LATIN TRADE Top 500 Biggest multilatinas by sales INNOVATION: Channeling disruption
Overcoming
LATIN AMERICA’S TOP 500 slow growth: 4 CEOs talk strategy Enrique Cueto, LT CEO, LATAM Nelson Pizarro, CEO, Codelco Luis Henrique 5 Guimarães, CEO, Raízen José Galló, ALSO: CEO, Lojas Renner Trailblazers in the auto industry, and logistics.
SECOND QUARTER 2017
YOUR BUSINESS SOURCE FOR LATIN AMERICA » WWW.LATINTRADE.COM SECOND QUARTER 2017
CONTENTS
SECOND QUARTER 2017/VOL. 25/No. 2
Letter from the editor Opinion 4 Innovation that really counts 24 Unintended consequences: the fall of the Brazilian business The Scene sector. By Lourdes Casanova 6 Silent risks Cyber risks haunt companies and individuals Opinion and impose new costs. 25 Building a cyberresilient organization Cheaper robots Jorge Becerra and Oriol Solans, The Boston Consulting Group. LT.COM 8 Exotic and seductive Tourism in Latin America
Elections calendar in the region
9 Time and money. How Latin American business people use their time.
The Contrarian 10 Is Latin America ready for technology COVER STORY: TOP 500 disruption? By John Price 26 Innovating at full speed Performance of LT 500 companies in 2016. LT Board Analysis by sector and interviews with the most 12 Good intentions go wrong innovative companies. The drama of informal work. Latin Trade Board of Economists analyses informal work in Latin Interviews: America and the problems it creates. 32 “Air traffic in the region has the potential to double in the next Urban infrastructure 20 years”. Enrique Cueto, CEO, 14 Cities under surveillance LATAM Airlines Group.
2 Management 34 Tight management post gains in 16 How X teams can help Latin tough environment. Nelson Pizarro, American companies succeed CEO, Codelco and innovate 36 Expand, diversify, modernize. José Galló, Logistics - Innovation CEO, Lojas Renner. 18 By sea and air, logistics innovate for growth. 38 Citizen Kane. Luis Henrique Guimarães, Florida Port of Everglades and Miami CEO, Raízen International Airport, the state of art in the handling of cargo. 40 Against all odds. 42 LT 500 Performance tables Optic fiber Winners & losers tables, by profits and revenues 22 Argentina: speeding up the 2017-2012. Top 500 comparison. internet. A new undersea cable Where the top10 companies were in 2012? will link Argentina and Brazil in 2018. 56 Executive education The dilemma of sustaining the prestige of online MBAs
LATIN TRADE SECOND QUARTER 2017 Automotive Industry: Innovation BOARD OF ADVISORS 58 More efficient vehicles Jorge Becerra, Richard Burns, Raúl Katz, Thilo Mannhardt
for Latin America CEO/EXECUTIVE EDITOR Santiago Gutiérrez
Special Supplement Panama MANAGING EDITOR Élida Bustos 63 The Strategy For Success ART & PRODUCTION DIRECTOR Manny Melo 64 “Everyday we grow more and COLUMNISTS have fewer poor people”. Exclusive John Price, Lourdes Casanova, BCG interview with President Juan Carlos Varela. CORRESPONDENTS LATIN TRADE / LATINTRADE.COM Argentina: Charles Newbery, Dimitri Fominykh, David Haskel Brazil: Thierry Ogier (São Paulo) • Chile: Emily Russell • China: Natalia Villegas • 68 Compact dynamo. Colombia: Alejandro González, Santiago Torrado, Pilar Calderón Mexico: Daniela Clavijo (Mexico City), Nancy Ibarra (Monterrey) Interview with the minister of Economy & Peru: Adriana Roca, Simeon Tegel • Uruguay: Diego Stewart Finances, Dulcidio De la Guardia. U.S.: David Ramírez, Jeff Zbar (Miami), Diego Graglia (California), José Luis de Haro (NYC).
CONTRIBUTING EDITOR 70 The bet on foreign investment. Gabriela Calderón (Research) Interview with Proinvex Agency Director, TRANSLATION: Ken Emmond Alberto Alemán. COPY EDITING: Lucy Conger (English), Élida Bustos (Spanish)
SALES VICE PRESIDENT Tourism María Cristina Restrepo
72 Copa Airlines, 70 years of SALES MANAGER SOUTHERN CONE uninterrupted growth Mariano Vergara-Hegi DIGITAL MARKETING MANAGER Carolina Córdoba
Private Aviation - Innovation ADMINISTRATIVE ASSISTANT 74 Bringing the world closer Andrea Valderrama ADMINISTRATIVE AND FINANCE DIRECTOR to Latin America Claudia Banegas
Manufacturers strive for more autonomy ORIGINAL DESIGN in their new models. Enrique Franco Mendoza LATINTRADE.COM
CFO Events DEPUTY EDITOR David Buchanan 78 CFO Forum São Paulo: Going digital RESEARCH Santiago Espitia
COLUMNISTS 3 79 CFO Bogota: A volatile environment Cynthia Arnson (The Wilson Center), Arturo Franco (The Atlantic Council), Margaret Myers (The Inter-American Dialogue) Experts from The Inter-American Development Bank, OCDE
SPECIAL GUEST COLUMNISTS Deborah Ancona (MIT), Felipe Barrera (Harvard University) Harold Trinkunas (The Brookings Institution) The World Bank LAC Department
BOARD OF ECONOMISTS Andrés Neumeyer (BCRA), Roberto Rigobón (MIT) Esteban Rossi-Hansberg (Princeton University), Andrés Velasco (Columbia University), Alejandro Werner (IMF)
IT Cover: Harlan Lax, Dallas R. Cobb Top 500 FOR ADVERTISING/SPONSORSHIP OPPORTUNITIES: Innovation [email protected] LATINTRADE.COM SENIOR MARKETING ASSOCIATE Rosemary Begg
LATIN BUSINESS TRAVELER EDITOR Rochelle Broder-Singer
TRANSLATION Aimara Farhat
Editora Latin Trade LTD and Editora Latin Trade Colombia SAS CUSTOMER SERVICE AND SUBSCRIPTIONS: Please visit www.latintrade.com to order online or call 1-305-749-0888 / 1-786-499-9725. Latin Trade (ISSN 1087-0857, USPS 016715) is published in editions in English and Spanish by Editora Latin Trade Colombia SAS, under license from Manhattan Media LLC. All rights reserved. Reproduction in whole or in part of any text, photograph or illustration without written permission of the Publisher is strictly prohibited.
Visit Latin Trade online @ www.latintrade.com
SECOND QUARTER 2017 LATIN TRADE LETTER FROM THE EDITOR
Innovation that really counts
Major research projects don´t always solve the most pressing problems of human beings. Sometimes what is needed is innovation born from small ideas which serve the purpose of improving people’s daily lives.
By Santiago Gutiérrez
What is the type of innovation that counts? That’s dramatic, but even if those numbers were Taken to the extreme, that is a Byzantine debate. to increase substantially, we would still be stuck No one can deny the immense value of blue sky in underdevelopment. In Mexico, Chile, Colombia, research. On the contrary, we should all be capable and Peru, for example, universities are the leading of standing in awe of the elegance and formidable patent seekers, and not companies. Material relevance of theoretical advances in the sciences, progress seldom comes from ideas alone, but from whether or not they have practical applications. ideas tied to productive processes. In Germany, the Time and again, this knowledge has helped us, United States, and China, the lists of top patent sometimes decades later, to gain a better under- seekers are made up exclusively of companies. standing of human beings and the universe. Promoting innovation for development resides more with cities and entrepreneurs than with national However, what we need for economic develop- governments. ment is more pedestrian, maybe not so elegant, but key for the 650 million people who live in the region. We don’t have to wait for disruptive inventions It´s not invention, but innovation: the type that con- like that of Yolanda Fernández, who invented the 4 verts ideas into goods and services that improve our McDonald’s Happy Meal box in Guatemala, which lives when taken to market. according to Sense 360, generates sales of $10 million per day, in the United States alone. The metrics used to gauge innovation aren’t accurate. For example, public expenditure on R&D, It’s more a story of permanent effort like that of or the number of patents issued. These numbers Embraer, which spends 10% of its revenues on inno- are part of a story that’s as incomplete, and perhaps vation every year and receives almost half of its $3.5 useless, as is the awareness that investing an billion of annual sales from products developed or additional three or four percentage points of GDP upgraded in the last five years. in infrastructure is lacking in order to close the gap with developed countries. If we wait until public money is available, or for a person to invent the next Facebook, we might be left The case of patents illustrates the problem. Resi- standing still in underdevelopment for decades. LT dents of Germany file for 72,700 patents each year, eleven times more than the 6,500 applications
made by all the residents of Latin America and the EXECUTIVE EDITOR Caribbean combined. [email protected]
LATIN TRADE 2017 SECOND QUARTER
THE SCENE Silent risks
Cyber risks haunt companies and individuals Countries best prepared and nowadays they pose tough challenges to defend against cyberattacks and impose new costs. How much do U.S. Score companies spend each year on cybersecurity? United States 0.824 Canada 0.794 Australia 0.765 Cybersecurity spending in the U.S. Malaysia 0.765 In USD billions and as percentage of GDP, 2009-2017 Oman 0.765 New Zealand 0.735 70 0.4 Norway 0.735
60 0.35 Brazil 0.706 Estonia 0.706 0.3 50 Germany 0.706 0.25 40 India 0.706 0.2 Japan 0.706 30 of GDP Percentage
USD (billions) 0.15 South Korea 0.706 20 0.1 United Kingdom 0.706 Austria 0.676 10 0.05 Hungary 0.676 0 0 Israel 0.676 2009 2010 2011 2012 2013 2014 2015 2016 2017 Netherlands 0.676 Absolute GDP % Singapore 0.676 Latvia 0.647
Source: TIA 2010-2017, ICT Market Review and Source: ABI Research, ITU, Global Cybersecurity Forecast, reproduced by WEF. Index, reproduced by WEF.
