latin trade (english edition) - sept/oct 2013

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

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


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.


Santiago Gutiérrez,

Executive Editor

[email protected]

EDITOR’S LETTER

LEADERSHIPTHE KEY TO GROWTH

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77

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


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

Senior Marketing Associate: Rosemary Begg: [email protected]

OFFICE MANAGER & CIRCULATION

Claudia Banegas

Latin Trade Group

CHAIRMAN

Richard Burns

CHIEF OPERATING OFFICER

Joanne Harras

ACCOUNTS MANAGER

Kathy Pollyea, [email protected]

Latin Trade Group is a division of Miami Media, LLC, an affiliate of Isis Venture Partners

Executive, Editorial, Circulation and Advertising offi ces are located at:75 Valencia Avenue, Suite 1000, Coral Gables, Florida 33134-6135, USA.

CUSTOMER SERVICE AND SUBSCRIPTIONS: Please visit www.latintrade.com to order online or call +1 (305) 749-0880. Latin Trade (ISSN 1087-0857, USPS 016715) is published bimonthly, with editions in English

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Are you losing valuable time looking for data and analysis on Latin America and the Caribbean?

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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


FIVE SECTORS COULD

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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

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Energy Trade Big data Infrastructure Talent

REFORMAS ESTRUCTURALES


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.

[email protected]

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


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


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.”

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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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OTTO PEREZ MOLINA PRESIDENT OF GUATEMALA

LEADER OF THE YEAR

SEPTEMBER-OCTOBER 2013 LATIN TRADE 27

BRAVO BUSINESS

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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MARIA DAS GRAÇAS SILVA FOSTERCEO, PETROBRAS

LIFETIME ACHIEVEMENT


BRAVO BUSINESS

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


ÁLVARO FERNÁNDEZ GARZA CEO, ALFA

CEO OF THE YEAR


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


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GERMAN EFROMOVICHCEO, SYNERGY GROUP

INNOVATIVE CEO OF THE YEAR


BRAVO BUSINESS

AWARDS 2013GERMAN EFROMOVICH

Midas touch


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


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.


THE GOODYEAR TIRE & RUBBER COMPANY ACCEPTED BY JAIME SZULC, PRESIDENT, GOODYEAR, LATIN AMERICA REGION

TRADE AMERICAS BRAVO AWARD


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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MAGALIE DRESSEPRESIDENT, CARIBBEAN CRAFT

INNOVATIVE

SOCIAL SUSTAINABILITY


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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MARINA SILVA, FORMER SENATOR OF BRAZIL AND DIRECTOROF THE INSTITUTE OF DEMOCRACY AND SUSTAINABILITY

DISTINGUISHED SERVICE IN

THE HEMISPHERE AWARD


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


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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ION

THE IDEAL HOTEL BRAND FOR the emerging class ofTRAVELERS IN LATIN AMERICA


Latin America is a key emerging market for the travel and hospitality industry, as the region’s recent economic growth has spurred a rapidly emerging middle-class of literally millions of individuals.

A recent World Bank report notes that the middle class in Latin America and the Caribbean grew by 50% over the past decade, amounting to an increase of more than 150 million people. In Brazil alone, a staggering 40 million were added to the middle class between 2004 and 2010.

The economic engine that has generated such growth has allowed for more business and leisure travel within the region. As a result, there has been an increase in demand for quality hotel brands that meet the needs of this breed of travelers.

The rapidly expanding Holiday Inn® Brand Family of properties in the region, part of the IHG portfolio and known as the leading midscale hotel brand, is ideally positioned to meet the expectations of the evolving traveler. In order to remain connected to its audience, the brand kicked off an unprecedented evolution in 2007, a global refresh of the brand, which included new brand, service and quality standards – all for the single purpose of encouraging the evolving traveler to take a fresh look at Holiday Inn and remain attractive to this younger generation. As travelers’ expectations continue to grow, Holiday Inn will continuously evolve to enhance guests’ experience and provide them with a great value.

Traditionally, businesses have focused in the upper tier of the region’s 600 million-plus consumers. The new middle class is estimated to be in the 200 million range, and has been traditionally non-traveling. That is rapidly changing. This new class of travelers, due to social media and the myriad of informational tools on the Internet, tends to be younger and tech savvy, hence the appeal of IHG’s mid-scale Holiday Inn®.

IHG’s overall strategy to engage customers throughout their guest journey, both personally and through technology, has generated tremendous brand loyalty. The emerging traveler expects hotels to offer the quality, service and standards that only international hotel companies like IHG can provide. These new travelers are equipped with the most important tool a traveler possesses – information. They are demanding the type of hotel experience IHG has been delivering for more than six decades.

Palm Beach, Aruba

Cartagena, Colombia

IHG’s growing Holiday Inn family of brands is the fastest-growing of the company’s brands in the region, and among the fastest-growing hotel brands in the industry worldwide. Of the 28 hotels currently in the pipeline for IHG’s Latin America and Caribbean region, 21 hotels are expected to be developed under either the Holiday Inn® or Holiday Inn Express® brand fl ags. With over 3,439 hotels worldwide, the Holiday Inn® Brand Family is the most widely recognized lodging brand in the world.

