff was an energy offi-
cial in the southern state of Rio Grande
do Sul. “I learned with President Dilma
Rousseff much of what I know. I am a
student of hers,” Foster told magazine Isto
É Dinheiro in a 2012 interview. She was
appointed CEO of Petrobras in January
2012.
Colleagues describe Foster as deeply
focused on project management and man-
aging costs. She addresses Petrobras’ woes
in a straightforward manner both with
the press and internally, which shows her
determination to confront the situation
“with transparency and discussion with
the whole administration,” a company
executive told Latin Trade.
In some ways, her trajectory to the
top of the industry was not much of a
surprise. Before her appointment, Silva
Foster was one of the most prominent
businesswomen in Latin America. In
2010, for instance, she had been selected
by the British daily, the Financial Times,
as one of the world’s 50 business women
on the rise.
Maria das Graças Silva Foster has a
reputation as a hard-driving boss who
demands results and sticks to deadlines.
She starts her day at 7:30 a.m. But she is
not a typical office manager and doesn’t
stand on ceremony. Often she will don a
jumpsuit, gloves and protective glasses and
personally inspect building sites. She also
believes that female CEOs tend to show
great sensibility in working with others.
“They more quickly detect the technical
needs of their collaborators,” she said in a
recent interview. Her loyalty to Petrobras
is seen almost as a religious devotion. “I
would die for Petrobras,” she has been
known to say in public.
Maria das Graças Silva Foster has a tre-
mendous challenge facing her in Petrobras.
But even a superficial review of the lifetime
achievements of this 2013 BRAVO Business
Award winner will assure one result: there
will be action. Serious, responsible, and cou-
rageous action.
Taylor Barnes reported from Rio de Janeiro,
Santiago Gutierrez from Miami.
MARIA DAS GRAÇAS SILVA FOSTER A tribute to action
BY TAYLOR BARNES AND SANTIAGO GUTIERREZ
30 LATIN TRADE SEPTEMBER-OCTOBER 2013
ÁLVARO FERNÁNDEZ GARZA CEO, ALFA
CEO OF THE YEAR
SEPTEMBER-OCTOBER 2013 LATIN TRADE 31
BRAVO BUSINESS
AWARDS 2013
Three years after economist and business
administrator Alvaro Fernandez Garza
became the head of the Mexico-based Alfa
Group, this conglomerate’s revenues and
assets have risen at an annual average rate of
22 percent and 13 percent - both measured
in U.S. dollar terms - whereas the operational
margin went from 7.6 percent to 8.1 percent.
However, these figures are only part of a story
of success. The group’s international presence
also grew. With 85 producing plants in 18
countries around the world, foreign sales went
from slightly over 50 percent of the total to
over 61 percent.
But there is more. Unquestionably, Alfa has
become a major player. Nowadays, one in every
four cars produced in the world has parts man-
ufactured by Nemak, Alfa’s automotive affili-
ate, which now is the world’s largest maker of
aluminum parts for engines. Furthermore, the
totality of the heads of engines for Porsche
and Audi are made by Nemak. As Alvaro
Fernandez says, this speaks to the company’s
world-class engineering and management.
Investors acknowledge the effect of these
changes on future revenues. The Monterrey-
based company’s stock price soared by nearly
80 percent over the past 12 months, and stock
market capitalization is currently around $15.2
billion.
Yet, the story was different in the past. Back
in the 80s, oil prices and the country’s difficul-
ties practically forced the group into bank-
ruptcy. “We do not forget that,” said Fernandez
in an interview while at his office, located
just next to Sierra Madre. They do not forget,
but they were able to put it in the past. They
achieved a fantastic recovery with the very
same team that survived the troubled times.
How do you manage to turnaround a busi-
ness in such way? Alvaro Fernandez’s formula
begins with two key elements: trust and open-
ness. Perhaps this has to do with his youth (he
was born in 1968) and with his character –
energetic, kind, and easygoing. Back in the 90s,
Alfa’s organizational structure had a reputation
for being very formal and hierarchical, and its
top management was believed to be virtually
unreachable. Fernandez’ arrival brought about a
cultural change, which is acknowledged by the
company’s 60,000 employees in 18 countries.
On the other hand, given the group’s
significant business diversification – pet-
rochemicals (through its affiliate Alpek),
aluminum automotive parts (Nemak), pro-
cessed foods (Sigma), telecommunications
(Alestra) and gas and oil (Newpek) – it is
very hard to become an absolute expert in
all fields. The senior executive acknowledges
that. Traditionally, he says, the corporate
office of a conglomerate closely manages its
companies. He prefers to ask the manage-
ment of each subsidiary what they need and
then, support them. “The notion in Mexico
is that the boss takes full control.” However,
Fernandez Garza sees his role as this: “gener-
ate enthusiasm and not to tell people what
to do ... we are trying to eliminate the ‘go,
do this’,” he says with humor. This is how he
achieved the deep cultural change that makes
employees cheerfully wake up and go to
work, just as they did in the 70s.
Reflecting this way of thinking, the majority
of affiliates has a board of directors, and soon
all of them will have one. “It will not take lon-
ger than 24 months,” he reveals.
There is another evidence of the change in
the way the group is being managed. “We had
an enormous planning team.” They asked for
reports and designed each company’s strategy.
Now, corporate planning has two people who
work more as facilitators, rather than “law
enforcers.”
The conglomerate’s CEO knows that he
can fully trust the executive team as many of
them have more than 30 years in the business
and, even more interesting, rotation has not
undermined their innovative spirit. “We have
none of the businesses that we had in the 70s.”
Albeit all these elements, he does not
believe that they have a management style to
export to the rest of the countries where they
operate. “There is not an ‘Alfa way’,” he says.
However, there are distinct characteristics.
Valuing diversity, for example, is one of them.
The management team includes Italians,
Germans, and Americans. “We have not
arrived to conquer,” he adds.
NEW PURCHASESAlvaro Fernandez is never away from the
frontline. He personally closed the Bar-S
acquisition, one of the most successful in
recent years. The Phoenix, Arizona-based
processed meats company was for sale and its
owner had discussed a deal with other buy-
ers. An owner-to-owner contract actually
facilitated the acquisition, without the need
for armies of lawyers and bankers. “We closed
with a handshake.” The result, Alfa increased
its Ebitda from $60 million to $90 million in
two years, albeit Bar-S operated with nearly
military-disciplined low costs.
Alfa is now aggressively hunting for new
deals. “We will not accept losing an opportu-
nity.” The CEO speaks of real estate; distribu-
tion networks in Latin America for Sigma;
and oil and gas, which will have a space fol-
lowing Mexico’s energy reform. There is a sort
of institutional caution that somehow cools-off
the process – the company is full of engineers
that only make decisions when their complex
models show good results. Alvaro Fernandez
believes that in the end, it is not wrong to
look at the models. If everything was done
by intuition, “we would be bankrupt,” he says.
In all, he would like to see faster speed in the
acquisitions.
Nevertheless, the hurry to buy does not
translate to results. Alfa’s shareholders do not
put pressure on companies to generate profit
in the short run. “We have invested heavily in
Nemak over the past 20 years, and this will be
the first year in which it will yield dividend,”
he remarks. Investment and perseverance are
the costs that must be assumed to become
market leaders.
This is Alfa’s moment. Maybe because in
order to lead its growth Alvaro Fernandez
Garza, CEO of the Year, has a clear motto
inherited from his grandfather: “With the feet
on the ground, and with the sight on the sky.”
Alfa’s signature? No doubt.
Santiago Gutierrez, special envoy to Monterrey.
ALVARO FERNANDEZ GARZA Sheer Monterrey power
BY SANTIAGO GUTIERREZ
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32 LATIN TRADE SEPTEMBER-OCTOBER 2013
GERMAN EFROMOVICHCEO, SYNERGY GROUP
INNOVATIVE CEO OF THE YEAR
SEPTEMBER-OCTOBER 2013 LATIN TRADE 33
BRAVO BUSINESS
AWARDS 2013GERMAN EFROMOVICH
Midas touch
BY SANTIAGO GUTIERREZ
German Efromovich obtained his first aircraft
as payment for a debt on inspection services
he did for oil companies in Brazil. A plane
could be an undesirable asset for a mid-sized
services company. However, the Bolivia-born
engineer, who also is a Brazilian and Colombian
citizen, discovered that the oil industry employ-
ees in the region had to travel 150 miles before
they could reach a heliport that served as cargo
point for platforms. He offered to transport
them and this is how Ocean Air was born.
Years later, this company acquired Avianca, in a
sort of David and Goliath deal.
Avianca, the world’s second oldest airline, had
filed for Chapter 11 in the United States and
was almost toxic, given its high losses and labor
problems. Continental, Taca and LanChile
had rejected buying it. Efromovich, who then
owned Ocean Air and some oil operations in
South America, made a bid in May of 2004.
Without due diligence on the airline, he offered
to pay up to $63 million and to assume a debt
of some $220 million on the condition that the
seller would be responsible for any contingency.
Besides, he would only invest the money that
the company required.
In December that year, with the company in
his hands and out of Chapter 11, he disbursed
the first $10 million. By then, however, the
company’s Ebitda had already gone up to $40
million. He did not have to put a single dollar
more. With an enthusiastic management style
that makes him approachable to people, the
owner of the small Brazilian airline achieved the
unthinkable: make Avianca fly. While in 2004,
Avianca’s revenue amounted to $700 million,
the revenue made by Avianca Holdings (which
was created after the merger with Salvadorian
airline Taca) went to $4.1 billion at the end of
2012. Over the same period, Ebitda rose from
$40 million to $700 million, and the number of
planes grew from 40 to 174. AviancaTaca trans-
ported 23 million passengers last year.
There are more achievements. He turned a
fleet of trucks that was literally dumped by an
oil company in which he was shareholder, into
the largest courier transporter in Colombia,
with revenues comparable to that of the subway
of Medellin (the second largest city in that
country).
It seems he has a magic touch. No doubt he
does. However, 18 hours of daily work are also
behind the business transformations he achieves.
What is different is the way he faces such hours.
“I say that I do not work a single second in my
life because I enjoy when I am working” he said
in an interview with Latin Trade.
Part of the magic lies in the pleasure he
derives from the contact with people and his
tremendous magnetism, which can be easily
confirmed by anyone talking to him for just a
few minutes. He enjoys to be surrounded by
people, and that makes his shipyard and airline
businesses his preferred ones. That also gives
him enough enthusiasm to, from time to time,
personally attend passengers at the Avianca
counter in any given airport at 5 in the morning.
German Efromovich attributes his ease
around people to three things: having assimi-
lated the warmth and cheerfulness of the
Brazilians, having learned the easiness and cour-
teousness of the Colombians, and having had a
nomad childhood and teenage years. The latter
due mostly to his position as son of immigrants.
“I was born in Bolivia, lived in Santiago, then in
Arica, and years later in Sao Paulo,” he explains.
His arrival to new cities, he says, forced him to
develop an extraordinary capability to adapt to
people in new environments.
Being very practical is yet another personal
trait that favors him in business. He refuses to
deploy legions of lawyers to deal with business
transactions. He did not hire a single one during
the negotiation phase for Avianca. He refrains
himself from hiring new consultants to manage
issues directly related to the heart of his busi-
nesses. “If I call someone to ask how I should
manage my business, then I am into some-
thing I do not know, I should not be there,” he
remarks. He would hire them for specific tasks
in which his team is not experienced or does
not have enough time to develop, but not to
opine on central aspects of his business. This is
a task he reserves for himself and his team. “If a
consultant is that good, he would be my com-
petitor, and we would never be discussing how
to manage my business,” he says half seriously,
half in jest. Consultants, he told in an interview
years ago, “look at your watch to tell you what
time it is.”
However, he hears his close ones, espe-
cially his friend and Synergy board member,
Alexander Bialer, his brother and partner, Jose
Efromovich, and Avianca’s CEO, Fabio Villegas
Ramirez. “I do not necessarily accept what they
tell me, but I am far from being convinced that
I own the truth or that only I know everything.
I have made a lot of mistakes.”
He admits to errors, such as having gotten
an option that he never exercised to buy a cargo
company in Brazil, or the early decision to make
Ocean Air fly twin-aisle aircrafts internationally.
“It was a hard hit. My mistake, totally. I did not
understand aviation business at the beginning.”
But he has no regrets. “If a man does not want
to make a mistake, he just needs to do nothing.”
Naturally, there have been lots of successes,
due in part to his great vision. He believes that
the world’s future is in agriculture and energy.
This is why Synergy is harvesting coffee, pine-
apple and palm oil in Colombia, and has oil
activities in Brazil, Ecuador and Colombia. He
thinks that Synergy will be more focused in 10
years. “We will sell some assets to concentrate in
those that please us strategically, both in profes-
sional and economical terms,” he says.
The sale of PetroRubiales (Pacifc Rubia-
les today, where he has a small interest) is an
example of a divestment in which he came out
at the right time. “A moment came in which
we did not have enough technology or capital.
They were giving us a good value for what we
had done until then and therefore it was the
moment to sell. We sold it well ... and the buyer
purchased it in good terms too.”
German Efromovich wants his journey in life
to transcend. “It should not be a simple journey,
without leaving a footprint.” Given his impres-
sive list of successes, he has not to worry about
that.
Santiago Gutierrez reported from Bogota PH
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IGNACIO ANTOÑANZAS CEO, ENERSIS
INTERNATIONAL CEO OF THE YEAR
SEPTEMBER-OCTOBER 2013 LATIN TRADE 35
BRAVO BUSINESS
AWARDS 2013
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Enersis, the Chile-based company
that ranks as one of the largest
private electric power suppliers in South
America, has seen exceptional growth in
recent years. Under Ignacio Antoñan-
zas, who took over as CEO in 2006, the
company has expanded its operations to
cover 14 million customers in five coun-
tries – Chile, Argentina, Brazil, Colombia
and Peru – and has reached over 15,000
megawatts of installed capacity, most of
which comes from hydroelectric plants.
To ensure its future growth, meet
growing demand and remain competitive
in the region,
Antoñanzas earlier this year announced
plans to invest more than $9 billion through
2017, which the company expects to fund
through its own internal cash flow.
Managing a multinational power com-
pany presents some special challenges.
“We’re talking about a company with a
presence in five countries, with several
business lines and it’s important to be
able to lead a multidisciplinary, multicul-
tural group and get the best out of every
one of our team members,” said Anto-
ñanzas, who earned a degree in mining
engineering with a major in energy and
fuels from the Universidad Politecnica de
Madrid (UPM) and began his profes-
sional career as a commodities trader.
Antoñanzas, who grew up in northern
Spain and learned about different cultures
during his international travels in the
commodities business, firmly believes
in defining achievable goals at Enersis,
setting a clear strategy and shunning con-
formity. “It’s very important for people
to feel that the responsibility for achiev-
ing our goals is individual, with respect
to their own work, and at the same time
that it is a collective responsibility,” he
said. “Because unless everyone is rowing
in the same direction, it ’s very difficult to
reach your goal.” People can’t wait around
for the CEO to make all the decisions.
“In Latin America, there is too much of
a hierarchy in corporate decision making.
Many people believe that the CEO has to
make the decision, and this slows down
companies, especially the big ones. The
boss is there to help his team and provide
them the means with which to make
decisions.”
The Enersis CEO, who started at
Endesa Spain in 1994, pointed out that
over the last seven years, his company
has been able to increase its operating
results by more than nine percent each
year. “I believe that it ’s been decisive that
our people feel that the transformation
of the company depends on them, and
that they can show their teams and the
shareholders that betting on Enersis was
worthwhile.” Endesa-Spain, the country’s
leading electric power company, controls
a majority of Enersis’ shares, while Italy’s
Enel owns 92 percent of Endesa-Spain.
As for Enersis’ future, Antoñanzas not-
ed that while it ’s easy to define goals, it ’s
not always easy to achieve them. Demand
for electric power is growing substan-
tially in the five countries where Enersis
operates, and the company currently has a
wide range of hydroelectric projects in the
pipeline, at different stages of develop-
ment, covering 12,000 megawatts of
additional capacity. It also has plans for
building a large, new transmission system
and a host of related projects.
“Nevertheless, acceptance by local com-
munities of each project is a slow process,
and the company logically has to make
a greater effort to explain the benefits of
each project and how we will minimize
their impact.” Delaying these projects will
cause customers to pay higher rates, since
new hydroelectric energy is more eco-
nomical than the current plants supplying
the region.
Enersis enjoys some important com-
petitive advantages, Antoñanzas said,
thanks to its diversified asset portfolio
spread throughout five countries, its pres-
ence in large urban markets, its diversified
mix of energy sources, with a clear focus
on hydro power, and a balanced reliance
on generation and distribution. In addi-
tion, the company counts on the support
of Enel/Endesa, their broad international
experience and their best practices, as well
as the advantage of enjoying joint pur-
chasing power for equipment and fuel.