Cheaper robots
The Robotic Industries Association estimates that were ordered from North American robotics 250,000 robots are now in use in the United States, companies during the first quarter of 2017, the third largest buyer behind Japan and China. according to a report from the World Economic 6 Almost 10,000 robots, worth over $500 million, Forum (WEF).
Global shipments of industrial robots Prices go down, orders go up
could triple by 2025 32% Units from Value 2016 1.0 K $600 M 1.0 million units 28% 500 0.8 0.8 400 0.6 0.6 300 Average annual growth rate: 16% 0.4 0.4 200
0.2 0.2 100
0 0 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Source: ABI Research Source: Robotic Industries Association, reproduced by WEF.
LATIN TRADE SECOND QUARTER 2017 aviso_latin_trade_ingles.pdf 1 7/19/17 6:50 PM
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NATURAL ATTRACTIONS FOR TOURISM CULTURAL ATTRACTIONS FOR TOURISM IN LATIN AMERICA IN LATIN AMERICA
Rk. Country Travel & 2017 Rk. Country Travel & 2017 Tourism World Tourism World for Natural Ranking for Cultural Ranking Resources Resources 1 Brazil 6.1 1 1 Brazil 5.7 8 2 Mexico 5.6 2 2 Mexico 5.3 10 3 Costa Rica 5.4 3 3 Argentina 4.5 14 4 Peru 5.3 4 4 Colombia 3.4 20 5 Ecuador 4.9 11 5 Peru 3.3 24 6 Panama 4.6 17 6 Chile 2.7 40 7 Venezuela 4.6 18 7 Venezuela 1.4 48 8 Colombia 4.5 22 8 Bolivia 2.2 55 9 Argentina 4.4 25 9 Ecuador 2 56 10 Bolivia 4.6 36 10 Uruguay 2 63
Source: World Economic Forum.
UPCOMING ELECTIONS
2017 JULY AUGUST OCTOBER NOVEMBER DECEMBER 30 13 22 19 3 Venezuela: Argentina: Argentina: Chile: general elec- Bolivia: jurisdic- constituent Primaries – Legislative tions (presidential tional elections. assembly delegates candidates for elections. first round, election. congress. parliamentary, and 10 Venezuela: region- 8 regional). al elections 16 Honduras: general 17 elections (presiden- Chile: tial, legislative, re- presidential gional, and local). second round. 2018 FEBRUARY MARCH APRIL MAY JUNE 4 4 1 27 17 Costa Rica: El Salvador: Costa Rica: Colombia: Colombia: presi- presidential presidential Legislative and elections second presidential dential elections elections first local elections. round. elections first second round. round. round. 11 22 Mexico: general Colombia: Paraguay: elections legislative elections. general elections (presidential, (presidential and legislative, and legislative; date to regional). be announced).
Source: Electoral authority of each country
LATIN TRADE SECOND QUARTER 2017 TIME AND MONEY Are Latin American managers working smart, or just working hard? Latin Trade looked for clues
Percentage of time in a week spent Percentage of time in a day spent in these activities in these activities Planning 20.4% Meetings/calls with clients 25.0% Human resources analysis 9.1% Meetings/calls with company colleagues 29.5% Marketing and sales analysis 19.2% Answering emails 28.8% Technology analysis 10.3% Other activities 16.6% Operations analysis 16.2% Risk and financial analysis 14.7% Non-strategic operational tasks 10.1% Source: Latin Trade.
A FORTUNE ISN’T BUILT Age 2007 2012 2017 30-39 3 2 1 IN A DAY 40-49 5 6 6 In 10 years, the number of billionaires 50-59 6 11 10 in the region more than doubled. But 60-69 11 22 28 there are still fewer than a dozen 70-79 9 16 25 people who have made the list before 80-89 4 6 12 the age of 50. 90-99 1 1 4 Billionaires 39 64 86
Total wealth of the Latin American billionaires will recover in 2017 after three consecutive years of decline. Their fortunes almost doubled over the past 10 years.
600 9 479.05 500 438.6 415.1 374.5 400 367.8 333.2 299.2 300 227.2 205.1 200 Billions of U.S. dollars Billions of U.S. 123.3 100
0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Forbes, Latin Trade.
SECOND QUARTER 2017 LATIN TRADE THE CONTRARIAN OPINION
IS LATIN AMERICA READY FOR TECHNOLOGY DISRUPTION?
“Today, Mexico City is Uber’s busiest market in the world, revealing the allure of an e-marketplace that delivers transparency and traceability between buyer and seller.”
By John Price
n Latin America today, the status quo is Latin America is a low-trust society where under attack, and the weaponry of change commerce is normally conducted between well- is technology. known parties. Thus, many are surprised by the From corrupt politicians caught success of e-marketplaces. blindsided by damning recordings on social In Mexico City, chilangos and visiting foreigners media to a taxi industry up-ended by Uber, learned to be skeptical of the common taxi, the to a media industry undermined by Netflix, vehicle of countless robberies and kidnappings. mobile-enabled technology is delivering Today, Mexico City is Uber’s busiest market in the unprecedented levels of transparency, efficiency and world, revealing the allure of an e-marketplace that Iupheaval to Latin American society and industry. delivers transparency and traceability between Connectivity of the region is the ultimate trade buyer and seller. Latin America is Airbnb’s fastest- barrier buster. Virtual products such as TV shows, growing market region. Traditional hotel, taxi and movies, e-books, and video games are rolled out car rental industries are all under threat. globally as quickly as they are translated, bypassing The formalized traditional service sectors in Latin
10 oligarchical structures in media and publishing. America are plagued by heavy employment and Brazilian electronics consumers—who traditionally severance taxes, providing a ripe opportunity for pay three times the retail price for the same goods e-commerce. in the U.S. or Asia—can now buy their next laptop In Brazil, CargoX provides an Uber-like solution or cellphone directly from a Chinese manufacturer. to trucking, linking owners of one-truck fleets with Even after paying import tariffs, e-shoppers save cargo customers. It won’t be long until underpaid 30% to 40% versus buying in a store. lawyers, accountants, designers, and other LatAm e-commerce is growing at close to 20% professionals start stealing customers from their per year; sales of virtual products, that suffer no employers by affiliating themselves with reputable logistics hurdles, are growing at over 100% per year. marketplaces that specialize in their field. (For example, Uber’s LAC division grew tenfold Perhaps only then will Latin American politicians from 2015 to 2016.) More growth potential is there. get serious about labor and business reform. LT Brick and mortar retail space per capita in Latin America is about 15% that in the United States. Outside the region’s top 10 cities, traditional retail JOHN PRICE is the managing director of Americas Market options are limited. Intelligence and a 24-year veteran of Latin American competitive intelligence and strategy consulting. [email protected]
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JHI1611049_SN_How Far-Latin Trade-Eng&Spa resize ads.indd 2 11/21/16 3:51 PM Good intentions gone wrong The drama of informal work. How to reduce it. LATIN TRADE BOARD OF ECONOMISTS TRADE BOARD LATIN By Santiago Gutiérrez Gutiérrez By Santiago Photo: Pixabay
In Latin America, 50% to 60% of workers are employed by firms of five employees or fewer, while in the United States, 58% of workers are in companies with more than 100 employees.