Whether traveling on business or pleasure, the Holiday Inn family of brands offers travelers comfort and convenience in a modern and contemporary environment. Recent Holiday Inn® brand hotel openings in Latin America include Holiday Inn Buenos Aires-Ezeiza Airport in Argentina, Holiday Inn Cartagena Morros in Colombia, Holiday Inn Bogota-Airport in Colombia, Holiday Inn San Jose Escazu in Costa Rica, Holiday Inn Resort Grand Cayman in Cayman Islands and Holiday Inn Guayaquil Airport in Ecuador. IHG plans to grow its portfolio within the next year in Marilia, Belem, Sao Luis, Rio Branco, Belo Horizonte, and Porto Velho in Brazil; Nassau in the Bahamas; Bucaramanga, Bogota, Barranquilla, and Cucuta in Colombia; Tegucigalpa in Honduras; Managua in Nicaragua; and Panama.

Brazil, a country with a traditionally low overall percentage of international hotel brands, the emerging traveler is single-handedly changing that, demanding standards only companies such as IHG can deliver. For example, Brazil has 16 cities with a population of one million residents or more, and 41 cities with a population of 500,000 or more, the vast majority of which have few internationally branded hotels proportionate to population. This creates opportunity to introduce strong, international brands like those in the IHG family to these cities.

Beyond countries like Brazil and Colombia, which is also a hotbed of growth for the Holiday Inn brand, with new Holiday Inn properties recently opened in Bogota and Cartagena, we fi nd that our guests at these properties are increasingly intra-regional, resulting in a rapid increase in travel from within the different countries.

As these nations and regions forge trade agreements, business is becoming more consistent, and travel more accessible to exponentially more people. The trend of the new class of emerging travelers looks to permeate the region, as hotels aim to fulfill their every need.

Studies show that IHG’s Holiday Inn family of brands have high familiarity and have high preference in the region. With most of the properties being new-builds that include the new Holiday Inn brand standards; this global brand is forging a new era in the region’s hospitality industry. Holiday Inn is nothing short of a pioneering brand, providing the ideal hotel setting for the millions of individuals and families increasingly on the move from within Latin America.

And pioneering is nothing new to IHG. As the fi rst international hotel company in Latin America in 1946 through the InterContinental hotels and resorts brand, it has been in the international scene for more than 60 years and no one knows the world like they do. And just like the needs of those travelers were met and exceeded all those years ago, IHG is poised to do the same with Holiday Inn.

Visit our website at: www.holidayinn.com


Bogota, Colombia

San José, Costa Rica

Santo Domingo, Dominican Republic

Santiago, Chile


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


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.”

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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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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

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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.


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.


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.


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



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.

What is VectorGlobal WMG (VG)VG is a US Securities Broker-Dealer established in 1993, regis-tered with the SEC (Securities and Exchange Commission), a member of FINRA (Financial Industry Regulatory Authority), SIPC (Securities Investor Protection Corporation), and the NFA (National Futures Association). Tell us about VG’s PhilosophyWe have an investment philosophy that is based on close contact and in-depth knowledge of our clients’ needs and objectives. We believe in showing them the essential bal-ance between time horizon, risk tolerance and expected returns. We guide our investors through the complex market dynamics and recommend only what is best suited and pru-dent for each individual. Where are your offi ces located?We are headquartered in Miami, Florida, with offi ces in New York, Houston, Colombia and Singapore, as well as alliances in Chile, Costa Rica, Ecuador, Mexico, Peru, Switzerland, and Venezuela. We are committed to having a global presence for the benefi t of our clients and advisors. What have been the successes of VG in recent years?20 years ago we established a successful wealth manage-ment operation that has steadily grown year over year. We have gained the trust of more than 1,500 clients in 15 coun-tries, and have $1.1 billion dollars of assets under manage-ment. Even more important is the level of training and expe-rience of our worldwide advisor workforce. These advisors provide a level of service and advice that truly differentiates us from our competition. What are the advantages of working with VG?At VG we have an open product architecture to provide our clients with the best fi nancial products without confl icts of in-terest. To this we add a superior customer service philosophy, a team of experienced fi nancial advisors, economic analysis and product specialists, competitive pricing on execution, and two custodial platforms considered to be the most prominent and safe: JP Morgan Clearing Corporation and Pershing LLC.


VectorGlobal WMG Management Team. From left to right:

Carlos Younes, Sales & Marketing Head LATAM; Oscar Mejia, CFO & HR Director; Claudia Batlle, Product Analysis & Trading Director; Carlos

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.



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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.”



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.



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


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

Cen

tral

del

Uru

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


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.

”


Femsa



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.

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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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China Shipping container ship



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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



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



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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Succesful Business LeadersAshoka.org/ASN

ducators and Families

“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.



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:

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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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Latin America has problems of corruption and security, which complicate global trade.

IN THE MIDDLE OF THE PACK

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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


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



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


2013 2014 2013 2014 2013 2014

GDP growth 4.1 4.5 2.9 3.8 8.1 7.7



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


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


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.




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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



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


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


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


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


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

latin trade (english edition) - sept/oct 2013

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