Looking ahead, Antoñanzas said that
Enersis’ M&A activity will be concentrat-
ed in its current operating region but he
added that, since his company has become
the main investment vehicle for Enel and
Endesa in South America in conventional
energy, the group may also analyze new
investment opportunities in different
countries and different businesses.
Joseph Mann, Jr. reported from Miami.
IGNACIO ANTOÑANZAS Electricity for the region
BY JOSEPH MANN, JR.
36 LATIN TRADE SEPTEMBER-OCTOBER 2013
THE GOODYEAR TIRE & RUBBER COMPANY ACCEPTED BY JAIME SZULC, PRESIDENT, GOODYEAR, LATIN AMERICA REGION
TRADE AMERICAS BRAVO AWARD
SEPTEMBER-OCTOBER 2013 LATIN TRADE 37
BRAVO BUSINESS
AWARDS 2013THE GOODYEAR TIRE &
RUBBER COMPANY A reliable partner
BY DOMINIC PHILLIPS
Sometime around 2010, cheap Asian
imports began flooding the Latin
American tire market. Industries from
textiles to toys had already been hit by
Asian imports that did not have to with-
stand expensive taxes or salaries, and
which competed on price, and rarely on
quality.
Some companies took fright. Others
changed their retail strategies. For the
tire industry the numbers were alarm-
ing: from 2010 to 2012, the Brazilian tire
industry alone produced 4.6 million less
tires, according to the country’s National
Tire Industry Association (Associação
Nacional da Industria de Pneumaticos,
or ANIP). In 2012 alone, over 26 million
tires were imported to Brazil, while pro-
duction stood at 66 million. The coun-
try’s Chinese tire imports for four-wheel
vehicles went from 5.4 million units in
2009 to 12.9 million last year.
But, sometimes the smartest thing to
do during a market threat is to go back
to basics. This was the strategy Goodyear
adopted, said Latin America president
Jaime Szulc. The company focused on the
dealers, who had been with the company
for decades, and invested in that relation-
ship. “We are really getting closer to our
dealers as a way to win in the market
place,” said Szulc.
The Latin American tire market first
began changing a decade ago as new mass
merchandise and non-assisted points of
sale began to emerge – then came the
Asian imports. The move from a pro-
tected marketplace to one of cut-throat
competition pressed the company to try
new things, Szulc explained.
Their choice, training for their deal-
ers. “By doing that we are getting great
results,” said Szulc. Goodyear’s unit vol-
umes in the region increased four percent
in the second quarter of 2013 compared
to the same period a year ago – the
second consecutive quarter. Total Latin
America net sales in the second quarter
were $531 million, up three percent, and
$17 million, on the prior quarter. Operat-
ing income was up for the third quarter
in succession at $82 million. The com-
pany has turned a potential defeat into
victory.
Szulc has had a huge part on this turn-
around. A civil engineer from the Uni-
versity of São Paulo, he served as senior
vice president and global chief marketing
officer for Levi Strauss and previously,
as worldwide COO for Eastman Kodak’s
consumer business. He joined Good-
year as president of the Latin American
region in September 2010.
Szulc switched the focus at Goodyear
to innovation. From December 2011
to July 2012, the company conducted
a full review of the business. “We did
a huge benchmarking work,” he states.
They hired consultants and conducted
internal benchmarking using all the data
they could get their hands on. They also
listened closer to consumers. “We did
continuous and ad hoc consumer research
to really map their needs and guide our
efforts towards growth,” said Szulc.
This research led towards the need to
focus on Goodyear’s dealers in the region
– many of whom had been working with
the company for decades, starting out
as small tire workshops, graduating to
bigger stores, often staying hands in the
same family. “Our brand equity in the
region is very strong. We believe one of
the main reasons we are a leader in Latin
America is because of the support of our
dealers,” said Szulc.
In September and October 2012,
Goodyear went on a road-show to visit
dealers across Brazil, training 200 people
on the results. Another 15 people from
top dealerships were taken on a visit to
the company’s factory in Americana to
see how a $240 million investment was
being spent. In June this year, 350 deal-
ers, re-treaders and Goodyear associates
attended a sales meeting, and a European
benchmarking trip is planned for execu-
tives and key dealers.
Through this, the Goodyear brand has
re-established itself as the safe and reli-
able choice in a region whose roads are
often a liability and where price is always
a primary concern, even for struggling
middle class consumers. This has been
done by making sure local dealers team-
up with the company – because who bet-
ter to sell their tires, than somebody who
really knows their customers?
For Jaime Szulc, the key figure in this
successful turnaround, is the replacement
business – which was up nine percent
in the second quarter of 2013 compared
to the second quarter of 2012. “This is
down to the reputation of the brand,”
he said. “If you buy a Goodyear tire, it
is really the most trusted tire in Latin
America, and that equity will retain
through the people who represent us in
the market place.”
Dom Phillips reported from Rio de Janeiro.PH
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38 LATIN TRADE SEPTEMBER-OCTOBER 2013
MAGALIE DRESSEPRESIDENT, CARIBBEAN CRAFT
INNOVATIVE
SOCIAL SUSTAINABILITY
SEPTEMBER-OCTOBER 2013 LATIN TRADE 39
BRAVO BUSINESS
AWARDS 2013
When Magalie Dresse bought control
of Caribbean Craft in 2006, the
small Haitian crafts company was in deep
trouble. The firm based in Port-au-Prince,
and originally founded in 1990, had a size-
able debt and needed to develop new mar-
kets for its products and new designs.
Dresse, who was born in Haiti and
earned a degree in industrial engineering
there, was working in New York City at the
time and studying for a master’s degree. “I
was not planning to return to Haiti,” says
Dresse, 38, “but I thought the company
offered an opportunity to help people in
Haiti by creating jobs and using their cre-
ative sprit to make crafts. I obtained a loan
from a family member, bought the com-
pany and became the owner and president.
I have no background in crafts but I love
this work.”
Working with Haitian and international
designers, Dresse developed new craft
designs and product lines made from recy-
cled materials. She and her husband, Joel,
worked hard to expand Caribbean Craft’s
foreign markets, going to trade shows and
finding more customers in the United
States, Canada and Europe. The company,
which produces a wide variety of crafts,
sells only to wholesalers and retail clients.
Big retailers account for about 80 percent
of Caribbean Craft’s sales.
Workers make brilliantly colored papier-
mâché animals, wall décor cut from old oil
drums, stone images and designs, artistic
license plates and others. The papier-mâché
products are the company’s most popular
line and are made from old cement bags.
“We try to use things that don’t have value
in the market and add value,” Dresse says.
Caribbean Craft began recovering
and expanding, and had about 500 direct
employees, when the 2010 earthquake dev-
astated Haiti, killing some 150,000 people
and destroying homes and other buildings
throughout the country.
Caribbean Craft’s headquarters near the
airport was ruined. Within a few weeks,
Dresse moved production to her home
and installed tents nearby so work could
continue. Dresse saw that her workers had
little or no access to food and water, so
she provided them with these basics at the
temporary workshop. Using her existing
client base, Dresse and her workers contin-
ued to produce, despite the extremely dif-
ficult conditions.
Today Caribbean Craft is a profit-
able enterprise with about 385 employ-
ees at three new locations in Haiti, as
well as independent contract workers.
Each employee supports eight or more
other Haitians. The company sells to
major retailers like Macy’s, West Elm,
Anthrpologie and Crate & Barrel.
Customers are located in the U.S., the
Caribbean and Canada, and Dresse is
developing new markets in Europe.
In 2010, despite the impact of the
January earthquake that year, Caribbean
Craft sold about 380,000 individual
items. In 2011, that figure rose to
415,000 and to 422,000 in 2012. “This
year we’ve seen a significant increase in
sales, due to new accounts, especially in
Canada,” Dresse noted.
She keeps in close contact with her cus-
tomers’ buyers and designers, “so we know
what colors and styles people are looking
for in the coming year.”
Demand is very strong but Dresse says
that the company must not grow too fast
to ensure quality products and its abil-
ity to deliver on time. The company has
grown by managing its own cash flow, and
by obtaining outside help. After the earth-
quake, Dresse was invited to participate in
the Clinton Global Initiative, where she
made contacts with potential customers.
Caribbean Craft has been visited by former
presidents, Clinton and Bush, as well as
TV personality Oprah Winfrey, and has
received considerable attention overseas.
In 2011, the Haiti Development Fund
announced a $415,000 investment in
Caribbean Craft to expand production
facilities and add new jobs.
The social role of Caribbean Craft is
critical to Dresse’s philosophy. Her employ-
ees earn far more than the minimum wage
and receive free food each day at a com-
pany cafeteria, as well as low-interest loans
from the company. Piece workers earn up
to $18 per day while papier-mâché employ-
ees average $13.50 per day, both of which
are good wages in Haiti.
Dresse’s progress has not been easy.
The company works in a country where
crime and personal security are constant
problems. For example, to prevent theft
of raw materials, Dresse wants to build a
fence around her headquarter building in
Port-au-Prince. But, this project has been
stopped due to threats from a local politi-
cian, she explains.
“Our challenges are not small,” Dresse
says. “We are part of a system that doesn’t
work, but that will not stop us from
working.”
Joseph A. Mann, Jr. reported from Miami.
MAGALIE DRESSE A crafter of development
BY JOSEPH A. MANN
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40 LATIN TRADE SEPTEMBER-OCTOBER 2013
MARINA SILVA, FORMER SENATOR OF BRAZIL AND DIRECTOROF THE INSTITUTE OF DEMOCRACY AND SUSTAINABILITY
DISTINGUISHED SERVICE IN
THE HEMISPHERE AWARD
SEPTEMBER-OCTOBER 2013 LATIN TRADE 41
BRAVO BUSINESS
AWARDS 2013
To get a taste of Marina Silva’s enormous
strength you only have to hear her speak.
You don’t need to know that she was born in
1958 in Rio Branco, the capital of the state
of Acre, on Brazil’s border with Peru. And
you don’t need to know either, that as a child
she lived in Breu Velho, 40 miles from Rio
Branco, on a plantation where her father was
a rubber harvester. That she was illiterate
until she was 16 years old, or that as a result
of the hard conditions of her life she had to
overcome hepatitis, malaria, and leishmaniasis
during that time.
But when you hear her speak it will be easy
to understand why she got a Master´s degree
in educational psychology, or why, at the age
of 36, she became the youngest member of
Congress in the entire history of Brazil, or
why she was Minister of the Environment
for five years during the government of Luiz
Inácio Lula, or why she captured almost 20
per cent of the votes in the election that raised
Dilma Rouseff to her party’s leadership. Or
why, conceivably, she will be a candidate for
President of Brazil in 2014.
It’s that the winner of the BRAVO Award
in the category of Distinguished Service in
the Hemisphere is the incarnation of a new
way of doing politics that she has been per-
fecting throughout her life. “I have a commit-
ment to the ideal of politics as service and not
as a way to get power,” she says. But this isn’t a
new conviction; it was forged and maintained
from the years when she was close to the
Liberation Theology of the 1970s.
She has also become the standard bearer
for preserving the environment. “Ever since I
was 17 years old I have worked for this cause
in the jungle villages, a very early process,”
she explained in an interview with Latin
Trade. Her arrival in Congress in October
1994 had a lot to do with the recognition
she had gained in the Amazonas region for
defending the environment.
She thinks that being a woman has been
more a point in her favor than an obstacle to
her political career. She never acknowledged the
discrimination, although she sees that it’s there
and that it’s very strong. Her family origins
could be the reason she doesn’t pay attention
to discrimination. Her father always showed
a deep respect for women. “Coming from a
humble family, he listened to the women. He
looked to my mother and my grandmother for
advice.” Her grandmothers were matriarchs,
and she lived with five sisters and just one
brother. “It was a woman’s universe. I never felt
diminished for being a woman.”
“I see clearly that being a woman became
a positive difference because I was involved in
some very difficult and dangerous struggles
in which few men had the courage to place
themselves. The differences I have are not
because I am a woman. They are differences
of perceiving the world and confronting it
without feeling victimized, while respecting
those with whom I disagreed.”
In 2003 she took on the post of environ-
ment minister with the aim of obtaining
better treatment of ecological issues in the
government. “Getting that across was very
difficult to achieve because the ministers see
their processes as being separate from the
environmental ones.”
A group within the government tried to
reverse a decree against the deforestation of
Amazonas, arguing that it went too far. As is
well known in Brazil, Marina Silva resigned
from her post. Her resignation produced a
citizen-based movement against revoking
the law, and in the end that popular backing
allowed President Lula to stand firm against
revoking it. The final result was that deforesta-
tion has been reduced by 80 percent, (in 2004,
6.7 million acres of forest were lost), and it has
been possible to preserve an area that saves
the world the equivalent of two billion tons
of CO2. That’s how Marina Silva shows the
strength she has behind her fragile appearance.
It’s enough to hear Marina speak. But
despite the fact that she recognizes and is
thankful for this gift of speaking, she thinks
that it’s a factor that is losing relevance. “To
choose leaders, what counts is life experience
and less what is said or how it is said.” Hers,
she says, isn’t a discourse but an experience.
Now she believes her task in govern-
ment will be to try a different approach to
environmental conservation. “Not from the
government for society but for government
with society. There isn’t the slightest pos-
sibility that the government can get results
without getting everyone together to make a
sustainable model. Sustainability isn’t a way
of doing things, it’s a way of being, a vision of
the world,” she says. For now, the vision of this
Brazilian is to be able to move her country
towards sustainability. If she achieves this goal,
even it in a small proportion, her life would be
meritorious.
Santiago Gutiérrez reported from Miami.
MARINA SILVA Lady in green
BY SANTIAGO GUTIÉRREZ
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ENÉAS PESTANA CEO, GRUPO PÃO DE AÇÚCAR
DYNAMIC CEO
OF THE YEAR
SEPTEMBER-OCTOBER 2013 LATIN TRADE 43
BRAVO BUSINESS
AWARDS 2013
Enéas Pestana gets on his multi-cylin-
der BMW motorcycle on weekends.
He goes, for example, to Poços de Caldas
in the neighboring state of Minas Gerais,
just over 100 kilometers from São Paulo.
Once he’s the road he has time to reflect
on his life, and the countryside and the
speed help him keep his emotional bal-
ance. It’s his way of relaxing after 12-hour
days as head of the second biggest retail
sales business in Latin America, the Pão
de Açúcar group.
This is one of his finest moments. One
of the company’s most difficult chapters
was brought to a close early in September.
Casino, the group’s biggest shareholder,
and the son of company founder Abilio
Diniz, signed an agreement to end a
conflict that had caused problems for the
company’s development.
At the low point of this dispute Enéas
made the decision that has won him the
respect of the entire Brazilian business
community. He told the shareholders that
his work would be to defend the company
and not individual stakeholders. “It wasn’t
easy, but I have always been focused on
the company, protecting the administra-
tors and the executives. I can say that I
was respected by the shareholders, and
that I have always been focused on the
business,” he says.
In the end, this attitude gave the com-
pany an important financial boost, and
now it seems that there’s only good news.
That’s largely because in the last three
and a half years, since Pestana became
the group’s president, the company
has changed profoundly. Before 2010,
Pão de Açúcar had been a more or less
conventional retailer with a network of
supermarkets and hypermarkets. Now
it’s also Brazil’s most important player in
furniture, electronics, home products and
e-commerce.
Maybe it changed so quickly because
Enéas Pestana isn’t a recent arrival in
the market or in the company. His retail
career began more than 18 years ago in
Carrefour Brazil. Then, after 2003 he
became the group’s CFO, and he moved
up to be president in 2010.
He brought new businesses to the com-
pany such as that of real estate, an activ-
ity in which Casino, the group’s biggest
shareholder, has had great success in other
countries. This business has an Ebitda
margin of 45 to 50 percent, he says, more
than four times higher than in trade,
where it’s about 12 percent.
He increased participation in the
sales segment even more with its Assaí
Atacadista house brand. They are now in
third place, after Atacadão (Carrefour)
and the Dutch company Makro, but
Eneas Pestana hopes to move up to num-
ber two in 2014.
He has also aggressively developed
the electronics business. In August Nova
Pontocom, the company’s e-commerce
affiliate, grew at an annual rate of nearly
60 percent, but more important, “without
burning through money. I have seen many
people increase their market share with
very negative results,” he says. The reason
for success is a combination of a good
pricing strategy and what Pestana calls
the best level of logistics service in Brazil.
Now they want to aggressively focus
on organic growth. He thinks there’s
room to improve its presence in the
northeast and central regions of Brazil.
As might be expected, the firm has no
plans to go international, since it has a
large investment in the French multi-
national Casino.
Throughout this process, the four
corporate values of Pão de Açúcar per-
meate everything: humility, emotional
balance, determination and discipline are
the pillars of conduct for the 150,000
people who work in the group, the largest
employer in Brazil. The same is true of
the companies that merge with it. “We do
not concede anything in the values,” he
says. “I hate stars. I prefer executives who
are capable of listening and working with
the people.”