“Informal employment is a Central Bank of the Republic of earn one third of what those in social problem that is being Argentina, Andrés Neumeyer, companies of six or more em- solved in the wrong way,” offered more facts about on the ployees earn. Esteban Rossi-Hansberg, a size of the problem. In Latin
12 Princeton University professor, America, he said, 50% to 60% COMPANY GROWTH said categorically. of workers are employed in Informal employment might companies of five employees Esteban Rossi-Hansberg said be seen as a blessing for the or fewer, while in the United that informality exists because homes of those workers and, States 58% of workers are in there is an explicit tax involved in effect, it’s possible that it companies with more than 100 in formalizing an operation – is in the short term. But the employees. tax contributions and addition- well-intentioned should realize Informal workers in Latin al labor costs – and an implicit the tremendous punishment America have little education one, so long as the informal that informality represents to and are poor. The managers of companies are not punished the workers in the long term companies with five employees for not complying with tax and because, as shown by the sta- or fewer in the region have an business obligations. Where in- tistics, those people will never average of eight years of educa- formality is tolerated, he added, leave the backward situation of tion, while in the United States, there is an incentive to create poverty and low productivity. those who manage more than small and inefficient business- “It’s not a good way to help,” 10 employees have 14. In ad- es. In fact, they must maintain said Rossi-Hansberg. dition, workers in companies their small size to keep the The chief economist of the with five or fewer employees benefits of informality. “Having
LATIN TRADE SECOND QUARTER 2017 Photo: Pixabay
more badly-run companies isn’t ting informality continues with a way to help.” making sure the phenomenon The natural way to promote Latin American is well measured. Andrés Velas- formality is to eliminate those workers in the co recalled that the number of subsidies, for example, by sim- firms in Chile – 1.5 million – is plifying the bureaucratic pro- informal economy inflated by companies that no cedures for all companies, not have little education longer exist but are still regis- just the informal ones, Rossi- and are poor. tered, because legalizing a bank- Hansberg said. Another less ob- ruptcy is very tedious. vious strategy is to encourage Next, he said, comes elimi- growth of enterprises. The managers of nating physical, cultural, and Growth, said Columbia Uni- companies of five mobility barriers. Removing versity professor, Andrés Velas- physical barriers would, facili- co, has to do with taxes, market employees or fewer tate the movement of persons size, also the lack of financing, in the region have from where they live to the and the scarcity of trained an average of eight sites where the formal employ- people. Also, growth is related ment is located. Eliminating to things like small business years of education, cultural and mobility barriers guilds, which are quite influen- while in the would ensure that there is no tial, and which often focus their United States, the discrimination by sex or race in demands on survival and not the formal workplace. on growth. Although the issue managers of firms Equally important, there have of scale isn’t the same as infor- with more than 10 to be the right incentives in so- mality, it’s pretty close, he said; employees have 14. cial security programs, so that the issues are “first cousins.” it doesn’t happen that, as Velas-
co showed, those who don’t 13 INFORMAL EMPLOYEES contribute to the system and who choose not to formalize Andrés Neumeyer asked why are rewarded with health insur- there are so many people work- ance coverage and pensions. ing informally in thousands Lastly, get rid of barriers to of micro-businesses. He finds training. People with little edu- reasons in barriers such as the cation or few skills cannot work lack of skills or knowledge, and teban Rossi-Hansberg warned, in large companies, and that’s physical and legal difficulties something must be done so why they start their own a me- that impede working in formal that everyone – formal and chanical workshop, said Neu- entities. informal firms alike – follow meyer. “A lot of employment is The solution, he said, is obvi- the rules. “In the United States, generated in micro-businesses ously not to send an army of those who don’t comply go to because people don’t have the lawyers and accountants to jail,” he said. Possibly, as Neu- skills to work in a modern busi- summon a group of poor and meyer said, a gradual solution ness.” LT
uneducated people before the should be put in place. SANTIAGO GUTIÉRREZ REPORTED courts. At the same time, as Es- The list of tasks for combat- FROM BOGOTA
SECOND QUARTER 2017 LATIN TRADE Xxxxxxx URBAN INFRASTRUCTURE INFRASTRUCTURE URBAN By Diego Graglia
More monitoring with cameras in Buenos Aires to combat crime. Photo: Ministry of Justice and Security, Buenos Aires City Aires Buenos and Security, Photo: Ministry of Justice CITIES UNDER SURVEILLANCE “To have smart cities in Latin America, we must first rethink our urban development model.” Lucía Dammert, professor with the University of Santiago de Chile. 14
São José dos Campos, a city of 600,000 inhabit- they can respond to incidents more quickly and ants near São Paulo, might never be one of the more efficiently. most famous cities in Latin America. But, to It’s an example that shows that Latin Ameri- technology firm Ericsson, it is a model of citizen can cities are on the cusp of improving citizen security in smart cities. security with technologies that are integral to the The Swedish company has launched a project outfitting of a smart city. What usually happens there with technologies that aim to give the au- is that the deployment of the technology hasn’t thorities an ongoing view in real time of what been as fast as in other parts of the world, so up is going on in the city’s streets. “It’s our banner to now the advances have come in the form of project in Latin America for a smart city with systems of omnipresent cameras. advanced (technologies),” said Alberto Rodrigues, “Within the region, the idea of the smart city Ericsson spokesman, at the company’s office. has been linked to comprehensive systems of Five hundred cameras joined by 210 kilometers telesurveillance, which can also be used for traf- (130 miles) of fiber optics are integrated into a fic control,” said Lucía Dammert, a sociology pro- system in which police, civil defense agents, and fessor at the University of Santiago de Chile. ambulance operators have their own tablets so The camera systems can be used for several
LATIN TRADE SECOND QUARTER 2017 The Inter-American Development Bank is already working on “smart city” projects with 77 cities in Latin America, through its Emerging and Sustainable Cities program.
tasks at the same time: crime prevention, pro- sive public safety system that includes a “digital viding proof of crimes, identifying data such as ring” around the city. This consists of posts with license plates of stolen cars, and of course, regu- cameras that read the license plates of vehicles lating traffic. to identify false plates or cars the authorities want seized. The system also includes panic but- COMBATING THE LACK OF PLANNING tons and electronic ankle bracelets to monitor people released on conditional parole. In a few In considering technological solutions, Latin years, the city’s videosurveillance system will American cities must include in their analyses expand from 2,000 to 11,000 cameras to control the pressing challenges to citizen security they streets, buses, and the underground. face. Many cities suffer from a common malady: the lack of planning. “This has brought with it DATA SECURITY problems of crime, mobility, disaster response, energy efficiency, et cetera,” explained Mauricio Darren Ware, leader of Cisco’s Smart Cities Bouskela, a specialist in smart cities with the initiative in Latin America, says that one of the Inter-American Development Bank (IDB). most important angles is the security and pri- Other companies besides Ericsson are looking vacy of data. “Each business process, service to to take advantage of this market in the region. a client, or interaction between government and IDB estimates that a town of 250,000 to a half a citizen that is digitalized should be protected,” million inhabitants must invest $20 to $30 he said. million to become a smart city with a system of Ericsson, meanwhile, has broadened its agree- fiber optics, cameras, and sensors that connect ment with São José dos Campos in Brazil to pro- to 100 institutions. vide a system that detects gunshots and other 15 The IDB is now working on “smart city” projects events that call for emergency response. with 77 cities in Latin America, through its Many technologies are available and every day Emerging and Sustainable Cities program. Among there are more, said Professor Dammert, but only those with public safety projects are the Brazilian a few have proven truly effective for citizen se- cities of Vitória, Goiania, and Florianópolis; curity. Colombian cities Barranquilla, Valledupar, and “The big problem with security is there is a lot Villavicencio; Valdivia in Chile; Guadalajara in of technology that isn’t proven in crime preven- Mexico; and Montevideo in Uruguay. tion but (municipal governments) buy them just Also in Brazil, Niteroi (near Rio de Janeiro) has the same,” she said, citing aerostatic balloons incorporated, in addition to surveillance cameras, and drones for aerial vigilance. panic buttons installed in key places like bus ter- “To have smart cities in Latin America, first of minals, public schools, and public housing com- all we have to rethink our urban development plexes. Connected with videocameras, when the model,” she said. “We can fill ourselves up with buttons are activated, they send a signal to the technology, but that’s not going to improve the system that shows where the incident is occur- quality of life of the residents.” LT ring and also transmit images. Buenos Aires has just launched a comprehen- DIEGO GRAGLIA REPORTED FROM SANTA CRUZ, CALIFORNIA
SECOND QUARTER 2017 LATIN TRADE MANAGEMENT HOWXTEAMS CAN HELP LATIN AMERICAN COMPANIES SUCCEED AND INNOVATE
Innovation and competitiveness are perhaps two of the most important catalysts for growth. And it’s precisely on those two topics where many Latin American companies fall behind from their counterparts in other regions. But for more than 10 years, there has been an academic and scientifically tried and tested way to improve on them: X-teams. In her book, “X-teams, How to Build Teams that Lead, Innovate and Succeed,” Deborah Ancona, Deborah Ancona, Seley Distinguished Professor of Management Director of the MIT and Director of the MIT Leadership Center at the Leadership Center of the Sloan School institute’s Sloan School of Management, writes of Management that traditional team models are falling short. MIT of Management, Courtesy of Sloan School What’s needed –and what works— is a new brand of team, the X-team. X stands for external, and not very hard to engage workers, particularly the these teams operate with a focus on external factors younger people who tend to leave organizations in performance: better outreach to stakeholders, ex- more readily. You can motivate those people with tensive networking, and less bureaucracy. an X-team program. It can reap a load of benefits “X-teams make you more externally in addition to the aforementioned innovation, focused”, Ancona told Latin Trade. “They focus effectiveness, and impact on the company’s on customers, changing technologies and performance,” the author said. competitive challenges. They help you see what More engaged employees, motivated millenni- the current environment looks like.” als, a boost in productivity, efficiency, and more Bureaucracy is heavy in Latin America where innovation in a constantly changing world. Too hierarchy in companies tends to be rigid and good to be true? Not at all, the answer may lie in even small changes can get bogged down in pa- X-teams. LT
16 perwork. Long-term planning and productivity are also major weak spots in management in the region. X-teams Characteristics of an X-team provide a way 1. Goes outside of the team and even the organization to to loosen the understand changes in technology, markets, customer bureaucracy and needs, and competitive challenges. create methods for motivating 2. Links up the organizational hierarchy to get buy in and millennials and support from top management for innovative ideas, ac- distributing crue resources to fund new modes of operating, and get leadership to feedback from management to align the team’s work lower levels in with organizational priorities. companies. An added 3. Connects the work of the team to other groups inside bonus of this is and outside the organization so that collaboration and more employee synergies beyond the team can help the team to execute engagement. “It’s on its tasks.
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LOGISTICS – INNOVATION By Jeff Zbar By Jeff
BY SEA AND AIR LOGISTICS INNOVATES FOR GROWTH 18
LATIN TRADE SECOND QUARTER 2017 “The internet of things is really starting to make a dramatic change in our industry.” Gary Goldfarb, Chief Strategy Officer, Interport Group of Companies
hen a 10-ton shipment of carrying some 90% of goods in global fresh snow peas arrived trade annually, innovation could yield sig- this February in Amster- nificant savings. dam from Guatemala – by Technology is transforming trade. Wway of Port Everglades and Miami Inter- It’s nothing new that GPS technology national Airport – it signified more than tracks shipments through trade zones the delivery of fresh produce. The cargo’s and around the world, even tracking trip was the latest example of an innova- in-warehouse productivity, or weighing tive approach to global logistics. cargo in seconds – as opposed to minutes, Previously, produce from much of the says Gary Goldfarb, chief strategy officer Americas would take a slower route, via with Interport Group of Companies. The Philadelphia to Europe, requiring costly Miami-based supply chain management and prolonged refrigeration to ensure a firm has helped create foreign trade zones safe journey. at PortMiami and in Fort Lauderdale and Instead, Crowley Maritime Corporation performance-enhancing technology. shipping firm and Miami International “All of these (shipping zones) report into Airport tapped expedited U.S. Customs a central command and control screen, and Border Protection processing of sea- managed from a PC, phone, or tablet,” he to-air transshipments to create a connec- said. Gone will be menial or dangerous tion that shaved days off the transit time jobs; those that remain will enjoy height- and dollars off duties. ened productivity. “The internet of things The collaborative shipment was called is really starting to make a dramatic a “milestone” by shipping brokers and change in our industry.” even earned a nod as “innovative” from
U.S. Customs and Border Protection, said THE LEADING CARGO AIRPORT 19 Jim Pyburn, director of business develop- IN THE US ment with Port Everglades, one of the bus- iest shipping hubs in the Southeast and Innovation is transforming air and sea the port of arrival of the snow peas in the ports and the companies that rely on US. “These are fresh, not frozen, delivered them. Handling more than two million just in time, much faster and fresher,” tons of cargo and air freight worth $57.3 Pyburn says. “This is all about efficiencies billion in 2016, Miami International Airport and cost savings realized through tech- is the leading cargo international airport nology and innovation.” in the US and the 10th busiest air cargo As the world grows “flat” and com- airport worldwide. The airport’s CORE, merce transcends borders, innovations in or Cargo Optimization, Redevelopment, the shipping industry are moving more and Expansion program, modernized and cargo faster across longer distances. This doubled cargo operations and capacity goes beyond moving more loads to more with its E-Air Waybill providing nearly pa- places, or “fish, flowers, fruit, pharmaceu- perless logistics management; created a ticals” and other “cold shipping” products new Foreign Trade Zone; and cemented its with less spoilage. With ocean shipping role in the Pharma Alliance, an initiative to Photo: Pixabay
SECOND QUARTER 2017 LATIN TRADE The APL Zeebrugge, loaded with containers. Photo: Pixabay
serve its share of the $400 billion global pharmaceutical new shipping berths. Upgrades will allow the port to shipping industry by 2020. Last year, the airport did $4.4 receive ships with almost 10,000 containers arriving billion in such shipments. from Asia through the Panama Canal. For many, “innovation” comes in the form of brick Yet, technology is driving much of the innovation. Lo- and mortar. Just west of Miami’s airport, the South gistics historically has involved complexities, requiring Florida Logistics Center is a 200-acre, five-building in- shipping companies and customers to navigate differ- termodal facility connected to the airport by rail with ent customs or regulatory authorities to supervise cargo PortMiami, Port Everglades, and Florida East Coast shipments from origin to destination. Freight forward- Railway’s (FECR) intermodal yard. Parent company ers made a living serving as middlemen who handled Florida East Coast Industries announced the sale of these challenges. Today, apps and technology allow any the Logistics Center in May 2017 for $209 million. shipper to manage every step, said Ariel Frías Ducou- dray, marketing chief for SeaLand. THE GANTRIES’ DANCE Apps on smart phones and tablet devices allow smaller customers to estimate costs and schedule, Today, jobs in logistics that cannot be outsourced to track, and manage their shipments. Have a question? technology are being made easier to perform. North of Send a tweet to SeaLand customer service. the Logistics Center, Port Everglades has collaborated SeaLand’s parent Maersk is collaborating with IBM with a number of partners to transform its operations on “cold chain”, or temperature-controlled shipping,
20 with innovations. MSC Mediterranean Shipping’s four to help streamline documentation and customs clear- new “rubber tired” gantries operate freely along aisles, ance across 19 different authorities, he said. Block- moving around on wheels, as opposed to conventional chain technology will help manage and track the gantries that move on rail tracks often common to paper trail of tens of millions of shipping containers seaports. Several years ago, the port, along with its around the world by digitizing the supply chain pro- partner, Florida East Coast Rail, opened a new 43-acre, cess and will save the industry billions of dollars, the $53 million Intermodal Container Transfer Facility. companies said in a release. The port’s cranes – including plans for three, $13.8 The “Remote Container Management” system of million, low-profile Super Post Panamax container- Maersk and IBM monitors containers and allows users handling gantry cranes – will help Port Everglades to control conditions should perishable commodities keep its position as Florida’s leading container port, be at risk. handling more than one million TEUs, or “20-foot “Shipping should be as easy as buying a ticket on equivalent units,” serving as a gateway to Europe, Asia, JetBlue or a book on Amazon,” said Frías. “Some of the the Caribbean, and Latin America. Port Everglades innovations we’re completing right now will look like handles 15% of all US shipping with Latin America the stone age in five or 10 years.”LT and the Caribbean The port is also widening and deepening its ship- JEFF ZBAR REPORTED FROM MIAMI ping channel, expanding its basin, and creating five
LATIN TRADE SECOND QUARTER 2017 THE STRENGTH AND SPEED OF A POWERHOUSE PORT 21 With a robust transportation network and a roster of more than 20 ocean carriers, Port Everglades provides the quickest, most strategic course from ship to shore, and beyond. Count on us to move your cargo in powerful new ways. Visit porteverglades.net or call 800-421-0188.