The winner of the BRAVO Business
Prize to the Dynamic CEO of the year
is proud of his organization. “I love this
company,” he says unreservedly. In this
romance, the works and the results speak
of his affection.
Santiago Gutierrez reported from Miami.
ENÉAS PESTANA A man of values
BY SANTIAGO GUTIÉRREZ
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THE IDEAL HOTEL BRAND FOR the emerging class ofTRAVELERS IN LATIN AMERICA
SPECIAL ADVERTISING FEATURE
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San José, Costa Rica
Santo Domingo, Dominican Republic
Santiago, Chile
46 LATIN TRADE SEPTEMBER-OCTOBER 2013
BY SERGIO MANAUT
LAWYERS: IBERIAN ACTION
Garrigues moved its business and the Spanish American legal com-
munity felt a powerful shock. Th e most important law fi rm in Spain
and Europe announced that it has left its partnership with the Affi nitas
law fi rms – which itself created in 2004 – to go at it alone in the region.
Th is decision is encouraging the most important law fi rms on both sides
of the Atlantic to join the fi eld of battle. Th ere are many questions that
need answers, but one thing is certain: Latin America is the place to start,
and to strengthen in some cases, the internationalization of Spanish law
fi rms.
Garrigues exemplifi es this progressive process of internationalizing
law fi rms. “Th e idea was that through the alliance, Garrigues would in-
tegrate better with the Latin American member fi rms, but at the end of
the day, integration wasn’t possible. After talking it over for a long time
with the alliance members, Garrigues decided in May 2013 to leave Af-
fi nitas to establish itself in Latin America on its own, through its own
offi ces, and to contract local lawyers in several of the most important
countries in the region where the local legal consulting doesn’t encounter
regulatory obstacles.” Th at’s how Javier Ybañez Rubio explains it. Ybañez
Rubio is the managing partner for Garrigues in Latin America. Hav-
ing taken that step, its new stage begins with the opening of offi ces in
Colombia, Mexico and Peru, offi ces that will be added to those in Sao
Paulo, where it has been operating since 2011.
Ybañez Rubio poses the big question that faces law fi rms that intend
to enter Latin America: should they work with local partners or open
their own practices?
Th e largest Spanish law fi rm broke its ties with Latin American fi rms and went solo to conquer
legal business in the region. Th e rest of the top fi ve law fi rms in the Iberian Peninsula are following
suit. Here, their strategies.
THE SPANISH WAVE
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PROS AND CONSYbañez Rubio recognizes that the strategy of partnering didn’t work
out. “We think an alliance doesn’t resolve certain issues that concern us
and that are essential when we want to organize an offi ce with our own
strengths in the region, to be able to provide fi rst-class support for our
clients,” he says. “Issues such as quality control, the homogenization and
the consultancy, confl icts of interest and professional careers require a
presence controlled by ourselves, if we want to achieve an integrated and
coordinated practice in the region.”
In spite of that, he maintains that integration with a local fi rm makes
the road easier in that you don’t have to start from zero, and you start
with a structure attuned to working in the local market. “Nevertheless,”
he adds, “the integration of teams already formed in larger structures
also presents diffi culties which have particular features that are especially
complicated in the legal market.”
Th e law fi rm that could be said to be the pioneer in the region is
that of Uria Menendez, which established itself in Latin America
in 1998, arriving with its clients when it started up in the region.
Th e fi rm chose a mixed strategy, in which it has its own offi ces in
Mexico, Sao Paulo, Santiago de Chile, Lima and Buenos Aires, but
also, according to the managing partner for Latin America, Eduardo
Rodriguez-Rovira, “We maintain very direct relationships with fi rms
in other jurisdictions such as Colombia, Uruguay, and Venezuela,
and as well, we collaborate closely with the best law fi rms in each of
the jurisdictions in which we have our offi ces.”
OCTOBER 25, 2013 FOUR SEASONS HOTEL, MIAMI WWW.BRAVO.LATINTRADE.COM
48 LATIN TRADE SEPTEMBER-OCTOBER 2013
LAWYERS: IBERIAN ACTION
Cuatrecasas, the other giant in the legal market, rivals Garrigues
in size and strategy. Jaime Llopis, a partner in the fi rm and manag-
ing partner in Latin America, explains that the fi rm’s business model
consists of maintaining a special relationship with a large fi rm and
close relationships with a series of local practices. Th ey have, as Llopis
puts it, “a short list of friends.” Exactly what does that mean? “It’s very
important,” he replies, “to have a road map of the local market. If one
of our clients has a complex matter before him, we send it to a large
fi rm; if it’s a small matter, to the smaller ones, and in that way we do
excellent business at low cost.”
For Julio Veloso, the partner responsible for internationalizing Bro-
seta, there is neither a good nor a bad strategy. “One chooses what one
believes to be best for one’s fi rm. It’s also true that one can change the
strategy if it doesn’t bring the expected results, as Garrigues did,” he says.
More than a few of those who normally work in and around the Plaza
de Castilla, the seat of the Madrid Courts, have serious doubts about the
decision taken by Garrigues. In a low voice, they comment that opening
offi ces in the region could weaken the brand because, unless they make
a very important investment, these markets will cost them their place
among the top fi ve fi rms in Spain and Europe.
MORE CHALLENGESOne person who has no doubt about what awaits the Spanish fi rms
that have gone into Latin America is Borja Martinez-Echeverria, a
consulting partner in Perez + Partners. “Th e Spaniards are going to
have a hard time of it. Baker & McKenzie is very well established in
the region, and even its world executive president, Eduardo Leit, is
Brazilian. Th e English fi rm Norton Rose Fulbright went to Colombia.
Th e Anglo-American merger, DLA Piper, signed up former Span-
ish president, Jose Maria Aznar, as consultant for the region,” he said.
His partner, Miguel Angel de la Manga Falcon, holds that culture
and language don’t provide an advantage for the Spaniards, “because
the Latin American lawyers are trained in the United States, not in
Spain.” However, both of them emphasized that the strongest com-
petition will be from the local fi rms. “Th ey are ready to face them, and
not from a position of weakness. Th ey’ve been in a state of alert since
the Garrigues announcement,” he said.
He says that now begins the dance for signing up lawyers. “Th e
fi rms that win have to off er to the best and the brightest a seductive
career plan, while the local fi rms see that they have to do their best
to keep their talent. And this is precisely the measure that the Latin
Americans have to take. Th ey must off er a partnership and defi ne how
they are going to reward their new partners,” explains De la Manga
Falcon. Borja is even more graphic: “What we’re talking about is how
they’re going to share the pie.”
Latin American lawyers know that their Spanish colleagues are
not coming just to keep the national fi rms company, but to capture
local clients, with the added advantage that they can off er them
services in Europe.
“We think that at some moment the Latin American companies will
start to go to Spain. Th ere will be companies that have little or no inter-
national experience. We would act as if we were an external legal coun-
sel,” says Velosos. In the same vein, Rodriguez-Rovira says, “Th ere’s a
perception of an increase in Latin American investors investing in Spain
or Portugal, which would cover multilatinas as family offi ces.”
Th e arrival of Latin American companies could be for the long run.
Once there, the Spanish fi rms select target markets for their potential.
Ybañez explains why Colombia, Mexico and Peru are the sites chosen
for the fi rst phase of expansion: “Th ese countries are the ones that off er
the best opportunities for our activities, and in addition are the countries
our clients are thinking about. Th e decision was relatively easy, at least
for this fi rst phase. Th e sustained growth of their economies, the infra-
structure needs, the expected public and private investments, the good
prospects for mergers and acquisitions, the development of the fi nancial
markets in general, were very relevant to our decision.”
Sergio Manaut reported from Madrid. PH
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Javier Ybañez Rubio
Javier Ybañez Rubio, managing partner for Garrigues in Latin America
“We think an alliance doesn’t resolve certain issues that concern us and that are essential when we want to organize an offi ce with our own strengths in the region, to be able to provide fi rst-class support for our clients.”
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50 LATIN TRADE SEPTEMBER-OCTOBER 2013
BY PETER WILSON
OIL AND GAS: PDVSA
Pdvsa, the third-largest company in Latin America, is in trouble. Th e
state-owned company is facing a one-two punch: declining pro-
duction and growing fi nancial demands from Venezuela’s cash-starved
government.
“Th e cash fl ow that the government takes from Pdvsa is very high,”
says Lucas Aristizabal, an analyst with Fitch Ratings in Chicago. “Th at
includes the royalties, taxes, dividends, social programs and oil barter
agreements such as Petrocaribe and the Fondo Conjunto Chino-Vene-
zolano. When you add it all together, the cash fl ow from operations is
about negative.”
Th at’s hamstringing Pdvsa, which is trying to develop Venezuela’s oil
reserves, which at 297 million barrels are the world’s largest. Th e com-
pany is in the midst of an investment program intended to more than
double output to six million barrels of oil per day by 2019, by spending
$257 billion. Th e question is where the money will come from.
According to the company’s 2012 annual report, Pdvsa will fi nance
$208 billion of the investment splurge, with private partners supplying
the rest. “Pdvsa is going to be hard pressed to meet its investments. Th e
company just doesn’t have the money to pay its bills,” says Fernando San-
chez, vice president of the Society of Venezuelan Petroleum Engineers.
Pdvsa’s problem has been years in the making as the government has
used the company to fi nance its social programs, political objectives and
Th e government take is huge in Petroleos
de Venezuela, S.A (Pdvsa). When social
programs and oil barter agreements are
added up, the cash fl ow from operations
is nearly negative. Venezuela has the
world’s largest oil reserves, but Pdvsa
can’t grow production because there is no
room for needed investment.
THE UGLY TRUTH ABOUT
PDVSA
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electoral campaigns, including two presidential campaigns and
one gubernatorial election since October.
To gain more funds, the government has raised royalties,
income taxes and other payments on all oil companies. Like
others, Pdvsa has paid the price. Th e company paid $20 billion
in taxes, royalties and dividends last year, up from $19 billion
in 2011, and $13.7 billion in 2010. Taxes rose even though the
company’s revenue fell slightly to $124.5 billion last year, down
from $124.8 billion in 2011.
But that’s not all. Pdvsa’s contributions to social programs,
including a government housing project, totaled $9 billion
last year, down from $15.6 billion in 2011, but nearly double
the $5.3 billion in 2010. Contributions to Fonden, an opaque
government development fund that has been used to purchase
Russian fi ghter jets, totaled $8.5 billion last year, down from $14.5 billion
in 2011, but still nearly quadruple the $1.7 billion in 2010.
Pdvsa’s overall payments to the government were $47.5 billion last
year, just slightly down from $49.1 billion in 2011, but more than double
the $20.7 billion paid in 2010. Many analysts suspect that hundreds of
millions more were advanced off the books, especially in the two presi-
dential campaigns. “Pdvsa is the government’s golden goose,’’ says Risa
Grais-Targow, an analyst with Eurasia Group. “Oil is essential to the
government.”
OIL DIPLOMACYPdvsa has also underwritten the government’s foreign policy initiatives.
To curry favor with its neighbors, Venezuela has used oil to buy support.
Under the aegis of its Petrocaribe program, Venezuela sells or barters oil
to Caribbean, Central and South American countries off ering subsidized
fi nance. Members, who include Guyana, Haiti, Jamaica and the Domini-
can Republic, can defer payments for up to two years, while accessing
long-term fi nancing. Participating countries can also pay in goods and
services. Last year, Venezuela’s oil exports to the members rose 14 percent
to about 108,000 barrels per day (bbl/day), up from 95,000 bbl/day in
2011. Th ey are expected to rise another 10 percent this year. Petrocaribe
doesn’t include Cuba, which takes another 100,000 bbl/day in return for
thousands of Cuban doctors, teachers and other professionals working in
Venezuela.
But the chief culprit is China. In the last few years, China has ad-
A general view of the Venezuelan city Puerto La Cruz shows the smoke caused by a fi re in the government oil company Pdvsa in Venezuela on August 11, 2013.
52 LATIN TRADE SEPTEMBER-OCTOBER 2013
OIL AND GAS: PDVSA
vanced the Venezuelan government $36 billion in credits with repayment
being set in oil and petroleum products, chiefl y fuel oil. Venezuela has
already repaid $16 billion, according to Pdvsa President Rafael Ramirez,
who is also the country’s energy minister.
However, Venezuela is already seeking another $4 billion tranche. Th e
loans have been repeatedly criticized by opponents of Venezuelan Presi-
dent Nicolas Maduro, especially as terms have never been released. Many
suspect that the Venezuelan government is selling oil at a discount of up
to $5 a barrel to cover shipping costs.
Th e downside of loans to China, and other barter programs, is that
Pdvsa doesn’t receive any money from the sales, and must cover the pro-
duction costs. “Such deals make up about 700,000 bbl/day,’’ Aristizabal
says.
CHEAPER THAN WATERPdvsa faces another drain on its resources: Venezuela’s domestic market
where products are sold at a loss. Gasoline is one example. Raul Ro-
driguez, a government employee, can complain about many things in
Venezuela, but the price of gasoline isn’t one of them. Rodriguez fi lls up
the tank of his Volkswagen Golf for less than $0.50 for 10 gallons of fuel
each week. Th at’s about $0.01 per gallon at the black market rate. “Con-
sidering the prices of everything else, it’s ridiculous,’’ Rodriguez says. “I
spend less on gasoline than a liter of water costs, or a can of Pepsi.”
Cheap gasoline costs Pdvsa dearly. Since prices were frozen 17 years
ago, the subsidy has cost the oil giant $7.5 billion, according to some
analysts. However, there is a hidden toll as well. With gasoline so cheap,
there is no conservation.
Demand for gasoline has surged, as well as for fuel oil, especially as
the government builds new power plants intended to end power outages.
Th e plants will someday burn natural gas, but right now, Venezuela has a
shortage of the fuel even though it has the world’s eighth-largest reserves
of natural gas.
Given those two factors, Pdvsa estimates that domestic demand for
petroleum products will rise by 16 percent this year to about 790,000
bbl/day. Th at compares to 681,000 bbl/day in 2012, and 646,000 bbl/
day in 2011. Th ose fi gures are considered low by some analysts. When oil
from barter programs and domestic consumption are combined, about
1.5 million bbl/day of Pdvsa’s output isn’t being sold at international
prices.
If Pdvsa was growing its oil production, such giveaways wouldn’t hurt
the company’s fi nances so much. But, production is falling and Pdvsa
seems unable to grow it signifi cantly in the short term. Pdvsa claims that
its 2012 output averaged 3.03 million bbl/day and exports were 2.56 mil-
lion bbl/day. However, most analysts and the Organization of Petroleum
Exporting Countries (Opec) estimate output anywhere between 2.35
million bbl/day and 2.8 million bbl/day.
Most expect output to fall further this year. According to the Central
Bank of Venezuela, oil revenue dropped 13 percent to $21.3 billion for
the fi rst quarter of this year, down from $24.6 billion in the fi rst quarter
of 2012. Th e central bank said that the fall was caused by a 5.6 percent
drop in export volume, and a 7.2 percent drop in price.
INVESTORS WANTEDProduction from Pdvsa’s mature fi elds is falling in the face of the com-
pany’s fi nancial crunch. Many of the fi elds in the western state of Zulia
need to have fresh wells drilled every few years due to sediment and silt
buildup.
Indicative of the problems are the fi elds that Pdvsa seized in 2005
from private companies. Th e 32 fi elds were operated by private compa-
nies such as BP, Shell, Chevron and ExxonMobil, with the companies
being paid a per barrel fee. Th en President Hugo Chavez ordered that
the contracts be converted into joint ventures with Pdvsa holding at least
a 60 percent stake. Th e minority partners were supposed to receive divi-
dends to cover their investments and profi ts. At the time of their seizure,
The cost of producing one barrel of oil soared to $11.09 last year from $7.53 in 2011, as the company continues to add workers and take on non-energy responsibilities.
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Minister of Venezuelan oil and president of Petroleum of Venezuela (Pdvsa), Rafael Ramirez.
54 LATIN TRADE SEPTEMBER-OCTOBER 2013
OIL AND GAS: PDVSA
the fi elds were producing about 500,000 bbl/day. Since their conversion,
production has slipped, and last year it averaged 360,000 bbl/day.
“Th e fall isn’t surprising,’’ says Vera De Brito de Gyarfas, counsel with
international law fi rm King & Spalding, which advises oil companies.
“When Pdvsa took control of the fi elds, they didn’t have the personnel to
run them. Th e company was supposed to approve the new ventures’ busi-
ness plans each year. Th at hasn’t happened.”
Making matters worse is that Pdvsa doesn’t have the funds to cover its
share of the investments in the fi elds, most of which are mature fi elds lo-
cated in Lake Maracaibo. Th e company has also failed to make dividend
payments to its partners. “Pdvsa owes its partners about $10 billion, both
in dividends and to cover its own share of the investments,’’ says Sanchez.
Ramirez declined repeated requests for an interview.