• Less than one mile from the • Rail connections throughout the U.S. Atlantic Shipping Lanes • On-port Foreign-Trade Zone • Direct highway access • Ocean shipping to 150 ports in • One traffic signal to Los Angeles 70 countries
port.everglades | @porteverglades | PortEvergladesFL | port-everglades SECOND QUARTER 2017 LATIN TRADE
PEG813_Latin Trade FP Alligator FP ad_mech.indd 1 7/19/17 9:39 AM New $575 million investment in an undersea cable
Argentina: Speeding up the internet “This is good for Argentina. We see real need for it, real demand.” Larry Schwartz, President and CEO, Seaborn TELECOMMUNICATIONS Mauldin, research director at Telegeography, a market Larry Schwartz, CEO of Seaborn research firm. “At some point, the capacity is going to be running out on these cables, and so you are going to need more capacity.” Demand for international bandwidth is growing at 40% a year, he said. A third line is planned. Seaborn Networks, a US developer and operator of such systems, teamed up By Charles Newbery with the Argentine conglomerate Grupo Werthein to lay a subsea line between Argentina and Brazil, due to start operations in the second half of 2018. It will connect to Seabras-1, a line that will go live in August to link Brazil and the US. The two projects together represent more than US$575 million in investment.
SUBSEA LINE BETWEEN ARGENTINA AND BRAZIL Photo: Courtesy of Seaborn
When Jack Ma, the founder of Alibaba, the biggest online retailer in China, visited Argentina in May, he lamented the poor internet connections. “The speed of the internet is so slow and so expensive,” he told entrepreneurs in Buenos Aires after signing a deal for Argentine companies to sell some products on his site. Argentina had an average connection speed of 6.3 megabytes per second (mbps) in the first quarter of 2017, three times slower than the 18.7 mbps in the US, according to Akamai Technologies, a US-based
22 provider of cloud computing services. In terms of cost of living, Argentina is one of the most expensive “This is good for Argentina. We see real need for it, countries on the globe, ranking with Australia and the real demand,” said Larry Schwartz, Seaborn’s chairman UK despite paying lower salaries. and CEO. The benefits will be faster connections, more These factors restrict the potential for online reliability, and better performance for users. businesses, in particular those using a lot of There will be more options for sending and receiving bandwidth such as music and video streaming data, easing concerns of downtime if a ship anchor cuts services like Hulu and Spotify. “The slower and the a line or equipment breaks at a landing station. more expensive a connection is, the harder it is for Schwartz believes the new line, dubbed ARBR, will businesses because there are fewer people who can also encourage further expansion of home internet shop online,” said Martín González, an entrepreneur in connections, terrestrial fiber lines, and mobile towers the insurance technology market. in Argentina. “They are all critical pieces of the puzzle, and as some pieces are added, this accelerates the A THIRD SUBMARINE CABLE growth of the other parts of that puzzle,” he said. “All of that together helps to address, and also helps to One drawback is that there are only two submarine drive, additional demand.” LT fiber-optic cables for international bandwidth in and out of Argentina. “That’s not enough,” said Alan CHARLES NEWBERY REPORTED FROM BUENOS AIRES
LATIN TRADE SECOND QUARTER 2017 arizona.flow PDF/X-4 ISO
FIRST JOB THE OPPORTUNITY EVERY YOUNG PERSON NEEDS IN LATIN AMERICA
Securing a frst job is an important step on the path to professional success. Arcos Dorados is proud to open its doors to thousands of young people with no professional experience every year. The Company has more than 90,000 employees in Latin America and the Caribbean region, where it is the largest generator of frst employment opportunities. Arcos Dorados provides training and orientation to over 75,000 crew and staff each year at its McDonald’s University in Brazil. And in Argentina, Brazil, Colombia and Mexico, the Company offers a frst job opportunity to more than 12,000 underprivileged youth. “Opportunities”, just one of the contributions that Arcos Dorados makes as a leading Latin American company.
2616-002-000_An ArcosDourados Ingles_190x254.indd 1 9/2/16 6:10 PM
Processado por arizona.flow em Fri Sep 2 17:57:31 2016 BLACK YELLOW MAGENTA CYAN 54691_2616-002-000_An ArcosDourados Ingles_190x254_1.pdf - 190.0 x 254.0 mm - pag. 1 MULTILATINAS OPINION Unintended consequences: The fall of the Brazilian business sector
“In volatile emerging markets like Latin American countries characterized by currency fluctuations and political instability, it takes a long while to build global companies which are jewels of the nation.”
By Lourdes Casanova
s Latin American govern- the leader of the winning consortium, partnered ments and business leaders with Brazilian companies Furnas and Eletronorte, hold their breath waiting granted the concession to build 1305 miles of elec- for the next list of names of trical grid to connect the Belo Monte hydroelectric big wheels likely implicated plant in Pará with Brazil’s southeast region. Last in Lava jato audiotapes, the year, in 2016, State Grid took control of the Brazil- big Brazilian champions ian CPFL Energia for US$4.2 billion. It is interesting keep falling like domino to note that the Brazilian government privatized pieces. CPFL in the 90s and the company is now being na- AIt all started with the mighty and revered Petro- tionalized by China. bras, one of the first companies to be listed in the In volatile emerging markets like Latin American Dow Jones Sustainability Index, and since then ex- countries characterized by currency fluctuations pelled from it. and political instability, it takes a long while to The most recent domino to fall is JBS, which is build global companies which are jewels of the na- selling assets and will struggle to remain the big- tion. These enterprises create sought-after jobs, gest meat processing firm in the world. Odebrecht, innovate and are able to internationalize, expand- the only big Latin American construction company, ing the soft power of a country. Jobs in these global is never far from the news. players are for many aspiring graduates the entry Only seven Brazilian companies are represented ticket to joining the middle class. Innovations in
24 in the 2016 Fortune Global 500 list which ranks the these firms allow them to reduce dependence on largest corporations worldwide by total revenue. In expensive patents from developed economies, and comparison, 103 firms from China are among the their successes bring pride and motivation to the 500, and the number of Brazilian companies in this country’s citizens. revered list may go down. It remains to be seen how these two parallel At the same time, we see increased interest from phenomena –the crippled domestic Brazilian busi- China, which has become Brazil’s main investor. ness sector and the massive investments of (quite One of the prominent Chinese companies is often) state owned Chinese companies– will help State Grid, the second biggest company in the Brazil come out of this profound economic crisis. world by revenues after Walmart. This state-owned Brazilians need to consider this new reality and ask company provides electricity to 88% of China’s themselves what kind of role they foresee for Brazil population and has its own innovative technology in the world in the years ahead. LT to reduce electricity loss during transmission. The company entered Brazil in 2010 with the ac- quisition of seven energy transmission companies LOURDES CASANOVA, Senior Lecturer and Director Emerging Markets from the Spanish ACS engineering and construc- Institute, S.C. Johnson College of Business, Cornell University. tion firm for US$989 million. In 2014, State Grid was [email protected]
LATIN TRADE SECOND QUARTER 2017 BUILDING A OPINION CYBERRESILIENT ORGANIZATION No defense is 100% impenetrable. Recent Boston Consulting Group research indicates that more than 70% of breaches exploit nontechnical vulnerabilities.
By Jorge Becerra and Oriol Solans Becerra By Jorge for a reasonable role-based Jorge Becerra, Senior Partner access management system for The Boston nontechnical staff – one that Consulting keeps people separated from Group applications or data they don’t need. When your company sees that it is under siege, there are several important things that can be done in response: mobilize your core response team, and communicate the attack to the organization. Work together and ensure that people immediately report detected breaches and Cybersecurity is a $445 billion before, the during, and the after. security loopholes, and act swiftly problem and some predict that How well your company grasps to mitigate damage. Throughout figure could rise to $6 trillion by and is prepared for each phase the crisis, the company must 2021. The finances, operations, can make an enormous ensure it actively manages customer data, R&D, intellectual difference in whether communications with property, and brand reputations of a breach proves internal and external all companies are at risk. Yet many relatively innocuous stakeholders, and organizations still believe that a or takes a massive that it continues to robust defense is all they need. toll on your meet its regulatory- But they may experience a rude business. reporting duties awakening: no defense is 100% The period before and deadlines.
impenetrable. Companies must an attack can last Once the dust has 25 ramp up their organization´s as long as the attacker settled, the company
resilience and recover gracefully chooses. For defenders, Oriol Solans, should work across after even a serious security lapse. this is the time to take critical Partner, functions and units Recent BCG research steps: create awareness among The Boston to understand the Consulting indicates that more than 70% of both IT and nontechnical staff of Group attack and ensure that breaches exploit nontechnical the potential for cyberattacks. It staff have plugged the vulnerabilities. The lesson is essential that your IT staff be holes and updated defenses and is that cyberresilience must able to recognize early signs of an processes. And, of course, remain extend beyond the technical attack and react effectively; and vigilant. Be sure to study the root- IT domain to the domains of ensure that nontechnical staff cause analysis of the breach and people and processes in order to understand the importance of to incorporate the knowledge foster an appropriately security- being prudent. gained from the experience. LT conscious culture. Also, think carefully about According to BCG, building the design, implementation, BY JORGE BECERRA, SENIOR PARTNER AND MANAGING DIRECTOR, THE BOSTON organizational cyberresilience and configuration of your CONSULTING GROUP, AND ORIOL SOLANS, entails understanding the three company technology system PARTNER AND MANAGING DIRECTOR, THE phases of a successful attack: the –especially access rights. Aim BOSTON CONSULTING GROUP. Photos: Courtesy of BCG
SECOND QUARTER 2017 LATIN TRADE 500 THE LATIN TRADE THE LATIN By David Ramírez By David INNOVATING AT FULL SPEED 26
Latin Trade reports on the performance and the innovations being implemented by the LT 500, the ranking of the 500 largest firms operating in Latin America in terms of U.S. dollar revenues. 500LATIN TRADE SECOND QUARTER 2017 Innovation in times of austerity does not necessarily mean spending more on research and development, but rather knowing how to invest.
he companies of the LT 500 continued to confront head- winds in 2016 for the third year in a row, and this is re- flected in disappointing sales, which declined to $1.86 trillion from $1.9 trillion in 2015. Even so, strategies such as reduc- ing costs, restructuring debts, expanding market Tshare, and increasing efficiency through innovation yielded results, as can be seen in higher profits. The 500 largest firms in the region posted net in- come of $77.38 billion last year, almost six times
higher than in 2015, although this was partly due 27 to improved exchange rate stability in the region, following the significant depreciation of currencies against the US dollar in 2015. Corporate performance varied considerably among industries and even within them. The energy sector, which includes petroleum, gas, and electricity and accounts for the highest revenue among the LT 500, posted sales of more than $557 billion (30% of the total) and profits of nearly $19.5 billion in 2016. Those results represent average growth of 26% and 78%, respectively, compared to 2016. The oil companies regained lost ground mainly as a result of more stable crude oil prices, although their balance sheets continued to be weak. Petrobras (#1 in the LT 500) increased revenues by 5% and reduced its losses by 49%, while sales of Photo: Shutterstock 500 SECOND QUARTER 2017 LATIN TRADE Petrobras’s platform ship, “Cidade de Saquarema”, departs Niteroi in the state of Rio de Janeiro. Photo: Courtesy of Agência Petrobras Photo: Courtesy of
The electricity companies improved, mainly in Brazil, due to more favorable climatic conditions.
Pemex (#3) fell by 23% and its losses contracted the relative by 78%. The electricity companies improved, recovery of mainly in Brazil, due to more favorable climatic commodity conditions. prices. The Revenues of retailers (the second largest sector mining sector in terms of sales) improved by 9% and net profits as a whole rose by 55% on average last year. grew by an Total revenues were more than $278.5 billion average of 10%
28 and profits jumped to $22.5 billion in spite of the in revenues, general slowdown in household consumption in to $109 billion, the region. and saw JBS (#3), the largest packed meat company on profits expand the planet, recovered in sales with a 25% increase, by 126%, to but financial costs eroded profits, which fell $10 billion, over the
by 90%. Overall, the food sector posted sales of Bittencourt Photo: Courtesy of Julio $174.4 billion and profits of $3.8 billion, reflecting previous year’s increases on average of 10% and 52%, respectively. performance. Except in Brazil, the largest telecommunication companies showed reductions in sales and profits, INNOVATE OR VANISH led by América Móvil of Mexico (#4), with declines of 9% and 79%, respectively. In spite of some encouraging news, like relative The mining company Vale (#5) stands out in the price stability in commodities and a less hostile top 10 of the LT 500 for its dynamism in revenues international environment than in 2016, the be- and profits, which moved north by 33% and 136%, havior of other economic variables in 2017 sug- respectively. The company was able to reverse gests that the LT 500 companies will have to ad- some of its losses from previous years, thanks to just to much less buoyant conditions in the short
LATIN TRADE SECOND QUARTER 2017 Fortunately, innovation in times of austerity does not necessarily mean spending more on re- search and development (R&D), but rather know- ing how to invest your money. The 2016 Global Innovation 1000 Study recently published by PwC shows that the corporations that invested a high share of their revenue in R&D—case in point, Intel (which in 2016 spent 20% of revenues on the ef- fort)—were not necessarily the most innovative in 2016. Instead, firms spending less than Intel, and others, are at the top of the ranking: Apple (with an R&D spending-to-revenue ratio of 3.5%), Alpha- bet (16%), 3M (5.8%), and Tesla Motors (17.7%). Many of the LT 500 excel for their achieve-
Photo: Shutterstock ments in innovation, but for this report we chose to focus on five leaders, both at the global scale— General Motors (GM ranking #55) and Telefónica to medium terms. That reality must be part of any (#8)—and at the regional level—Natura (#187), review of the business growth model, especially if Grupo Arcor (#197), and Empresas Públicas de these companies are to adapt to the challenges of Medellín (EPM #74). LT
the Fourth Industrial Revolution. DAVID RAMÍREZ REPORTED FROM MIAMI
GM | CONNECTIVITY ON THE ROAD | NATURA: BEAUTY AND ENVIRONMENTAL Santiago Chamorro, VP Global Connected Customer Experience, GM SUSTAINABILITY
Natura is a model interview from the Detroit of innovation. The headquarters. Brazil-based multi- The firm’s huge innovation latina invests about bet on connectivity made years 2.6% of revenues on ago through the launch of R&D every year for OneStar, GM’s road assistance technological inno-
system that allows remote di- vations in the areas Photo: Courtesy of Natura agnostics of a car’s mechanical of product, sustain- Daniel Gonzaga, Product Development
Photo: Courtesy of General Motors Photo: Courtesy of General condition, has paid off hand- ability and “expansion Director, Natura
somely, according to the execu- of the cosmetic experi- 29 Autonomous vehicles, tive. One of the biggest chal- ence,” Daniel Gonzaga, product development electric cars, more efficient lenges, Chamorro explained, is director, told Latin Trade in an interview. For powertrains, carpooling, to match the speed of techno- Natura, expanding a customer’s experience apps for rideshare, and logical progress with the rather revolves around Well-Being and Senses, a full connectivity for slow cycle of a product such as relatively new concept of achieving happi- entertainment and remote a vehicle. ness through harmony with spirit, senses mechanical diagnostics “The challenge is how to and nature. onboard are some of the incorporate very dynamic ele- The company’s innovation strategy is foremost innovations by ments into the driving experi- supported by a large network that includes GM, Latin America’s most ence,” he pointed out. GM’s re- entities focused on research, partners in the popular carmaker in terms sponse is continued innovation supply chain, development agencies and of sales “Technology is a in areas such as information consumers. In-house studies on biodiversity complement to the vehicle,” and entertainment systems, and skin are also key inputs for innovation. Santiago Chamorro, vice and the functionalities of mo- “With these findings, we constantly seek to president, global connected bile phones while observing improve our products, such as our face care customer experience, told the necessary safety precau- and sun protection lines,” Gonzaga said. The Latin Trade in a telephone tions, he emphasized. strategy could not be more successful.
SECOND QUARTER 2017 LATIN TRADE 30 Photo: Shutterstock
LATIN TRADE SECOND QUARTER 2017 TELEFÓNICA: the operator’s brand in the Bra- ernments which “reduces costs A STEP TOWARDS zilian market. The expectation for citizen services by up to 80% is that this innovation will offer and improves response times by COGNITIVE a much-improved interaction up to one third,” according to the INTELLIGENCE between clients and automated executive. customer service representatives The platform was developed The Spanish multinational’s and, in time, will process cli- by Telefónica Open Future, the most recent innovation is the ent responses through a system company’s global program to fos- AURA platform. This makes Tele- that resembles more closely the ter innovation and entrepreneur- fónica “the first company in the human brain’s functioning, in- ship, a key component of the industry to provide its customers cluding the ability to reason and firm’s innovation strategy. with the possibility of manag- solve problems. The latter also includes pro- ing their relationship with their Sanfelice also highlighted cesses for handling Big Data and provider based on cognitive other company strategies in the use of “squads”, or multi- intelligence,” said Ricardo San- innovation. Vivo156 is an elec- disciplinary teams, that work felice, vice president for digital tronic communications platform on innovation projects inside strategy and innovation at Vivo, linking citizens with local gov- Telefónica.