Falling production in Pdvsa’s traditional fi elds hasn’t been made up by
the oft-promised, but oft-delayed, Faja, where the bulk of Venezuela’s oil
reserves lie. Th e Faja holds more than 257 billion barrels of recoverable
extra heavy crude that has the viscosity of peanut butter. However, the
crude must be upgraded to lighter blends before it can be refi ned. Th ere-
in lies the rub: few of Pdvsa’s partners want to invest the billions needed
to build upgraders. Without upgraders, development in the Faja will lag.
“Venezuela has the world’s largest oil reserves but Pdvsa can’t grow pro-
duction,’’ says Sanchez. “And that is their number one problem.”
Pdvsa has sought to raise funds from its partners. Th is year, the
company has fi nalized loan agreements with Chevron, China’s Cnpc
and Schlumberger for a combined $7.5 billion, with funds geared
toward increasing output. But even those moves have been criticized
by Pdvsa’s unions, who have repeatedly called for Ramirez’s removal,
especially due to a string of industrial accidents, including last Au-
gust’s fi re and explosion at the Amuay refi nery that claimed more
than 40 lives.
“Pdvsa has a double discourse,” says Jose Bodas, secretary general
of the Futpv, one of Pdvsa’s largest oil unions. “Th ey say they are sup-
porting the government’s socialist revolution with its anti-capitalistic,
anti-imperialistic line but what are they doing? Th ey are borrowing from
capitalists like Chevron, and Cnpc to fund their operations. “But if we
ask the company to honor the terms of the collective contract, they call
us counter-revolutionaries or imperialist lackeys. Pdvsa’s workers are the
worst paid in the industry now. And we don’t have the right to protest.
We don’t have the right to strike.”
Ramirez brushes aside such criticisms, saying that the company
remains on course to meet its goals and further Venezuela’s socialist
revolution that was started by Chavez and being continued by Maduro.
However, Pdvsa and the government may only be delaying the inevitable
by denying the inherent problems in the company’s balance sheet. Op-
erating costs soared last year with the cost of producing one barrel of oil
rising to $11.09 from $7.53 in 2011 as the company continues to add
workers and take on more non-energy responsibilities. “Pdvsa’s fi nancial
situation is unsustainable if they continue operating in the way that they
are without increasing production,” says Aristizabal.
Peter Wilson reported from Caracas.
“Pdvsa’s fi nancial situation is unsustainable if they continue operating in the way that they are without increasing production.”
Lucas Aristizabal, analyst, Fitch Ratings
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A general view of the Venezuelan state oil refi nery (Pdvsa) in Puerto La Cruz, Venezuela.
56 LATIN TRADE SEPTEMBER-OCTOBER 2013
BY DAVID RAMIREZ
PRIVATE BANKING: PHILANTHROPY
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Private bankers are thinking more about how to assign part of the money from their high net worth clients to foundations.
THE ALTRUISTIC ANGLE
A few years ago Mexican tycoon
Carlos Slim caused a stir when he
declared that “poverty can’t be solved
with donations,” a comment that angered
many coming from “the richest man in
the world.” However, what Slim meant
to express was his skepticism for phi-
lanthropy without goals, something he
continues to believe to this day.
The magnate thinks that indiscrimi-
nate donations are not sufficient alone.
Rather, they need to be focused on con-
crete projects where they can be followed
up on.
Slim’s thoughts are still valid, as we see
in the growing trend toward corporate
social responsibility (CSR) and philan-
thropy. Although philanthropic activities
are as old as time, day by day, billionaires
like Slim, Bill Gates, George Soros and
Warren Buffet, just to name a few, are
SEPTEMBER-OCTOBER 2013 LATIN TRADE 57
PRIVATE BANKING: PHILANTHROPY
doing philanthropy in a more organized
way, which includes formal consultations
withtheir private bankers or lawyers as
part of their overall strategies of invest-
ment or estate planning.
In fact, according to the 2012 Bank
of America Study of High Net Worth
Philanthropy, carried out by the Bank of
America Corporation (BAC ) and the
University of Indiana Center of Philan-
thropy, almost three-quarters of those
interviewed (billionaire donors in the
United States) had a philanthropic
strategy in 2011.
PRIVATE BANKERS, CONSULTING FOR “IMPACT PHILANTHROPY”Billionaires need help and want advice
about how to find answers to the most
basic questions when they undertake a
philanthropic action: What are the op-
tions for a donation? Which one should I
choose and why? How can I be sure that
it will be more than a donation and will
be an investment with a high social re-
turn? How can I maximize the impact in
terms of tax incentives? How can I make
sure the donation will have an impact
for generations to come? How can I get
more involved and make the donation a
business project?
This demand for information has cre-
ated a corresponding supply. Now, virtu-
ally all financial entities that provide
private banking services have specialized
divisions for consulting on philanthropic
causes. What’s more, they do it without
charging for this specific service, as value
added in the general consulting practice
for wealth management.
The aim of the private bankers is to
coordinate forces, not only to answer the
philanthropists’ questions but also to en-
The billionaires in the south of the continent tend to carry out philanthropy in educational causes, while those in the central and northern parts of South America appear more oriented to social issues, such as health.
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Gadala-Maria, CEO; Ana Lucia Chavarriaga, Chief Compliance Offi cer
Carlos Gadala-Maria, CEO
What role do custody banks fulfi ll within VG and which one do you have a relationship with?Our custodian banks play a very important role in the re-lationship between the broker-dealer and its clients, as the custodian banks are responsible for the safe keeping and the proper registration of all assets held by our clients. It is worth mentioning that VG does not have direct access to our clients’ cash or securities. What is VG’s Wealth Management process?The most important part of our wealth management process is to collect all necessary information to determine the risk tolerance and investment objective of each client. Second-ly, we construct diversifi ed portfolios designed to meet the risk profi le and needs of every investor. We then monitor the global fi nancial markets and make necessary recommen-dations and adjustments. Our fi nancial advisors work closely with our specialized credit teams and market analysts in or-der to provide the optimal investment alternatives. Why work with VG?At VG we feel that because of our strict investment guidelines, our experienced team of advisors and analysts, our open architecture, our competitive execution, and our philosophy of continuous portfolio monitoring, we are able to provide the optimal balance of service and results that our clients are looking for.
60 LATIN TRADE SEPTEMBER-OCTOBER 2013
PRIVATE BANKING: PHILANTHROPY
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sure that they achieve maximum benefits
that most countries’ tax laws provide in
terms of donations.
In this sense, the fi rst mission of the
teams specializing in philanthropic ser-
vices in the business of private banking
is to identify and evaluate the motives an
individual or his family has for undertaking
a philanthropic project. From there they
determine the areas where an investment
could be made, decide whether there will
be periodic donations or only “seed capital,”
organize the follow-up structure, invest and
fi nally, evaluate the results.
Some private banking entities are so
deeply involved in causes of great impact
that, in the signing of agreements with
non-profit non-government organiza-
tions (NGOs) in the course of look-
ing for new sources of donations, they
have taken the initiative of contacting
them to establish links. The reason is so
that the clients of private banking can
know first-hand what the opportunities
are for financing the projects of these
NGOs. Other private banks have associ-
ated themselves with business schools
to support departments in research for
philanthropic projects, while others have
established prizes to encourage new
philanthropic activities.
Apart from that, to the extent to which
the philanthropists want to be in style and
not only donate but also follow up on the
impact of their projects, the private bank-
ers have had to incorporate this into their
job of managing the philanthropic invest-
ment portfolios. Th is is not only about
funding projects but also ensuring their
long-term viability. Th at’s why it has a new
term: “impact philanthropy.”
TRENDS IN LATIN AMERICAFor any billionaire in any part of the
world, the possibility of obtaining tax
benefits from their donations provides a
huge incentive to undertake philanthrop-
ic enterprises. However, the study done
by BAC and the University of Indiana
shows that only a third of those surveyed
in the United States admitted that tax
relief is a motive for doing philanthropy.
Another survey of American bil-
lionaires, published by Forbes in 2012,
showed that in almost three-quarters of
the cases, the donations are based on a
belief in family values and traditions.
The survey also found that almost
two-thirds of those interviewed prefer
anonymous donations to public philan-
thropy, which would confirm the idea
that their inspiration is altruism and
not just publicity.
Anecdotal evidence from Latin
America suggests important similarities
and differences relative to the trends in
the United States and Europe, which
have significant implications for assess-
ing risk management that the private
bankers and lawyers provide their cli-
ents in the region.
One basic difference is cultural. In
countries like the United States, which
have basically always been rich, there
is a strong tradition at the family and
They don’t just sign the check with the donation and forget about it. There is no doubt that the billionaires
want to achieve “impact philanthropy.”
SEPTEMBER-OCTOBER 2013 LATIN TRADE 61
PRIVATE BANKING: PHILANTHROPY
individual level about the importance
of giving. In contrast, in nations that
have suffered scarcity, as is the case in
LatinAmerica, the feeling is possibly
much less deeply rooted. On the other
hand, in countries where there has been
a lot of insecurity billionaires tend to
be much more cautious with their do-
nations, according to Carlos Gadala-
María, CEO of Vector Global Wealth
Management Group.
And although some Latin billion-
aires are starting to call for services of
“impact philanthropy,” the truth is that
most of their philanthropic activities are
carried out without much strategy at all.
They do respond to altruistic motives,
and even anonymous giving (often nec-
essary for security reasons), but these are
directed at causes in which they cannot
measure impacts.
It ’s hard to find clear-cut trends, but
according to a group of bankers from the
private banking arm of Merrill Lynch
(ML) who were interviewed by Latin
Trade in Miami, the philanthropy could
be much better organized. To the extent
that there is a plethora of social causes in
the region and the motives for giving are
mostly a result of emotional factors (for
example, the family legacy), the distribu-
tion of donations is far from optimal.
The ML team also noted that there
appears to be a continental divide, with
an inclination among the billionaires
in the south of the continent to carry
out philanthropy in educational causes,
while those in the central and northern
parts of South America appear more
oriented to social issues, such as health
campaigns for children or the fight
against specific diseases.
Th e bankers agree that, as in the rest of
the world, there is a growing conscious-
ness among the youth of Latin America
about the importance of philanthropy as
an ethical value. Th at’s even true of the
sustainability of some dynasties.
In fact, according to Scott Bowman, a
lawyer with the legal firm Proskauer in
Boca Raton, Florida, in his estate plan-
ning work for clients (including many
Latin Americans), there are cases where
the trustees that manage inheritances
make philanthropic works a condition of
payouts for the heirs.
In other situations, the ethnic legacy
pushes the American billionaires to-
ward doing philanthropic work in the
country of origin of their Latin Ameri-
can forefathers. As Paul Roy, a partner
in the law firm Withers Bergman LL
P explains, these actions are sometimes
carried out by means of money sent
directly to the region or indirectly, for
example, by donating resources for the
research and development of products
made in the United States or other
countries – say, in the health or tech-
nology sectors – that in the end are
used by persons from the marginal sec-
tors of the region.
On the other hand, the work of
the private bankers that serve Latin
American clients appears to be gaining
recognition through the important con-
sulting they provide in philanthropy. For
example, Morgan Stanley Wealth Man-
agement makes occasional donations in
the name of its clients for specificproj-
ects, including the initiative against
Neglected Tropical Diseases (NTDs),
says Verónica López-López, Executive
Director of the firm.
In fact, as López-López recalls, Car-
los Slim himself has joined the project
against the NTDs, which was originally
started by Gates, and which can be con-
sidered to be a pioneering effort in terms
of coordinating and searching for syner-
gies among billionaires around the world.
In this case it involves the premier bil-
lionaire in Latin America.
So that’s how things are, in the light
in which private bankers and estate
planners see what is happening in Latin
America and other parts of the world.
They don’t just sign the check with the
donation and forget about it. There is
no doubt that the billionaires want to
achieve “impact philanthropy.”
David Ramirez reported from Miami.
62 LATIN TRADE SEPTEMBER-OCTOBER 2013
BY SANTIAGO GUTIERREZ
FOUNDATIONS: HIGH IMPACT
The woman hadn’t moved from her spot all
day. She was in front of one of the houses
of the Ronald McDonald House Charities
(Rmhc) in Sao Paulo, Brazil. Her son, stricken
with cancer, was in a nearby hospital and this
woman spent hours there, waiting until visit-
ing hours. But, she wasn’t like the thousands of
mothers who live free of charge in one of the
329 houses the foundation operates through-
out the world, or the 16 that are located in 14
countries throughout Latin America. She was
on the outside. “She told me there are basic
conveniences there that she doesn’t have in her
own house,” recalls Lyana Latorre, the director
Rmhc for South America. “She thought she
shouldn’t cross the threshold because she didn’t
deserve to be there. Our greatest satisfaction
is that this dignifi ed lady could be close to her
sick son for six months throughout his recov-
ery, thanks to our work.”
It’s a moving story about an entrepre-
neurial foundation that provides service to
poor children and adolescents up to 18 years
old, with programs that directly improve
their health and the well-being of their fam-
ilies. Th e work of putting suffi cient resources
in the hands of the families with children
sick with cancer, or other complex chronic
illnesses, has an incalculable value.
Th e diagnosis of an illness that requires
prolonged medical treatment destroys the lives
of children, of families, and of couples. Even
if they can get treatment through the national
health systems, the families don’t have the
resources to accompany their children to the
treatments. Th ey don’t have enough money
to go to another city or to be with their loved
ones for the time required. “Th ey ignore the
diagnosis or stop treatment because they don’t
have any way to live close to the hospital,” says
Lyana Latorre.
Th at’s why there are Ronald McDonald
houses. Th ey’re a home away from home, where
the families can stay for free and remain at
their children’s side while they receive treat-
ment. In 2012, 25,516 families were helped
throughout the region.
Th e foundation also has Family Rooms,
places inside the hospitals where families can
be with their sick children. Th ey can’t sleep
there due to hospital restrictions, but there
are places with showers, laundry and waiting
rooms. Th ese are very useful for people who
have children in intensive care or who are get-
ting chemotherapy or dialysis, and who can
have visitors for only a few hours a day. Almost
39,000 families were helped in 2012.
Th ese places help keep families together
Ronald McDonald House Charities is one of the few
foundations that extend throughout the entire region of
Latin America. A case study of high impact.
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when one parent has to stay home while the
other goes off to the city where treatment takes
place. Many mothers who arrive at Rmhc are
adolescents themselves. Th e foundation works
with them in the Family Rooms, to help them
recover their self-esteem and get them on track
to a productive and happy life. Th ey teach the
mothers skills such as hairdressing or how to
give manicures, which do not require large in-
vestments in materials, so that when they return
home they have a way to earn a living. Th ey
may give classes to the children being treated so
that they don’t get behind in their schoolwork,
another problem these types of long-term ill-
nesses create.
Financing comes from various sources. Th e
foundation gets a percentage from sales of each
“happy meal” that McDonald’s sells in the
region. It also receives money from companies
such as Arcos Dorados and Coca-Cola, and
donations of time from Ernst and Young, which
audits its fi nances, or from “green” architectural
and engineering fi rms that design the houses
and the Family Rooms. One day a year, called
McDía Feliz (Happy McDay), Arcos Dorados
donates all of its big mac sales to the founda-
tion. Arcos Dorados also assumes its offi ce
costs and supports the diff erent processes in
each country as the fi nancier and legal spon-
sor. Rmhc operates with only a few people and
directs most resources toward services rather
than to administration.
Th e foundation maintains alliances with
local governments, which are the owners and
operators of the hospitals, with other entities in
the private sector and with academic institu-
tions such as Stanford and Northwestern (Kel-
logg) to maintain the highest standards in their
work of medical care and management.
Th ere’s another noteworthy advantage in
this foundation. It functions as an international
network, bringing a child from Guatemala to
be looked after in a hospital in Houston, while
the family lives in an Rmhc house. Th e fact is,
says Lyana Latorre, although there are more
than a hundred foundations that focus on the
well-being of children in Latin America, only
four have total regional coverage.
Rmhc shows how eff ectively it can design
and operate a project that provides relief for
children under medical care and for families,
and in addition, it off ers the poorest people of
the region a dignifi ed treatment that otherwise
would be only a luxury beyond reach.
Santiago Gutierrez reported from Bogota.
Kevin Pardinas (center) is one of four Hispanic students to receive an RMHC(R)/HACER(R) National Scholarship of $100,000 this year.
HOUSES WITH A HEART
OIL AND GAS: PDVSA
Leader Of The Year
Otto Pérez Molina, President Of Guatemala
lifetime Achievement
María Das Graças Silva Foster, CEO, Petrobras
ceo Of The Year
Álvaro Fernández Garza, CEO, Alfa
innovative CEO Of The Year
Germán Efromovich, CEO, Synergy Group
international CEO Of The Year
Ignacio Antoñanzas, CEO, Enersis
trade Americas Bravo Award
The Goodyear Tire & Rubber Company
innovative Social Sustainability
Magalie Dresse, President, Caribbean Craft
distinguished Service In The Hemisphere Award
Marina Silva, F. Senator of Brazil & Director of the Inst. of Democracy and Sustainability
dynamic CEO Of The Year
Enéas Pestana, CEO, Grupo Pão De Açúcar
64 LATIN TRADE SEPTEMBER-OCTOBER 2013
BY DIEGO STEWART
INVESTMENT: URUGUAY
Ten years ago, Uruguay’s level of foreign in-
vestment barely reached $200 million, but
today, the number exceeds $2.7 billion per year.
What happened that a small country could
increase Foreign Direct Investment (FDI) by
an order of magnitude?
Historically, Uruguay was one of the Latin
American countries that attracted the least
amount of foreign investment. Only after 2005,
with the arrival of the Botnia cellulose plant,
whose construction required an investment of
$1.2 billion, did the graph’s curve arc upward in
terms of FDI.
Located on the banks of a river that is the
border with the Argentine Republic, the pulp
and paper company Botnia placed Uruguay
into a large environmental confl ict with its
neighbor, but Uruguay’s response sent a signal
that showed the nation’s interest in protecting a
foreign investment project.
It’s not just happenstance that before the
end of 2013 the forest products company
Montes del Plata will inaugurate a new cel-
lulose plant in Uruguay with an investment of
about $2 billion. Th e partners in the Montes
del Plata project are Arauco, one of the largest
forest products companies in Latin America,
and the international fi rm Stora Enso, with
Swiss and Finnish capital.
Situated in the locality of Conchillas,
about four miles from the Rio de la Plata, its
construction will create 6,500 jobs and once
in operation, it will be capable of producing
1,300,000 tons of cellulose per year. “It will
be a state-of-the-art plant, with technology
that meets the BAT standards (Best Avail-
able Technology and Techniques) of the forest
industry,” general manager, Erwin Kaufmann
told Latin Trade.
Kaufmann spoke highly of the excellent
investment climate that he found in Uruguay,
although he recognizes that construction
strikes were a factor that delayed the inaugura-
tion that was slated for 2012.
However, for Kaufmann, the element that
Uruguay must improve if it is to attract large
investments is to avoid producing infrastruc-
ture bottlenecks. As part of the answer, Montes
Plata will have a port terminal for deep draft
ships which will export cellulose and bring in
wood to be delivered by barge. Th e govern-
ment of Uruguay recognizes that it’s urgent
to improve the nation’s infrastructure and its
president, Jose Mujica, has warned of the risk
of a “logistics blackout.”
Uruguay’s most ambitious project at the mo-
ment is the deep water Atlantic port that will be
the departure point for forest products, minerals
and bulk products not only from Uruguay, but
also part of the production of Argentina, Bo-
livia, Paraguay and southern Brazil. It’s a project
that requires regional political consensus.
Uruguay’s investment climate has made it a magnet for foreign investment.
Industry, ports, hotels and construction are all on the list of projects.
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To move the project forward, President Mu-
jica visited China this year and convinced the
Bank of Development to fi nance part of the $1
billion needed to build the port, plus support
for reactivating the rail line, another large gap
in Uruguay’s infrastructure logistics.
Uruguay XXI is the government agency
responsible for promoting the country and its
business climate. For its director, Andres Pelaez,
Uruguay has a unique promotional program for
investment in the region, which does not answer
to the government of the day, but to a state policy.
Kaufmann says the program of free trade
zones that Uruguay off ers was the determining
factor for the investor group that made the de-
cision to locate there. Palaez adds that the Law
of Investment includes attractive tax benefi ts
and doesn’t discriminate between foreign and
national investors. He emphasizes that it per-
mits the free repatriation of capital and profi ts
through a fl exible fi nancial system.
Soon, Uruguay will be able to trot out new
projects that refl ect its investment climate. Th e
hotel chains Hyatt and Hilton are building
their fi rst hotels in Montevideo. At Punta del
Este, the name of Donald Trump is associ-
ated with a tower on the Rio de la Plata, an
investment whose symbolic value will be worth
much more than the $100 million needed for
its construction.
Diego Stewart reported from Montevideo.
A NATIONAL PURPOSE
YEAR IED
2000 273
2001 297
2002 194
2003 416
2004 332
2005 847
2006 1.493
2007 1.329
2008 2.106
2009 1.529
2010 2.289
2011 2.505
2012 2.775
FOREIGN DIRECT
INVESTMENT IN URUGUAY
(Period: 2000-2012 Millions of dollars)
Sour
ce: B
anco
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guay
(BC
U) /
UN
ASEV
/ U
rugu
ay X
XI
66 LATIN TRADE SEPTEMBER-OCTOBER 201366 LATIN TRADE SEPTEMBER-OCTOBER 2013
BY DAVID RAMÍREZ
SPECIAL REPORT: EXECUTIVE EDUCATION
Leadership, fl exibility, multicultural skills,
and strategic vision appear to be the
most important qualities that top business
executives must possess to run today’s multi-
nationals and multilatinas in Latin America.
Although vast work experience and high edu-
cational levels could weigh-in when reaching
a very specialized position, the academic back-
ground no longer seems to be the single most
important determinant factor. Nevertheless,
graduate studies, such as an MBA continue to
open doors, as fi rms value them as a symbol of
willingness and motivation for an individual’s
progress.
Latin Trade interviewed representatives of
the human resources (HR) teams of several
leading companies in the region to get their
views on what kind of business executive is
in high demand. In fact, the HR teams of
many Latin American fi rms have been busy
in recent years, recruiting new executives as –
albeit slowdowns, just as the one experienced
in 2012-13 – the region has been growing
at high rates, which has generated new labor
needs in the most diverse areas.
What skills and training are fi rms looking for when they hire new employees?
A look at what universities are doing to make their students meet market needs.
IDEAL EXECUTIVE
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Unilever, the mass consumption goods
multinational, constitutes an example of this.
Th e company’s expansion in Brazil, Colombia
and Peru, among other markets in the region,
pressed demand for personnel specialized in
supply chain management, forcing the com-
pany to recruit talent outside its own ranks,
against the company’s tradition of using in-
ternal talent to cover vacancies. Talking about
this process, Pablo Maison, HR vice president
for Unilever in Latin America, highlighted
that their new recruits must have a “Latin
mind set” that could help their adaptation to
the company’s view of the region: “We value
the ability to deal with multiple cultures, so
that our executives can understand Latin
America as a large single-market, and fl ex-
ibility, so that they can adapt and move easily
within diff erent countries in the region.”
Accenture, the multinational fi rm of tech-
nology and consulting services, has also been
very active in hiring executives in recent years,
owing to the growth of their business in the
region. “Regarding the profi le of our new
recruits, we have gone from looking for people
with basic knowledge to fi nding executives
with very specifi c knowledge of their indus-
try,” said Gaston Podesta, responsible for Ac-
centure’s HR aff airs in Latin America, Europe
and Africa. He added that adhering to the
fi rm’s business model, new executives are also
required to adapt and work with diff erent
cultures and styles. Podesta highlighted the
growing need for executives to have “virtual
supervision skills, which in other words means
the ability to handle today’s technologies to
lead their teams from a distance.”
While some multinational fi rms have cov-
ered some of their vacancies in Latin America
by relocating talents from other parts of the
world, the multilatinas have been compelled
to increase eff orts on this front. In many cases,
their exponential growth has forced them to
implement substantial changes in the com-
position of their mid and high-level executive
positions. Th e multilatinas have also been
required to focus on employee qualities that
did not seem so important in the past, pointed
out Sergio Osorio, administrative vice presi-
dent, and Adriana Mejia, manager of HR and
THE SEARCH FOR THE
OIL AND GAS: PDVSA
68 LATIN TRADE SEPTEMBER-OCTOBER 201368 LATIN TRADE SEPTEMBER-OCTOBER 2013
administrative aff airs, at Grupo Argos - the
Colombian multilatina that has been rapidly
expanding in the cement and ready-mix mar-
kets of the United States, Central America
and the Caribbean. “Th e chief attributes of
the executives that we are recruiting today
include global vision, capacity to adapt, inno-
vation, teamwork, and high ability to incorpo-
rate the criteria of business sustainability (in
economic, social and environmental terms.)”
In the case of Femsa, the multilatina bot-
tler, today’s business executive’s profi le must
include abilities such as entrepreneurship,
execution, negotiation, leadership and deal-
ing with multiple cultures. In response to a
Latin Trade questionnaire, the company’s HR
team says that “to Femsa, leadership is a key
attribute. It is based on respect for people, by
practicing the institutional values that we have
promoted and carried out for more than 120
years.”
Arcos Dorados, which manages the fran-
chises of the McDonald’s restaurant chain
throughout the region, constitutes an in-
teresting case study, given the rapid success
achieved by its top management following
the set up of their operations in 2007. Pablo
Rodriguez de la Torre, HR corporate vice
president, highlighted the ability to deal with
multiple cultures as the main attribute that
the company looks for whenever they hire
new executives. “People that have had experi-
ences in other markets in the region provide a
great added value to the fi rm,” said Rodriguez
de la Torre, who also underlined the impor-
tance that simultaneously, their executives
must have a great strategic vision, focus on
detail and largely be self-starters: “Th ey need
to be hands on, as this is a business in which
any small detail can make the diff erence be-
tween winning or losing. Th is also demands
lots of proactivity and commitment.”
Rodriguez de la Torre’s arguments confi rm
that today’s executive must be fl exible and
practical. As Andrea Destri, head of HR in
Brazil for Zurich, the multinational insurance
company, summarized it: “As we are growing
fast, more than market, it is essential to hire
people that are able to deal with pressure in
a positive way, make things happen, promote
collaboration across organizational boundar-
ies, build trust among the stakeholders, walk
the talk. An executive who believes in people
potential, inspires them and develops a mean-
ingful vision.”
RECRUITING YOUNG WORKERS, AND WOMENSeveral companies focus their recruitment on
young executives that are trained internally to
reach mid- and high-level positions. Firms,
such as Procter & Gamble (P&G), Unilever,
McKinsey & Company and Grupo Roble
operate this way. P&G’s HR team for Latin
America (Karina Garcia, regional talent man-
ager, and Leyla Hormazabal, Panama talent
manager) told Latin Trade they consider three
basic skills when hiring new executives: entre-
preneurship, leadership and communication.
Th is multinational company does not look to
cover specifi c vacancies. Instead, it looks for
people that can adapt to their business culture
and assigns them to positions where they can
maximize their abilities and potential.
On the other hand, although several fi rms
have targeted the promotion of minorities as
a basic business principle, Unilever’s eff orts to
boost gender diversity in favor of women is
noticeable. “Gender promotion is key within
Unilever’s strategy to position women for top
executive roles. Our global target is to cover PH
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“Leadership is a key attribute. It is based on respect for people by practicing institutional values.
”
SPECIAL REPORT: EXECUTIVE EDUCATION
Femsa
70 LATIN TRADE SEPTEMBER-OCTOBER 201370 LATIN TRADE SEPTEMBER-OCTOBER 2013
SPECIAL REPORT: EXECUTIVE EDUCATION
50 percent of our top-level business execu-
tive positions with women by 2015. We are
making very good progress in Latin America,
where we already have reached a level of 45
percent,” said Pablo Maison, HR vice presi-
dent of Unilever for Latin America.
UNIVERSITY - INDUSTRY TIESTh e academic background of the new re-
cruits is key to fi rms that focus in recruiting
low- and mid-level executives, such as in the
case of Grupo Roble, the Central American
multilatina involved in the hospitality and
construction industry. As explained by Clau-
dia Rodriguez Angulo, the company’s regional
HR manager, Grupo Roble favors the hiring
of graduates from highly acclaimed universi-
ties, and preferably with an MBA degree
obtained in Europe, the United States, or one
of the premiere institutions in Latin America.
Rodriguez Angulo concurs, along with other
colleagues, that the region’s universities are
doing a good job training MBAs, although as
Femsa’s HR team pointed out, there is a need
for more exposure to real-life experiences,
as well as higher ties between university and
industry, although both these topics are being
addressed.
Th e most prestigious universities in the
region acknowledge the need to increase their
students’ experiences in actual “on–the-job”
situations. In this regard, Laura Esther Zapata
Cantu, director of the MBA program at the
Instituto Tecnologico de Monterrey (Itesm),
pointed out that “we have looked for a way to
reach a balance in our classrooms. We have
teachers coming directly from the academy,
others that once belonged to the business
world and today are in the university, and a
third group of active business leaders that
dedicate part of their time to lecture students.
Th e idea is to bring the industry into the
classroom.” In addition, Itesm is strengthen-
ing the links with the private sector by coop-
erating in the mutual identifi cation of supply
and demand labor opportunities, and in some
cases, the joint sponsoring of students. On
her part, Diana Vesga, director of the MBA
program at the Universidad de los Andes in
Bogota highlighted the presence of teachers
that are active in business consulting, as well
as the participation of active businessmen in
the MBA’s advisory board, “as part of the ef-
fort to be fi ne-tuned with what is happening
in the real world.”
Universities are also working so that their
MBA graduates develop the main skills
required by hiring fi rms, such as leadership,
innovation and dealing with other cultures.
Zuluaga and Vesga agree that MBA’s contents
are useful to develop leadership skills, whereas
the ability to deal with multiple cultures is
promoted through the exchange with foreign
students. In the Universidad de los Andes
MBA’s case, the share of foreign students is 25
percent, according to Vesga.
Breaking with the tradition of focusing on
functional areas, a new MBA program at the
University of Miami – the Miami Executive
MBA for the Americas – plans to center on
four key areas: global multicultural leadership;
global operations management and decision-
making; global strategy and execution; and
entrepreneurship, innovation and technology.
According to Eugene W. Anderson, dean of
the Business School at this American univer-
sity, the program diff erentiates from others in
that it will have more cases studies of Latin
American companies and will not be designed
for a typically young audience, but for “people
with a strong professional trajectory,” as the
academic pointed out.
Some fi rms have tried to strengthen
their ties with the university with unique
approaches. In Unilever’s case, one of the
objectives is to diversify relations by reaching
universities that, while top notch, are not the
ones more sought after by other fi rms. Mean-
while, companies such as Arcos Dorados have
taken a step further in implementing internal
training and professional education programs.
Th e McDonald’s University “is a guarantee
of the company’s sustainability that started
supporting the operational area, but today
encompasses not only the development of op-
erational excellence, but also of the leadership
and education to do business,” said Pablo Ro-
driguez de la Torre, HR corporate vice presi-
dent at Arcos Dorados. Th e Brazilian campus
of the McDonald’s University, the only one in
Latin America, has alliances to develop edu-
cation programs with institutions, such as the
prestigious Getulio Vargas Foundation.
Th e eff ort currently undertaken in Brazil by
the climate change and sustainability division
of the multinational consulting fi rm Ernst &
Young (E&Y), led by Ricardo Catto, is also
worthwhile to mention. According to Catto,
while E&Y’s Brazilian operations demands
executives that are highly experienced and
come from the most varied disciplines, they
have agreed on an internship program with
the University of Sao Paulo. Some 20 to 25
students in their last year are recruited by the
company each semester, and only the best are
selected at the end of the internship to con-
tinue in the consulting business.
David Ramirez reported from Miami. PH
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72 LATIN TRADE SEPTEMBER-OCTOBER 2013
BY JAIME MEJIA
SPECIAL REPORT: LOGISTICS
Latin America is in an exceptional position to take advantage of the
opportunities that could arise from a new order in the global orga-
nization of supply chains and logistics.
Th is is about major trends created by the changes the global econ-
omy has undergone in the last few years that could cause, among
other things, a relocation of supply chains, such as the transfer of
industrial operations from China to other countries that could be
more competitive. Latin America is clearly on the front line to be
the site for these new production centers.
Some companies see this very clearly. “Latin America has the
advantage of proximity and we are very optimistic about the growth
of our business especially in Brazil and Mexico,” says John Gazitua,
general director of operations of the cargo transport division of Fe-
dEx for Latin America and the Caribbean.
Th is could happen because it is becoming more clear that China is
losing its big advantage of low labor costs and because the growing
costs of transportation are forcing companies to look at shortening
the distance between the manufacturers and consumer markets.
In today’s economy, logistics are a key factor in any business pro-
cess and companies are looking for ways to reduce costs to increase
their profi tability. In Latin America, logistics costs could represent
up to 30 percent of the cost of a product, according to research from
Amar Ramudhin, an expert from Georgia Tech’s Supply Chain and
Logistics Institute in Atlanta.
At the same time, other important industries in the logistics pro-
cesses, such as shipping, are facing huge challenges because, after the
global economic crisis of 2008, these companies have been left with
excess capacity and their main markets in developed countries have
been seriously weakened.
Th ere are also changes in the supply chains that anticipate, for
example, that the companies are breaking up their supply chains
into multiple units to better respond to the change in the global
economy, as indicated by a report from consulting group McKinsey
& Company. Another logistics trend shows up in population growth in the
large Latin American cities. In the so-called mega-cities, the dis-
tribution of products is expected to continue through traditional
channels or neighborhood stores, and this creates major logistical
challenges for the companies.