EPM: ARCOR: NUTRITION SEIZING ENERGY’S WITH FLAVOR
POTENTIAL Gabriel Raya Tonetti, Santiago Acosta Maya, corporate manager Development and Innovation of research, Manager, EPM development and innovation, Arcor
Photo: Courtesy of EPM “We have a global vision spaces. Acosta Maya said of innovation that we ap- that this system can save Photo: Courtesy of Grupo Arcor Photo: Courtesy of Grupo ply locally,” said Santiago users up to 20% on their Acosta Maya, development electric bill. and innovation manager, Other EPM initiatives as he explained to Latin include the incorporation The growing concern about healthy eating is Trade the multilatina’s in- of digital technologies for a leading challenge for innovation in the food novation strategy. monitoring infrastruc- industry. “We have to increase our portfolio not The company faces a ture networks, the use of only to provide foods, but also to offer nutritional rapidly changing environ- “the internet of things” to products that have flavor and texture,” Gabriel
ment that demands new detect technical and non- Raya Tonetti, corporate manager of research, de- 31 approaches and products technical electricity losses velopment and innovation, told Latin Trade. such as development of (mostly illicit connections), Arcor’s innovation model includes specialized renewable energies, infra- using robots to repair pipe- R&D teams, incentives through the Arcor Award structure network moni- lines from the inside, and for Innovation, and tapping external knowledge toring, solid-waste man- adapting public phones to through alliances with research centers, suppliers, agement, and increasing serve as stations for re- and strategic partners in the production process, the availability of potable charging prepaid cards for such as 3M, DuPont, and Cargill. water. EPM has managed electricity consumption. Recent successes of the Argentinean multi- to take on these challenges EPM’s private equity fund national in innovation include the development as opportunities for in- finances innovative start- of modified starch, an algae-based pasta, and novation. A case in point ups. “Innovation implies biodegradable packing materials. Arcor earmarks is the firm’s solution of us- risks and incentives, but about 0.5% of its sales to R&D each year. The ing natural gas not only to we have learned to man- multilatina is also advancing in other innova- generate heat, but also as age the risks in a responsi- tions to respond to the demand of specific mar- a coolant for air condition- ble way,” Acosta Maya said. ket segments, such as millennials, and gluten- ing systems in large office intolerant people suffering from celiac disease.
SECOND QUARTER 2017 LATIN TRADE Interview | LATAM Airlines Group |
Enrique Cueto, CEO, 500 LATAM Airlines Group THE LATIN TRADE THE LATIN By Emily Russell By Emily
“AIR TRAFFIC IN THE REGION HAS THE POTENTIAL TO DOUBLE OVER THE NEXT 20 YEARS” Photos: Courtesy of LATAM Airlines Group Photos: Courtesy of LATAM
LATAM Airlines Group today is Latin America’s leading airline group. Born out of the association of LAN and TAM, the group now serves 140 destinations in 25 countries. CEO Enrique Cueto spoke with Latin Trade about growth potential, long-term strategies and innovation. 32
It’s been a challenging few years since LAN and the two companies? TAM merged in 2012. What were the difficulties in The most significant synergy has been the con- integrating the two companies? solidation of the largest route network in Latin With the association of LAN and TAM we have America. The networks of LAN, TAM and their affili- created an unprecedented airlines group bringing ates were complementary with little overlap, which together airlines from different countries under a has enabled us to focus on improving connectivity single brand with a global presence. While it will to, from and within the region. be another few years until we are ‘100% LATAM’ with completely integrated processes and branding, Where does LATAM see the most growth potential? we’ve made extraordinary progress. We are committed to being a driving force in the This is not to say that it’s been easy and there development of aviation in Latin America and share have been a number of challenges. However, our IATA’s view that air traffic in the region has the po- strategy has been solid and we’ve been able to effec- tential to double over the next 20 years. Both our do- tively mitigate these challenges, as borne out by a mestic markets –in Chile, Argentina, Peru, Colombia, full year profit and dividend payments in 2016.” Ecuador, and Brazil– and international services are essential to our growth strategy. What synergies have been unlocked by combining First, we are implementing a new travel model for
LATIN TRADE SECOND QUARTER 2017 domestic flights, which we proj- ect will increase traffic by 50% by 2020. With the incorporation of selected low-cost practices, we can achieve efficiencies and offer passengers reduced fares as well as greater flexibility. At the same time, we will retain legacy airline characteristics such as a frequent flyer program and free on-board entertainment. Cueto unveiling Likewise, we see potential for the LATAM livery to growth in international air travel employees in Santiago with Latin Americans traveling much less internationally than in other parts of the world. We are working to improve the connectiv- ity between the region and North America and Eu- rope through joint business agreements (JBAs) with cilitate up to a 40% reduction in basic fares. American Airlines and International Airlines Group. How is LATAM approaching the challenge of cli- How is the partnership with Qatar? mate change? In December 2016, Qatar Airways became a 10% To reduce our impact on climate change, we are shareholder of LATAM Airlines Group, demonstrat- focused on fleet modernization, improving opera- ing a great commitment to our long-term project. tional efficiency and pursuing the smart use of fuel. This partnership not only strengthens our financial By operating the most modern and efficient aircraft position, it also allows us to explore new opportuni- –such as the Boeing 787 Dreamliner, Airbus A350 ties for connectivity with Asia and the Middle East. and Airbus A320neo– we have been able to reduce fuel consumption and emissions. By the end of 2016, Which cost-saving strategies has LATAM been we had also introduced environmental management working on? systems to over 90% of our operations and were able Over the last three years, the company’s cost-sav- to reduce our total greenhouse emissions by 2.3% ing initiatives have resulted in efficiency gains and over the course of the year. reduced operating costs, in spite of high inflation rates in the region. One of our focuses has been the What is LATAM’s approach on innovation? management of investments, particularly fleet com- There are many ways we have driven innovation. mitments. For the 2016-18 period, we have reduced One of the most visible signs has been our commit- our expected fleet assets by over $2 billion by defer- ment to building one of the most modern aircraft 33 ring or cancelling aircraft deliveries. fleets in the industry. From a customer perspective, As we look to the future, our new domestic travel another area of innovation has been the digital ex- model will play an important role in achieving fur- perience, with investment in our website, mobile ther efficiencies. apps and other digital tools. As we look to the fu- ture, this will continue to be a priority. LATAM is implementing a “low-cost carrier” for- mat for domestic routes. What savings is the food- What are your expectations for LATAM in the next on-demand service expected to produce? five years? While we have incorporated some low-cost prac- We have pioneered the development of aviation in tices on domestic routes, such as the unbundling Latin America and have helped to double –and even of fares, we are not introducing a low-cost model. triple– traffic in our domestic markets over the past ‘Mercado LATAM’ offers passengers the opportunity 10 years. Through our new domestic travel model and to choose from a wide selection of premium prod- planned JBAs, we are confident we can play a signifi- ucts, including brands and specialties unique to cant role in bringing about IATA’s forecasted doubling each market, at competitive prices. The cost savings of air traffic in the region by 2035.LT of the service are intrinsically linked to the wider EMILY RUSSELL REPORTED FROM SANTIAGO DE CHILE savings of our domestic travel model, which will fa-
SECOND QUARTER 2017 LATIN TRADE Interview | Codelco | 500 CODELCO: THE LATIN TRADE THE LATIN TIGHT MANAGEMENT POSTS GAINS IN TOUGH ENVIRONMENT
Nelson Pizarro, CEO Codelco By Emily Russell By Emily
Nelson Pizarro is a lean, operating divisions helps spry man in his mid- to ensure corporate con- seventies. A mining trol over maintenance industry veteran, he has planning. Another “ex- led Chile’s state copper traordinary tool”, said miner, Codelco, since Pizarro, is the perfor- 2014 and his hallmark mance dialogue mecha- is discipline. Under his nism: after each shift, leadership, the world’s outgoing and incoming largest copper producer teams discuss emerging has instituted far-reaching problems and immedi- savings and productivity ately seek solutions. programs that are Plans for investments underpinning its viability. to sustain production at
“When I took over the around 1.7 million tonnes Photo: Courtesy of Codelco company, we were coming per year from Codelco’s In the long run only technology out of a strong copper price own mines were reduced cycle when it was more and innovation will be able to to $18 billion through profitable to produce at drive further efficiencies, said 2020 from earlier projec- any cost,” Pizarro told Latin Pizarro. “This means breaking tions of $25 billion by op- Trade. It was crucial to dras- timizing and prioritizing
34 habits, good and bad ones, which tically cut costs for Codelco projects. The first major to survive in the new low- have been built up over decades.” investment project to price environment. come online will be the The company embarked on a cost-cutting program landmark conversion of the century-old Chuquicamata in 2013 covering key inputs, operational improvements open pit mine into an underground operation slated and third-party contracts. Direct production costs were for 2019. driven down for three consecutive years; by the end In the long run, however, only technology and in- of 2016 the state miner’s costs were lower than the novation will be able to drive further efficiencies, said average costs of Chile’s large private miners. Produc- Pizarro. “This means breaking habits, good and bad tivity has also improved by 13 percent since 2014. ones, which have been built up over decades,” he said. The savings made all the difference last year when Codelco is still the only mining company in Chile to Codelco faced the weakest copper prices in a decade, use automated trucks –pioneered at its Gaby mine and its ore grades and production were lower than in when it opened in 2008– but has been slow to intro- 2015. The miner saved $433 million in 2016, allowing duce them at its other operations due to “the natural Codelco to post a pretax profit of $500 million last year. resistance of people”. A key focus of the efficiency drive is on operational Its newest mine, Ministro Hales, began operations in continuity to reduce unplanned stoppages. A compre- 2010 and is easily the company’s most productive. Its hensive master plan covering all seven of Codelco’s Calama-based operations are controlled remotely at a
LATIN TRADE SECOND QUARTER 2017 “We can’t use the same people that have been doing the same thing for 20-30 years. Not anymore.”