Latin America is in an advantageous position to capitalize on
these changes that will arrive in the next decade, according to a
report from the World Economic Forum. However, the region still
isn’t suffi ciently prepared for the new business, as is indicated in the
last Enabling Trade Index (ETI) of the World Economic Forum.
With the increased labor costs in China, the world’s logistical architecture is undergoing a sea of
change. Latin America can benefi t from the new environment.
THE OPPORTUNITIES OF THE NEW GLOBAL LOGISTICS ORDER
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74 LATIN TRADE SEPTEMBER-OCTOBER 2013
SPECIAL REPORT: LOGISTICS
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Mirafl ores Locks. The Panama Canal, with its 48-mile ship canal.
O ne of the main motives for expanding the Panama Canal was the
need to allow larger container ships to pass through.
And that’s what will happen. Th e canal will allow the passage
of ships with a capacity of up to 12,000 TEUs. But, not for long
will those ships be the largest ones to ply the global trade routes.
Ships that can carry 18,000 TEUs are already entering the mar-
ketplace, and even the new Panama Canal will be too small for
this type of mega-ship.
Until 2008, the big ships were growing rapidly and increasing their
installed capacity. “Th en the global economy tanked, and the shippers
were left with excess capacity,” says Amar Ramhudin, an expert for
Georgia Tech’s Supply Chain and Logistics Institute in Atlanta.
Paradoxically, one of the responses of the shipping companies to
the global economic crisis wasn’t to reduce the size of the ships, but
to increase them even more, together with other measures aimed at
increasing effi ciency and reducing costs. Th e largest ships carry more
cargo and thus can take advantage of the fact that on each voyage they
consume less fuel per TEU.
“Th e main cost of the ships is fuel. If the companies consume less,
they reduce their costs and at the same time, have a favorable eff ect on
the environment,” says Robert Jan van Trooijen, executive president
of Maersk Central America, an affi liate of the Danish multi-national
Maersk Group, one of the world’s principal carriers of containers.
In fact, Maersk’s new 18,000-TEU container ships will very soon
be traveling the global shipping routes. Jan van Trooijen says they will
be used mainly for trade between Europe and Asia, and it’s possible
that they won’t be going to Latin America for many years because the
demand from trade in the region doesn’t justify it.
In addition, with the growth in the size of ships, there are other
factors which, according to Ramhudin, are changing the rules of
global trade, especially in the supply chains and logistics throughout
the world. Ramhudin says the higher fuel costs and the expected rise
of labor costs in China are causing a fundamental change in container
transport, and therefore in the way in which companies obtain raw
materials to produce goods, and the way products are distributed to
the diff erent markets.
Th e shipping companies, for example, have responded by reduc-
ing travel speeds of the ships to cut fuel costs. Ramhudin says that
although this is cost-eff ective, it lengthens cargo travel times and
increases inventory in transit, which has negative eff ects on the whole
global supply chain.
To complete the list of challenges for the global supply chains, the
cost of labor in China, the big provider of cheap labor, is increasing. As
a result, says Ramhudin, companies have been developing contingency
plans to mitigate the growing risks in the chain. “Transferring produc-
tion operations to sites closer to the consumer markets is an increas-
ingly attractive alternative. Some companies have already moved their
operations, and in the next few years, this trend will continue to grow,
and it’s expected that more operations will be transferred to the United
States and Latin America.”
Th e increases in fuel and labor costs in China have changed the way containers are transported by
sea. A look at the new trends.
CLOSER TO THE CONSUMER
OIL AND GAS: PDVSA
76 LATIN TRADE SEPTEMBER-OCTOBER 2013
SPECIAL REPORT: LOGISTICS
Despite the growth of the big supermarket chains and large retail
companies in Latin America, the neighborhood stores aren’t going to
disappear any time soon. As a principal distribution channel in the region,
the stores represent one of the most important logistical challenges in
Latin America over the next decade.
According to Logyca, a consulting fi rm specializing in logistics based
in Bogota, Colombia, it’s increasingly clear that the future of product
distribution in Latin America will be dominated by the trend of major
population growth in the big cities.
Th e research done by Logyca, together with MIT in the United States,
shows that although the so-called modern channel (supermarkets and
developed retailers) is growing in Latin America, the traditional channel
(neighborhood stores) will continue to be crucial in the distribution of
products throughout the region. Logyca points out that although more
than 70 percent of the products are distributed through the modern chan-
nel in the developed countries, in Latin America, the traditional channel
still represents 37 percent or more of product distribution. Even in Brazil,
Argentina, Colombia and Peru, the traditional channel represents more
than 50 percent of all distribution.
Th e mega-cities trend “represents a huge challenge for logistics and sup-
ply chains because in many places, it’s not easy to deliver the products to the
neighborhood stores, and in some cases, distribution is carried out by motor-
cycles and even bicycles,” says Christopher Mejia, a Logyca consultant.
Mejia says that although the middle classes are growing, and that this
suggests a boost to the modern distribution channels, the base of the pop-
ulation pyramid, composed of low-income groups, is growing even faster,
and this means the traditional channel remains strong in Latin America.
With the trend toward mega-cities, the density of population in
the world’s large urban centers is on the rise. Th e research of MIT and
Logyca shows that there are about 55 mega-cities in the world, with
several in Latin America, starting with Mexico City, Sao Paulo and
Bogota. In fact, 23 of the mega-cities are located in emerging markets,
where it’s predicted in 20 years, there will be more than 70 of them,
according to the study.
Th e Latin American cities are among the 40 most densely populated
in the world. To distribute products in these very dense areas is a monu-
mental logistical challenge, and that’s why Logyca thinks the traditional
channel is here to stay. Mejia also believes that in the future, the logistics
of product distribution in these mega-cities will have to be supported by
software and global positioning systems, to enable the shippers to assign
products in the right quantities and to the right routes, even in highly
complex environments such as very densely populated cities where con-
sumers have their neighborhood stores.
“It’s possible to imagine a system in which you can see, in real time,
that products are being distributed and what their routes are, with the
support of GPS and other logistics management tools,” says Mejía.
Mega-cities – cities with a population of 10 million people or more – appear to be an inexorable
trend for the future as they set up huge challenges for commercial distribution in the region.
THE NEIGHBORHOOD STORE WON’T DISAPPEAR
42% 42%
63% 47%
30%
52%
20%
40%
76% 78% 80%
99% 88%
58% 58%
37% 53%
70%
48%
80%
60%
24% 22% 20% 1% 12%
Argentina Brazil Chile Colombia Ecuador Mexico Peru Venezuela U.S. Italy UK France Spain
Modern Channel UTT
(Up The Trade)
Traditional Channel DTT
(Down The Trade)
Source: Universos Nielsen 2006 and Universos Nielsen LATAM 2009. Euromonitor retailing 2010. Mapa del retail ILACAD, 2011. * The data from France and Spain is from 2006.
The neighborhood store is still the preferred channel in Latin America
OIL AND GAS: PDVSA
78 LATIN TRADE SEPTEMBER-OCTOBER 2013
SPECIAL REPORT: LOGISTICS
In recent years, the largest and most sophisti
cated companies in the world have devel-
oped complex systems of logistics and supply
chain management to produce very compli-
cated goods and services for highly competi-
tive, growing markets. According to a recent
report from McKinsey & Company, a global
consultancy fi rm, these sophisticated systems
have had trouble adapting to the rapid and
unexpected changes in the global economy.
McKinsey says that many logistics systems
were carefully engineered to manage high vol-
ume industrial operations that capitalized on
the opportunities provided in China and other
countries with low labor costs. In the future, the
attractiveness of diff erent regions of the world
for establishing industrial operations will change
more quickly, changing the capacity of compa-
nies to produce large volumes profi tably.
According to the consultants, the growing
wave of uncertainty and complexity in business is
forcing companies to change their logistics sys-
tems and global supply chains to be more fl exible.
McKinsey’s report says many global compa-
nies are responding to these challenges in two
ways. Th ey are breaking up their supply chains
into several smaller units that are better able to
adapt to the higher levels of complexity. Or,
companies are converting their supply chains into
systems designed to hedge against the uncertain-
ty of reconfi guring their manufacturing produc-
tion networks to respond easily to the changes.
Th e breaking up of the supply chains is done
by designing structures that can respond better to
the needs of the markets. A company could have
a supply chain for all types of goods according to
the demand and the complexity of production.
Th ey’re leaving behind the models in which there
is just one chain for all goods, especially if it is a
multi-national fi rm with a broad range of prod-
ucts for multiple markets.
Companies could use the supply chains as a
way of hedging against uncertainty risks in the
markets, which means adopting the appropriate
combination of production locations when con-
ditions change. Th e report asks, is China the op-
timum site to produce if its currency appreciates
by 20 percent and the price of petroleum rises,
increasing shipping costs? Companies will have
to respond with more fl exibility to the changes
and uncertainties of the world economy.
Companies will have to change their logistics systems and global supply chains to make them more fl exible.
THE SUPPLY CHAINS OF THE FUTURE
EVERYONE CAN BE A CHANGEMAKER
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“Everyone a Change Maker” taking advantage of the location of South Florida as a bridge to Latin America and generatingstrategic partnerships to leverage social entrepreneurship and its impact in the Americas.
80 LATIN TRADE SEPTEMBER-OCTOBER 2013
SPECIAL REPORT: LOGISTICS
Global economy-watchers are barely starting to comprehend
the magnitude of the economic changes that developed fol-
lowing the massive global crisis of 2008. Not only did the nations
of the developed world in Europe and the United States enter
into an unprecedented recession, but many sectors have had to
re-invent themselves as a result of the diffi culties.
One of the sectors in the midst of re-inventing itself is interna-
tional trade and the companies that transport goods as part of the
supply chain.
Th e global supply chains make it possible for goods to be pro-
duced and distributed throughout the length, and breadth, of the
world’s marketplaces. Th ese chains are in the midst of a transfor-
mation which, over the next decade, will bring new processes of
manufacturing and sales, and which will also represent opportuni-
ties for Latin America.
A report from the World Economic Forum in 2012 summa-
rizes the agents of change in the supply chain as: the rising cost
of fuel, the emergence of new consumer market centers due to
the growth of the middle class in emerging countries, and the
decline of China as the biggest center of low-cost industrial pro-
duction. The combination of these major trends is creating the
need to seek new production centers outside of China, and to
reduce the distance between manufacturing plants and the major
consumer markets.
A document published in September 2013 by Supachai Pa-
nitchpakdi, secretary general of the Swiss-based United Nations
Conference on Trade and Development (Unctad), tells us that
world trade is undergoing a change that is so deep that for many
economies it will mean a structural change in their development
model. “The change is from a development model oriented to
exports to another more focused on internal consumption,” says
the document.
Th is transformation is due to the fact that the major sources
of demand for global trade in the developed world such as the
United States and Europe are no longer growing at the same rate
as they were before the crisis.
Th e container transport companies are well aware of the change
in the global economy and are adapting to it rapidly. “We think
the purchasing power of the world’s consumers is moving toward
the emerging markets such as those of Latin America,” says Poul
Hestbaek, vice-president of Hamburg Sud, one of the world’s big-
gest container transport companies.
According to Hestbaek, the numbers for growth of trade have
changed dramatically. “Before the crisis, global trade was grow-
ing at rates of 10 percent per year. In 2008, it collapsed, and then
in 2010, there was a rapid recovery, but now we don’t expect to
return to double-digit growth, but rather to something more
aligned with GDP growth.”
However, today Latin America has other perspectives. While
the business of carrying containers is growing at annual rates of
two to three percent in the developed world, in Latin America
the rates are between five and seven percent in terms of volume,
says Hestbaek.
That’s where Latin America has a large advantage: the poten-
tial to transform itself into the new industrial production center
for the world, and the expansion of the middle class in countries
like Brazil and Mexico would convert the region into a new con-
sumer market.
Th e World Economic Forum report says that for these reasons
and others, it expects changes in the geography of the supply
chains throughout the globe over the course of the next 10 years.
“Th e markets of the south will continue to grow in relative impor-
tance, and this will produce the reorientation and relocation of the
value chains, possibly in unpredictable ways,” the report adds.
Th ere is a new need to fi nd industrial production centers outside of China and to reduce the distance between the factories and the major markets.
THE NEW GEOGRAPHY OF SUPPLY CHAINS:
LOOKING SOUTH
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82 LATIN TRADE SEPTEMBER-OCTOBER 2013
Latin America is far from being in fi rst place
on the Enabling Trade Index (ETI), which
is the index the World Economic Forum uses
to measure how prepared a country’s economy
is for global trade.
In the 2012 index, the leaders were econo-
mies that were small, but very open and ef-
fi cient. Th e fi rst two countries on the list
are Singapore and Hong Kong. Th ese two
economies show high performance in the key
variables of the index, with policies very open
to trade, good infrastructure, some of the most
effi cient border administrations, and a business
environment favorable to commerce.
And Latin America? It’s not at the top of
the list, but it’s not at the bottom either. Its
performance is mid-way down the list. Th e
biggest obstacle for Latin America is the gen-
eral environment for business, where there is
still a lot of room for improvement, especially
in areas like corruption and lack of security, fac-
tors which increase the cost of importing and
exporting for the nations of the region.
Th e leaders in the region are Chile, which is
number 14 on the index, Uruguay, which is in
40th place, and Costa Rica, which occupies the
43rd spot on the global list. Th e big economies of
Brazil and Mexico have a less acceptable assess-
ment and occupy numbers 84 and 85 respectively.
Th e Enabling Trade Index measures four
crucial areas for international trade: 1. Access
to markets or the performance of a country in
receiving products from abroad, and promoting
access to external markets for its exporters; 2.
Th e effi ciency of the administration of the bor-
ders, which refers to the authorities and institu-
tions charged with administering the arrival
and departure of products; 3. Th e transporta-
tion and communications infrastructure; and 4.
Th e business environment, which includes the
regulatory environment and physical security.
Jaime Mejia reported from Miami.
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SPECIAL REPORT: LOGISTICS
Latin America has problems of corruption and security, which complicate global trade.
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84 LATIN TRADE SEPTEMBER-OCTOBER 2013
BY DAVID RAMIREZ
FINANCE: FORECAST 2014
With the expectations of an economic
rebound in 2013 vanishing as the year
comes to an end, Latin American economies
look ahead for better times in 2014. Although
prevailing uncertainties about the international
environment could prevent the region from
recovering the dynamism shown prior to the
2008-09 crisis, there are reasons for hope. Th e
continued expansion of the middle class and
infrastructure investments will likely support
a slim economic recovery next year, whereas
strong macroeconomic conditions will probably
help the region to weather external adversities.
Amid challenges, the region maintains po-
tential to sustain higher economic growth rates
in the long run. “We see the current decelera-
tion as mainly cyclical, rather than structural,”
says Irene Mia, regional director for Latin
America and the Caribbean at the Economist
Intelligence Unit (EIU). Th e EIU expects
regional GDP to grow by an annual average
rate of 3.7 percent in 2014-17 “supported
by broadly sound macroeconomic policies,
resilient domestic demand and a progressive
recovery of economic activity in the Oecd area,”
according to Mia.
Although the experts consulted for this
article agree that regional economy will barely
grow around three percent this year, and that
it will gain some pace in 2014, their GDP
forecasts for next year show a wide dispersion.
Th ese range from 3.2 percent to 3.8 percent,
with the International Monetary Fund’s re-
cently revised forecast appearing in the middle
at 3.4 percent.
According to analysts, prevailing weaknesses
in Europe, the gradual ending of the monetary
expansion in the U.S., and the deceleration
in China would be the main factors play-
ing against Latin American growth in 2014,
whereas the region would benefi t from the
continued expansion of domestic demand.
BRAZIL AND MEXICO, THE TALE OF TWO COUNTRIESTh e short-term outlook for Brazil remains
clouded by the hit in confi dence brought about
by recent demonstrations of social unrest. Tight
monetary policy to curb infl ation would also
hamper economic growth in coming months.
Even so, the consensus is that after a modest
2.5 percent this year, GDP growth would lift to
3.3 percent in 2014, underpinned by domestic
demand, including fi scal stimulus and private
participation in infrastructure concessions.
Although the government must still over-
come obstacles before the concessions program
fi nally takes off , “if successful, they (the conces-
sions) will boost confi dence, favoring invest-
ment and increasing economic growth, princi-
pally from 2015, whereas 2014 will be a transi-
tion year,” says Ilan Goldfajn, chief economist
How will the prevailing weaknesses in Europe, the gradual
ending of the monetary expansion in the U.S., the deceleration
in China, and the growth in domestic demand play in the
region? A look at what is to be expected for Latin American
economies in 2014.
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at Itau Unibanco. He and other economists
agree that the political cycle will hamper fi scal
consolidation and privilege economic growth
over infl ation. In the longer run, experts say,
Brazil must improve its policy framework in
order to make the country more competitive.
In the meantime, after disappointing per-
formance in the fi rst half of 2013 – partly
explained by falling terms of trade and slow
government spending associated to the politi-
cal cycle – the Mexican economy will probably
gain speed in the months to come and grow
by 3.8 percent in 2014, up from 2.9 percent
in 2013. According to Gabriel Lozano, chief
Mexico economist at JP Morgan, the ongoing
recovery in the U.S. will support domestic in-
dustrial output and remittances from Mexican
workers, whereas structural reforms would have
positive eff ect on confi dence and permanent
eff ects on various areas, such as infrastructure,
manufacturing and energy.
“Th e reforms would have a multiplier eff ect
that could take the Mexican GDP to expand
close to fi ve percent a year in the long run. Ac-
counting for the energy-sector reform alone,
the economy could grow each year by an addi-
tional 0.5 percentage point above its long-term
potential (3.5 percent),” Lozano adds. His basic
assumption is that congress will keep the basic
scope of the reforms, amid political and social
controversy.
ANDEANS, GROWING FASTERGrowth in Chile will remain in the 4.5 percent
area in 2014 amid fi scal and external stabil-
ity. Infl ation could increase slightly, chiefl y
in response to currency depreciation, but will
remain within the central bank’s range. Re-
garding the upcoming presidential elections,
Alberto Bernal, head of research at Bulltick
Capital Markets, has little doubt that Michelle
Bachelet will be the victor. He further adds:
“the political cycle has little to no relevance in
Chile because traditionally the risk of structural
economic changes following a change in gov-
ernment is minimum.”
Bernal also believes that risks for signifi cant
policy changes following next year’s presiden-
tial elections in Colombia are small. However,
he does not discard that a left-wing (populist)
candidate could broaden his/her support base
in case that voters become disenchanted by
potential confrontation between leading candi-
dates to the right of the spectrum - including
the incumbent president, Juan Manuel Santos,
BETTERBUT NOT THE BEST
86 LATIN TRADE SEPTEMBER-OCTOBER 2013
FINANCE: FORECAST 2014
and his potential rival from the ranks of former
president Alvaro Uribe. In any event, partly re-
fl ecting statistical factors but also in hand with
infrastructure investments, Colombia’s GDP
would probably expand by 4.5 percent in 2014.
Infrastructure spending will also play a role
in supporting economic dynamism in Panama
and Peru next year, although the expansion
of domestic consumption will provide an ad-
ditional stimulus in the latter country, where
GDP should keep growing close to six percent.
Panama’s economic impetus will moderate
slightly in 2014, but the GDP will still grow by
a healthy 7.7 percent, according to the analysts’
consensus. Growth in Uruguay would also
exceed the Latin American average next year.
ARGENTINA AND VENEZUELA, LITTLE PROGRESSAfter being one of the few Latin American
economies experiencing a recession in 2013,
the Venezuelan GDP would probably grow by
a meager two percent in 2014, based largely on
statistical eff ects. Experts agree that a new de-
valuation will be required “in order to keep the
patient alive,” as Bernal put it.
In the meantime, analysts’ estimates on
Argentina’s GDP growth in 2013 and 2014
show signifi cant dispersion, ranging from 2.5
to 4.3 percent, and from one to 3.5 percent,
respectively, at least refl ecting agreement on
a slowdown. Experts expect, however, that
the outcome of the early-August elections
could lead the Argentinean government to
introduce more pro-business policies, thus
favoring future growth.
David Ramirez reported from Miami. PH
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2013 2014 2013 2014 2013 2014
GDP growth 3.3 2.7 2.5 3.3 4.6 4.6
Infl ation (yearend) 15.0 15.7 5.8 5.8 2.5 2.9
Unemployment rate (yearend) 7.4 7.4 5.7 5.7 6.7 6.9
Combined fi scal defi cit / GDP -2.5 -2.3 -2.9 -3.1 0.0 0.1
Current account / GDP 0.1 -0.3 -3.2 -3.3 -4.5 -4.4
Yearend exchange rate 5.9 7.1 2.1 2.2 503.3 514.1
2013 2014 2013 2014 2013 2014
GDP growth 5.9 5.9 3.9 4.1 -0.6 1.9
Infl ation (yearend) 2.4 2.3 7.3 6.7 34.8 28.9
Unemployment rate (yearend) 6.9 6.8 7.2 6.6 8.8 8.7
Combined fi scal defi cit / GDP 0.6 0.3 -1.6 -1.6 -8.8 -6.5
Current account / GDP -4.5 -4.4 -3.2 -2.3 4.8 5.0
Yearend exchange rate 2.2 2.2 20.1 20.8 6.5 8.3
2013 2014 2013 2014 2013 2014
GDP growth 4.1 4.5 2.9 3.8 8.1 7.7
Infl ation (yearend) 2.6 3.1 3.7 3.4 4.3 4.1
Unemployment rate (yearend) 9.9 9.6 4.3 4.1 4.1 4.1
Combined fi scal defi cit / GDP -1.6 -1.5 -1.9 -1.8 n/a n/a
Current account / GDP -3.5 -3.3 -1.3 -1.4 -9.4 -8.5
Yearend exchange rate 1899.0 1890.6 7.4 7.3 1.0 1.0
ARGENTINA BRAZIL CHILE
PERU URUGUAY VENEZUELA
COLOMBIA MEXICO PANAMA
Sources: Bulltick, BBVA, Economist Intelligence Unit, HSBC, IMF, UBSCalculations: Latin Trade. Calculations correspond to simple average of data provided by sources
LATIN AMERICA FORECAST 2013-2014
Forecasts for the region for next year range from 3.2 percent to 3.8 percent, with the IMF’s recently revised forecast appearing in the middle at 3.4 percent.
OIL AND GAS: PDVSA
88 LATIN TRADE SEPTEMBER-OCTOBER 2013
BY ALVARO MORENO
RANKING: THE 25 MOST POWERFUL WOMEN
“Thirty years after women began to represent 50 percent of the
higher education graduates in the United States, men continue
to occupy the vast majority of leadership positions in government and
industry.” Th is is perhaps one of the most poignant sentences in Lean In,
the bestselling book published by Sheryl Sandberg last March.
Th e popularity of the book is due in large part to what Sandberg
recounts in her personal story as chief operating offi cer (COO) of
Facebook, a position that had never before been held by a woman, and
to which the executive rose following a transformational experience, as
much personal as corporate at Google, where she had previously worked.
Today, many voices have joined with Sandberg to demand that the
gender balance in corporate leadership become equalized. Also, it’s now
more common to fi nd men who assume that the tasks around the home
are a joint obligation, in place of the traditional vision, that it was mainly
a female responsibility in family aff airs.
Even so, the statistics reveal an inconvenient truth. In the Unit-
ed States, only 16.6 percent of the members of boards of directors
of the companies listed in the Fortune 500 are women. Worse, just
21 chief executive offi cers (CEOs) of the 500 largest American
companies are women.
Globally, the truth is even more inconvenient: only 12 CEOs of the
500 largest companies in the world (Fortune 500 Global) are women.
In Latin America, the situation is just as bad: only 12 presidents of the
Latin 500 are women (2.4 percent).
Analyzing the stories of the women who have reached the C-level is
important to help smooth the way for other Latin American women.
With this in mind, we present below the cases of the 25 most powerful
women in the region’s business community.
Th e fi rst of these is without a doubt the most meritorious of all. She is
the head of the largest company in Latin America, Petrobas: Maria das
Gracas Silva Foster. Th is Brazilian woman had a very diffi cult youth. She
was born and lived in the Complexo do Alemao, a favela on the outskirts
of Rio de Janeiro, until she was 12 years old. But, this didn’t stop her from
studying chemical engineering at the Universidad Federal Fluminense,
followed by a post-graduate degree in nuclear engineering at the Univer-
sidad Federal do Rio de Janeiro, and an MBA from Fundacao Getulio
Vargas. She started her professional career at Petrobas when she was very
young, joining the company as an intern in 1978, where she occupied
various positions. Before becoming CEO of the Brazilian giant, she held
important positions in the public sector, where she worked closely with
Dilma Rousseff , the current president of Brazil, who at that time was the
minister of energy under former president Luiz Inacio Lula da Silva.
Th e second most important woman in Latin American business is
Indra K. Nooyi, President of PepsiCo. She is responsible for Latin
American operations of the multinational, which occupies 74th place in
the Latin 500. Nooyi was born in India, where she began her profession-
al career at Johnson & Johnson after obtaining her undergraduate degree
at Madras Christian College. After completing her MBA at the Indian
Institute of Management Calcutta, and a master of public and private
administration at Yale University, she worked for several companies in
the United States. She joined PepsiCo in 1994, and after occupying sev-
eral positions, she became president in 2007.
Th ird place is also occupied by a Brazilian. She is Claudia Sender,
president of TAM (number 89 in the Latin 500). Previously, Sender had
Th e 25 most important women in the Latin American business community.
THE WOMEN AT THE TOP
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CEO of Brazil’s state oil company Petrobras, Maria das Gracas Silva Foster
Sectors with the biggest growth opportunities are:
In Latin America
78% of the SMEs believe that global trade has been beneficial for their business.
SMEs are optimistic on the prospect of exports growth over the next 12 monthsMainly with other countries of Latin America and also with North America and Asia-Pacific.
Priorities that need to
improve to increase foreign trade in Latin America:
®
®
Economy Climate and Global Trade in Latin America
of SMEs
The sixth edition of the Business Monitor Latin America (BMLA), commissioned by UPS and conducted by TNS Gallup,
provides new insights, attitudes and habits of more than 800 business leaders of small and medium size
enterprises (SMEs) in Argentina, Brazil, Chile, Colombia, Costa Rica,
Dominican Republic and Mexico.
The study takes the pulse of the SMEs by identifying their priorities and
needs as well as their main concerns and obstacles they face. The goal is to provide a better understanding of the motivations behind business decisions
leaders in Latin America. The report has interesting fi ndings that will help SME executives have a better perspective
of how to run their business and engage in international trade.
SPECIAL ADVERTISING FEATURE
90 LATIN TRADE SEPTEMBER-OCTOBER 2013
RANKING: THE 25 MOST POWERFUL WOMEN
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been vice-president of marketing at Whirlpool, where she worked for
seven years. She is a chemical engineer, having received her undergradu-
ate degree at the Escuela Politecnica de la Universidad de Sao Paulo, and
an MBA from Harvard Business School.
A Colombian occupies the fourth spot: Sylvia Escovar Gomez, presi-
dent of Terpel, the country’s biggest fuel distributor and number 101 in
the Latin 500. Escovar has been with Terpel for 10 years and has occupied
several positions there. Professionally, she has been in the public sector,
in institutions such as the Banco de la Republica and the secretariats of
fi nance and education in Bogota. She has also worked at the World Bank.
She is an economist from the Universidad de Los Andes and earned a
post-graduate degree in advanced econometrics at the Sorbonne.
Rounding out the top fi ve is another Brazilian, Solange Maria Pinto
Ribeiro, CEO of Neoenergia (104 on the Latin 500). Pinto Ribeiro is
also a member of the executive board of an important number of energy
companies in Brazil, including la Companhia Energetica de Penambuco
and the Companhia Energetica do Rio Grande do Norte. She studied
electrical engineering at the Universidad Federal de Pernambuco and has
a master’s degree in electrical engineering from the Pontifi cia Universi-
dade Catolica do Rio de Janeiro.
A Brazilian also owns the sixth position. She is Dilma Seli Pena, pres-
ident of the water distribution company Sabesp (112 on the Latin 500).
She got her undergraduate degree in geography at the Universidade de
Brasilia and obtained a master of public administration from the Funda-
cao Getulio Vargas Foundation. Seli Pena has written articles, texts and
other books on drainage, water and planning.
Sherilyn S. McCoy, an American, occupies the seventh spot on the
list. She is the CEO of Avon, a company whose importance in the re-
gion lands it at number 118 of the Latin 500, and with its multi-layered
sales force, is one of the region’s biggest employers. McCoy completed
Sylvia Escovar Gomez, president of Terpel
Claudia Sender, president of TAM
her undergraduate studies at Textile Chemical at the University of Mas-
sachusetts, and has a master’s in chemical engineering from Princeton
University, and an MBA from Rutgers University. She has four patents
registered in her name.
Mexico’s fi rst representative on the list is in eighth place: Paula Santilli,
who is CEO of PepsiCo in Mexico (146 in the Latin 500). Th e daughter
of Horacio Santilli, who was a well-known executive of multinational
companies in diff erent countries throughout the region, she was previously
president of PepsiCo in Argentina and in Chile. Santilli has said publicly
that she favors a policy of gender diversity in organizations, where men
and women have the same opportunity to rise to senior positions and have
matching responsibilities.
Luiza Helena Trajano Inacio Rodrigues is another Brazilian, appear-
ing in the ninth position on the list. She is the CEO of Magazine Luiza
(155 of the Latin 500). Trajano converted Magazine Luiza, a family
company, into a holding with 350 locations, with businesses that include
real estate, credit and insurance, after radically changing the focus of
business management, starting with the demolition of the dividing walls
and panels so she could get closer to her personnel.
Completing the top 10 is another Brazilian, Anna Christina Ramos
Saicali, CEO of B2W Varejo (240 on the Latin 500). Ramos Saicali did
her undergraduate degree in the arts at the Universidad Presbiteriana
Mackenzie, then a post-graduate degree in art and education at the
Universidad de Sao Paulo, and completed the management program at
Harvard Business School.
Th e 11th spot belongs to an Argentine who was born in Brazil and
is CEO of General Motors in Argentina (315 of the Latin 500): Isela
Constantini. She studied communications at the Universidad Catolica
Pontifi cia de Parana and obtained an MBA from Loyola University.
OIL AND GAS: PDVSA
92 LATIN TRADE SEPTEMBER-OCTOBER 2013
RANKING: THE 25 MOST POWERFUL WOMEN
Th e second Colombian to make the ranking occupies number 12:
Sandra Stella Fonseca, president of the Empresa de Energia de Bogota
(463 of the Latin 500). Fonseca is an electrical engineer from the Escuela
Colombiana de Ingenieria, and has a master’s in energy studies from the
Sheffi eld Hallam University, plus an MBA in industrial management
from the same university.
Another American makes the list: Grace Lieblein, the fi rst non-CEO
in this compendium, who occupies number 13 because she is vice-
president of the General Motors global supply chain, company 26 of the
Latin 500. She also has other links to the region. Lieblein was previously
CEO of General Motors in Brazil and also in Mexico, and is an indus-
trial engineer who graduated from Kettering University. She obtained an
MBA from Michigan State University.
In 14th place is a person who could easily be the best-known busi-
nesswoman in her country, the Mexican Maria Asuncion Aramburu-
zabala, vice-chairman of the board of directors and former owner of
Grupo Modelo (76 of the Latin 500). Currently, she is CEO of Tresalia
Capital. She is an accountant who obtained her degree from the Insti-
tuto Tecnologico Autonomo de Mexico and the granddaughter of Felix
Aramburuzabala, who founded of Grupo Modelo in 1955. She has been
vice-chairman since her father died.
Th e fi rst Chilean to make the list, at number 15, is another heiress,
Iris Fontbona, widow of the infl uential Chilean businessman of Croatian
origin, Andronico Luksic Abaroa. Today, Fontbona controls Antofagasta
(88 on the Latin 500), and is the majority shareholder of Quiñenco (168
on the Latin 500).
Marcela Drehmer is in 16th place. Less than three months ago, she
became CFO of the Brazilian fi rm Odebrecht (76 on the Latin 500).
Grace Lieblein, vice-president of the General Motors global supply chain
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Drehmer took part in the Credit Suisse First Boston’s Corporate Fi-
nance Internship Program in New York, after having done her under-
graduate work in company management at the Universidade Salvador
and post-graduate work in fi nance at Ibmec.
Adriana Machado of Brazil occupies 17th place. She is the
CEO of General Electric in Brazil. Machado studied political
science at the Universidade de Brasilia, and in December 2011,
became the fi rst woman in the history of GE Brazil to direct the
business of the company.
A similar case is that of executive number 18 of the list, the Mexican
Gabriela Hernandez Cardoso, CEO of GE Mexico, company number
42 for sales in that country. Hernandez encourages the participation of
women in her company because she is convinced of the value of diversity,
and for this reason she participates in the internal networking program
for women, where participants are trained and assessed to help them
move forward in their careers.
Another Mexican who makes the list, in 19th place, is Carmina Maria
Abad Sanchez, general director and chairman of the board of MetLife
in Mexico (company number 58 in Mexico for sales). Abad Sanchez is
convinced that the presence of women in business is growing, along with
equality of opportunities, and believes that its true value lies in the diversi-
fi ed points of view.
Maria Ines de Lafuente Lacroze, who occupies 20th place, is one
of the richest businesswomen in Argentina. Her fortune comes from
selling the family business, Loma Negra, the biggest cement com-
pany in Argentina, which her mother, Amalia Lacroze Fortabat, ran
for 25 years.
Another Argentine heiress, Edith Rodriguez de Rey, occupies the 21st
spot. She is the widow of Luis Alberto Rey, the founder of Pluspetrol,
one of the last oil companies to be wholly owned by Argentines.
In 22nd place is the fi rst Venezuelan on the list and one of the best-
known women in the country, Adriana Cisneros de Griffi n, vice-presi-
dent of the management committee of Grupo Cisneros. She is the most
famous representative of this business-oriented family of communication
media, where she is from the third generation.
Another Colombian, in 23rd place, is Sol Beatriz Arango, president
of Servicios Nutresa, a new platform in the business model of Grupo
Nutresa (196 in the Latin 500). Arango is also director of the foundation
this food group has established. Its aim is to develop socially responsible
activities in education and nutrition.
Mariela Garcia de Fabbri is the fi rst Peruvian to make this list, in 24th
place. She is the general manager of Ferreyros. Garcia has worked for
more than 20 years in this company, which is thought to be the largest
marketer of capital goods in Peru. She has worked as treasurer, manager
of fi nances and assistant general manager.
In 25th place is the fi rst Ecuadorian on the list, Isabel Noboa, CEO
of Consorcio Nobis. Noboa is the founder of this company, one of the
largest in Ecuador, with businesses in the real estate, health, tourism and
manufacturing sectors. Consorcio Nobis has more than 8,000 employees
and reported revenues of more than $600 million in 2012. Like Arango
of Nutresa, Noboa has managed a social responsibility foundation, Fun-
dacion Nobis, since 2001.
Alvaro Moreno reported from Miami.
OIL AND GAS: PDVSA
94 LATIN TRADE SEPTEMBER-OCTOBER 2013
BY MARK CHESNUT
ON THE ROAD
With travelers from North America on the
decline, duty-free retailers and suppliers
in Latin America are vying for their atten-
tion, even as they ride a local wave of increased
spending power among consumers who live
within the region. To negotiate this tricky situ-
ation, businesses are introducing larger retail
spaces, new marketing techniques and a wider
array of products.
From one angle, sales trends are positive,
according to Manuel Montico, the general
manager for the Montevideo offi ce of Grupo
Wisa, the Panama-based travel retailer. “Th e
global travel retail market in Latin America
has been growing almost continuously over the
past 10 years, except for a slight contraction
experienced in the year 2008 due to, among
other factors, the crisis created after the fall
of Lehman in the United States ,” he said. “It
shows signs of strength to continue growing
for at least the next fi ve years.”
Montico’s very presence in Montevideo is
proof of Grupo Wisa’s expansion plans. Th e
company, which until last year operated solely
in Mexico, Panama and Colombia (including
a new La Riviera-branded duty-free shop at
El Dorado International Airport in Bogota), is
now making a major push to create a duty-free
presence in the Southern Cone — focused, for
now, mostly on border shops in Uruguay, near
the Brazilian border.
According to Jose Luis Donagaray, secretary
general of the Asociación Sudamericana de
Tiendas Libres (Asutil), duty-free sales in the
region are up nine percent for the fi rst four
months of 2013 compared to the same period
in 2012, while registration at their annual con-
ference — which took place in June in Punta
Cana, Dominican Republic — jumped by 80
delegates from the year before, to 360.
Fast-growing Latin American economies
— which results in more people traveling
and spending money in airports — is fueling
duty-free sales, according to Joe Arellano, vice
president for Latin America and duty free at
Patron Spirits, which markets tequila products
in the region. “One of the biggest factors driv-
ing growth in Latin America is the emerging
affl uent middle class, especially in countries
such as Colombia and Brazil,” he explained.
“Consumer purchasing power is increasing
in many Latin American countries, and for a
high-quality luxury brand like Patron, that has
a very real eff ect on our business – with more
money to spend, people are increasingly seek-
ing aff ordable luxuries.”
THE CHALLENGESIt’s not all good news in the duty-free aisle.
Th e “unfavorable side eff ect” of the region’s
economic growth, according to Montico, is
that there are fewer potential customers ar-
Latin America’s duty-free market evolves, as economic and
retail realities hit the industry.
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riving from outside of Latin America. “Th e
region has become relatively more expensive
compared to the rest of the world, and that
means that another engine of regional growth,
tourism, is going through a complicated period,
with fewer passengers from Europe and the
U.S., and therefore a signifi cantly lower level of
spending,” he said. “Today, Sao Paulo is more
expensive than Paris, and vacationing in Punta
del Este is considerably more expensive than
Miami. Given this reality, we have to be very
creative to grow our sales with the few clients
coming from outside the region.”
Th ere seem to be other challenges. “Like
all parts of the world, Latin America is facing
three primary challenges,” according to Anna
Szentivanyi, the Zurich-based manager of
customer marketing at Mondelez World Travel
Retail, a division of snack giant Mondelez
International, which owns brands including
Cadbury, Milka and Toblerone. “Th e fi rst of
these is that not enough travelers are going into
duty free stores. In large international travel
hubs, 52 percent aren’t choosing to enter travel
retail stores, and this fi gure can be higher in
other places, with reasons ranging from being
in a rush to not having a specifi c need or not
fi nding the store appealing enough.”
Szentivanyi, who spoke at this year’s Asutil
conference about confectionery duty-free
growth in Latin America, added that traveler
spending habits are also problematic. “Even
when travelers are tempted in store, the second
problem is that they are not spending enough,”
she said. “Research highlights that 71 percent
only buy items from a single category and 67
percent only purchase a pre-planned item.
Th ere is clearly more that needs to be done to
tempt shoppers to make impulse purchases
en route to the cash till. Th e third challenge is
that travelers don’t return to the stores often
enough. Our surveys show that 69 percent of
shoppers visit and buy from duty-free stores
only “sometimes” or “rarely,” with shopper feed-
back citing confusing store layouts and an over-
abundance of products on the shelves making
it diffi cult to fi nd items when time is limited.
GROWTH STRATEGIESTh e goal, according to Montico, is to make
sales increase outpace passenger growth in each
of the airports in which Grupo Wisa operates.
Th e company uses a variety of methods to drive
traffi c and sales, including loyalty program
promotions, e-mail marketing and live events.
DUTY-FREE: GROWTH, CHALLENGES AND CHANGE
96 LATIN TRADE SEPTEMBER-OCTOBER 2013
ON THE ROAD
“La Riviera has developed strategic alliances
in some airports with VIP lounge operators,
to bring master watch experts from the most
famous Swiss brands, and to off er talks about
the technical performance of their products,”
he said. “Th e response to this type of direct
marketing is highly effi cient; fi ve or six watches
may be sold in one afternoon, whereas the
monthly average may be 10 units.”
Montico said that overall, the trend in newer
and recently renovated airports is to allow
fewer duty-free shops, but to make each one
larger. “You now have bigger [duty-free retail]
spaces at the airport, but with just one or two
operators,” he noted. “Not like you used to have
in Panama.”
An additional recent example: Th is year,
Motta Internacional, through its Attenza duty-
free brand, was named the exclusive operator
of duty-free stores in Ecuador’s new Mariscal
Sucre International Airport.
Individual suppliers, meanwhile, are getting
creative in marketing their products. Th is year,
Luxottica Travel Retail partnered with Duty
Free Uruguay to open a pop-up sunglass shop
at the Montevideo airport, which reportedly
resulted in a 70 percent increase in sales.
“Th ere is no doubt that pop-up shops and
other activities outside the main duty-free store
can create engagement and drive incremental
sales, as they reach those travelers who don’t
go in to the duty free store,” said Szentivanyi.
“Whenever we run such events, we try to come
up with a way of motivating travelers to enter
the main store too, because that’s the way to get
a greater benefi t for the total market.”
Szentivanyi said that a major goal for any
duty-free retailer should be to improve the
appeal of the consumer shopping experience.
“At Mondelez WTR, we believe we need to
change the industry’s mindset and together
become more traveler-centric, in a bid to drive
the right action for each location,” she said.
“Th is is why we’ve held over 30 senior level
meetings with key travel retail partners in the
last year, sharing our category vision with them
and prompting ideas for enhancing the travel
retail environment.”
BRAND FOCUSSeveral suppliers are increasing their focus on
the duty-free market segment, as part of their
overall sales and marketing strategy. Heineken,
for example, created a new duty-free sales man-
ager position for Latin America this year, while
Montblanc has shifted responsibility for the
region from Hamburg to its Miami offi ce, to
be closer to the market.
Patron Spirits has also dedicated more re-
sources to the Latin America duty-free market.
“Th e duty-free channel and the domestic mar-
ket complement each other – that has always
been our strategy and approach to duty free,”
said Arellano. “In the early days, our top prior-
ity was to open distribution, and now that our
distribution is at a mature level, our strategy has
evolved into an emphasis on in-store activa-
tion and promotion, and consumer education.
To help do that, we’ve brought on a dedicated
resource – a member of our international team
who is solely dedicated to the Latin America
duty-free channel.”
Also eying expansion in Latin America is
Mexico-based Fraternity Spirits, which has
found Colombia, Chile and Peru among the
most receptive regions for its tequila brands,
according to Raff aele Berardi, the company’s
CEO. He said that the company is now look-
ing at Brazil, adding that “the challenge is that
it’s one of the major markets where we have
not yet found the right local partner,” he said.
“It’s a more challenging market because of the
size for distribution.”
Porton, the Peruvian pisco brand, is also
looking beyond borders. Th e brand is currently
featured in three duty-free stores at Lima’s
international airport, but the goal is to move it
beyond the Peruvian border; company offi cials
are currently negotiating availability in Chile.
“Th e Latin America duty-free market is crucial
for Porton, as we are a Peruvian brand estab-
lished, in just 2.5 years, as an ultra-premium,
quality brand in the Peruvian market,” said
Brent Kallop, Porton’s president. “Th e oppor-
tunity to expand to other duty-free markets
is important and is a huge part of our growth
strategy in the coming years. As we open dis-
tribution in other countries, we will attempt
to negotiate the possibility of Porton being
carried in those airports, but want to ensure the
product and messaging is well known before
emerging in the duty-free space.”
Mondelez International recently added a
new member to its Latin America sales team,
and has introduced a new category to its Latin
America duty-free portfolio: chewing gum
— namely, the Trident brand. “Latin America
is the key driver of the high growth we are
experiencing in Americas duty-free revenues,
and plays a big part in the leading position we
have achieved in terms of sales value market
share, which was 19.3 percent last year,” said
Szentivanyi.
“While key challenges are consistent across
all regions, there are some regional-specifi c
characteristics in Latin America that we have
to take into account in our strategy,” Szen-
tivanyi added. “In many other parts of the
world, for instance, airport shops are the largest
channel, whereas in the Americas there’s more
diversity, with airport shops accounting for 37
percent of sales and other channels for 58 per-
cent.” Other channels include mainly border
stores, downtown duty-free and diplomatic
stores. Border stores are signifi cant in Latin
America. She also pointed at the importance
of Brazilians in regional travel. ”We see a share
of the traditional traveling nationalities in the
region, but Brazilian travelers make up the big-
gest number.”
Mark Chesnut reported from New York. PH
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LT CFO BOGOTA
98 LATIN TRADE SEPTEMBER-OCTOBER 2013
Raúl Jimenez,Finance Director- Beauty and Grooming Categories, Procter & Gamble Latin America; Rocio Vargas, Financial Manager, Procter & Gamble Latin America;
Carlos Andres Hleap, Finance Director, Diageo Colombia
Emilio Fortou, Global Commercial Expansion Team Latin America & Caribbean Region, Visa, Inc.; Kathryn Rooney Vera, Director and Partner, Macroeconomic Research, Bulltick Capital Markets; Mark Ludwig, Contributor Editor, LT CFO;Beatriz Dager, Partner, Deloitte; Victor Traverso, Director Representative in
Colombia, CAF
With a swift acquisition process,
Grupo Sura became the
largest pension savings manager in
Latin America. For his involvement
in that process, Andres Bernal
Correa, head of Sura Asset Man-
agement was named Latin Trade
CFO of the Year Colombia. The
award was presented at the CFO
event held in July at the JW Mar-
riott Hotel Bogota. Andres Bernal
gave the audience a description of
these audacious operations, which
relied heavily on equity financing
and innovative structuring.
There is an abrupt end to the
love affair between investors
and emerging markets, caused
by the expected drop in world
liquidity, said Kathryn Rooney
Vera, macroeconomic strategist
and partner at Bulltick Capital
Markets. However, a sudden
increase in interest rates in
the U.S., and a drop in capital
flows to the region will not
trigger another Latin disaster
like the Tequila Crisis in 1994.
Even more, a hard landing in
China would have a smaller
effect on Latin America now
than a year and a half ago, she
added. Over the next months,
she sees investors shying away
from Brazil and moving into
Colombia and Mexico.
On the topic of the new role
of the CFO, Beatriz Dager, CEO
of Deloitte Colombia, remarked
that the financial executive should
be a catalyst in the organization,
to generate behaviors that pro-
mote the achievement of financial
goals. On its role of cost manag-
ers, Juan Felipe Gomez, vice
president of finance at SAP Latin
America said that CFOs should
try to induce decision makers
within the company to always
think about financial goals. PH
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CONNECTING LATIN AMERICA’S CFO COMMUNITY
LESSONS FROM A CFO
Andres Bernal, VP Finance and Strategy Dev/CFO, Sura Assets Management
Aquiles Rico, Solutions Specialist, SAP Latin America; Carlos Eduardo Botero Madera, Finance Director, Productors Naturales de la Sabana; Bolivar Arosemena, Head of
Sales Latin America/Caribbean Region AETNA Intl
Jorge Hernan Jaramillo Ossa, President, Deposito Centralizado De Valores de Colombia; Juan Pablo Cuevas, Managing Director, Head of
Global Transaction Services, Latin America and the Caribbean, Bank of America Merrill Lynch
Javier Diaz Fajardo, Commercial Vice President,
Bolsa de Valores de Colombia
Hernán Humberto Herrera Echeverri Ph. D. Director Master In Financial Administration Universidad EAFIT
LT CFO SÃO PAULO
100 LATIN TRADE SEPTEMBER-OCTOBER 2013
The “wondrous decade” that has just passed, marked by economic growth
and poverty reduction, may now come to an end, said the CAF’s direc-
tor representative in Brazil, Moira Paz-Estenssoro. The reason is that this
success mainly came from the export of commodities. To make progress
sustainable, much greater effort needs to be placed on investment in infra-
structure and education. Technology, innovation and SME development
must gain a place on the region’s agenda, she said.
This was one of the conclusions of the CFO Event hosted by Latin
Trade on August 13 at the Hotel Tivoli in Sao Paulo. A group of 50 CFOs
exchanged views on the current Brazilian economic situation and discussed
challenges faced by finance executives.
David Beker, chief Brazil economist at Bank of America Merrill Lynch
Global Research, fears that there will be a dip in investment as investors
hold back or even retreat, as the October 2014 elections get closer. He ex-
pects GDP growth to be just two percent this year, and inflation 5.6 percent.
Zero based budgeting (ZBB) was another topic of discussion at the event.
The merits of this method were advocated by various participants. “It makes
you think differently,” said Rodrigo Neaime, head of operations and finance,
Gallo Worldwide. He praised it as an efficient tool to cut costs.
Eneas Pestana, CEO of the Pão de Açúcar Group, the largest retailer in
Brazil, delivered the keynote address. He gave proof of why a CFO has a clear
advantage on the race to become a CEO. In a nutshell, he has all the informa-
tion. Eneas himself was CFO before becoming the head of the retailer.
Thierry Ogier reported from Sao Paulo. Santiago Gutierrez from Miami. PH
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CONNECTING LATIN AMERICA’S CFO COMMUNITY
THE ROAD AHEAD
Claiton Clivati Camargo, Finance Director, Lexmark International do Brasil; Igor Miotto, Finance Director, Bull Latin America; Eber Coelho, CFO, Artsana Brasil;
Milton Brandt, Finance Director, Unilever Brasil
Moira Paz-Estenssoro, Director Representative, CAF Brasil; Juan Pablo Cuevas, Head of Global Transaction Services,
Latin America and the Caribbean, Bank of America Merrill Lynch
Enéas Pestana, Chief Executive Offi cer, Grupo Pão de Açúcar
Luis Emilio Fortou, Global Commercial Expansion Team, Latin America and
Caribbean Region, Visa Inc.
Edson Silva, General Manager, Firmenich; Rodrigo Neaime, Head
of Operations and Finance, Gallo Worldwide
Sandro Freitas, Financial Director, Discovery Networks Brazil; Amit Singhi, CFI, Ford; Genilson Melo, CFO, Copersucar; Cristiano Furtado, CFO, Marsh
Fernando Lewis, Vice President of Business Development and Operations, SAP Brasil; Flavia Lauletta, Branking and Insurance Marketing Coordinator, SAP Brasil;
Jose Maria Pessoa, Commercial Director, SAP Brasil