CODELCO AT A GLANCE
Copper production from own mines: 1.71 million tonnes in 2016 Copper production including third- party operated: 1.83 million tonnes in 2016 Investment in structural projects: $18 billion through 2020 Debt of $14 billion with net debt/ Ebitda ratio of 3.3 Seven operating divisions, with approximately 18,600 direct and 47,100 indirect employees
Contributed over $100 billion to state coffers
A worker monitors a process over 45-year life inside the plant at a copper refinery in Chile. Photo: Shutterstock
distance of 930 miles from a control room in Santiago. of 1.8 million tonnes produced by the state-owned Likewise at Codelco’s headquarters, there are displays company (including its interests in third-party opera- of all operations for observation purposes only. “I don’t tions) and 5.6 million tonnes of total copper production need anyone to tell me what’s going on; I can see for per year. Aging mines, less accessible deposits, more myself,” said Pizarro. complex mineralization, and declining ore grades will
The company’s new Codelco Tech subsidiary, which require best efforts just to maintain current output. 35 brings the BioSigma, IM2, and Codelco Lab subsidiaries What’s more, the consensus long-term price is $2.80- under one umbrella, will not conduct R&D itself but 2.90 per pound of copper, a level too low to bring about rather seek solutions to specific operational problems a boom in major project investment, meaning copper from external experts and institutions in technological supplies will remain tight, Pizarro said. centers and universities. In 2017, the executive forecasts, average copper In addition, champions of technology and innova- prices will be a little over $2.50, an improvement over tion are being placed in each division to encourage last year’s $2.21 per pound. innovation. Despite a promising first quarter with a pretax profit Also, new worker profiles are required to take tech- of $534 million, Pizarro said 2017 will be complex with nology and innovation to the next level, according to a fractious domestic scenario, presidential elections, Pizarro. “We can’t use the same people that have been and a series of collective bargaining processes in the doing the same thing for 20-30 years. Not anymore.” second half. “We’ve come out of a difficult year. It will Young professionals who dare to innovate are needed, be hard to maintain the impetus and the prudence and he said. sobriety of the previous year,” he concluded. LT Looking to the future, Pizarro said it will be hard for Codelco and Chile – the world’s foremost copper-pro- EMILY RUSSELL REPORTED FROM SANTIAGO DE CHILE ducing country – to respectively push past the barriers
SECOND QUARTER 2017 LATIN TRADE Interview | LOJAS RENNER, BRAZIL |
500 José Galló, CEO, Lojas Renner THE LATIN TRADE THE LATIN By Thierry By Thierry Ogier 36
LOJAS RENNER: EXPAND, DIVERSIFY, MODERNIZE Photo: Courtesy of Lojas Renner
Lojas Renner, the fast fashion retailer based in Bra- down stores in 2016, Lojas Renner succeeded in zil’s southernmost state, has successfully weathered growing in its domestic market last year. the recent, deep recession in its home turf, and now “While the clothing market as a whole fell by looks ahead to its first international experience in 6%, we registered 5% growth on a same-store ba- neighboring Uruguay. sis,” Lojas Renner’s CEO José Galló told Latin Trade. Although some of its competitors had to close Sales doubled in five years to reach 6.4 billion reais
LATIN TRADE SECOND QUARTER 2017 “Our e-commerce operations are now growing much more rapidly than those of other companies in our industry in Brazil. We are definitely a fast retailer and we see our future as a mix of brick-and-mortar stores and a well-developed e-commerce operation.” José Galló, CEO, Lojas Renner
[$1.9 billion]. “The most important [result] was to first expanded in the southeastern region, Brazil’s preserve our profitability, thanks to a gross margin main consumer market, in the late 1990s, and later of 55.7%. Net income was up 8% [in local currency]. in the Northeast during the consumer boom in the Last year, we also reached an EBITDA margin of years before 2010. It is currently preparing its first 23.4%, which is a record as far as the company is international openings, as it intends to inaugurate concerned,” he said. three stores in Uruguay this year (one in September Lojas Renner has pursued an aggressive expan- and two in November). sion strategy in spite of the country’s economic Meanwhile, Lojas Renner has also diversified its downturn. Last year, the company launched 64 new business through the acquisition of Camicado, a stores and now intends to invest an additional 500 home and decoration retailer, in 2011, and the launch million reais to create between 60 and 65 new stores of a youth-oriented retail chain called Youcom. Both in 2017. Part of the funds will also be invested in have been growing rapidly (to 89 and 67 stores at technology and automation. present, respectively, with plans to launch another 15 Expansion has also meant diversification – geo- Camicado and 25 Youcom stores this year). graphically and in terms of formats. The company Camicado is the favorite store of São Paulo dwellers looking to buy a wedding present (22% of respondents said so in a recent survey published in EUROPEAN May), acording to an opinion poll from Datafolha. ORIGINS The fast fashion model means that Lojas Renner usually launches eight collections per year in order Lojas Renner was set up as to charm (mostly) female customers. The designs a family-owned business by are created by staff members, while the manufac- German immigrants in the mid- turing process is outsourced. 1960s in the southern state of As a manager, Galló has also focused on new Rio Grande do Sul. When José business. “We have invested in automation in our Galló was appointed CEO in distribution center, and we have started operating in
1991, Lojas Renner only had e-commerce. Our e-commerce operations are now 37 eight stores and 800 staff. Now, growing much more rapidly than [those of] other it has a network of 440 shops companies in our industry in Brazil. We are defi-
Photo: Courtesy of Lojas Renner and 19,000 employees. nitely a fast retailer and we see our future as a mix The US retailing group JC Penney controlled Lojas of brick-and-mortar stores and a well-developed Renner between 1998 and 2005, when it decided to exit e-commerce operation – so clients decide when Latin America. Lojas Renner was later floated on the and where they want to buy or pick up their goods.” Bovespa stock exchange. Galló said. Galló has stayed firmly at the helm of the group dur- The need to improve competitiveness of its fast- ing more than 25 years. Now age 66, he may well start growing business has driven Lojas Renner invest- thinking about his future beyond Lojas Renner, although ments in innovation and technology. “In order to get he avoids talking about the issue publicly. “I will stay as on the digital highway, you need to adopt an up-to- long as our investors want me to stay”, he said simply. date and flexible technology. This multifunctional- Leading investors include Aberdeen Asset Management, ity (stores/e-commerce, inventory management, T. Rowe Price Associates, JP Morgan Asset Manage- automation of distribution center) helps deal with ment, and Black Rock. Those firms may well find it hard complexity,” Galló said. LT to identify a qualified substitute for Galló. THIERRY OGIER REPORTED FROM SÃO PAULO
SECOND QUARTER 2017 LATIN TRADE Interview | Raízen | 500 CITIZEN THE LATIN TRADE THE LATIN CANE By Thierry By Thierry Ogier
Luis Henrique Guimarães, CEO, Raízen Photo: Courtesy of Raízen
The leading manufacturer of sugarcane ethanol and Brazil’s third biggest producer of fuel, Raízen has gained ground in a few years with its bet on an energy matrix that is cleaner and renewable.
38 The leading Brazilian sugar cane and biofuels we achieved cost reductions in our operations company, Raízen, S.A., has broken records time through zero-based budgeting. Additionally, we and again since its creation in 2011. successfully issued bonds in the international For the sustainable energy giant –set up as a market and new certificate of agribusiness re- joint venture between Cosan S.A. Indústria e Co- ceivables (CRA), performed tax optimization, and mércio, Brazil’s leading ethanol and sugar cane reduced operating expenditures,” he said. Also, company, and the fuel distribution subsidiary of Raízen’s combined EBITDA reached 6.3 billion Shell Brasil Ltda.– last year’s performance had an reais ($2 billion) in the crop year, an increase of especially sweet taste. 11.4%. While sales rose by nearly 14% to 74.1 billion Raízen investments totaled 2.9 billion reais reais ($22.2 billion) in spite of the recessionary ($871 million) in 2016 and the company intends environment in Brazil, the company’s net earnings to invest the same amount during the current jumped by more than 75% (compared to the previous crop year. year) to 2.4 billion reais ($721 million). “Our vision is to keep moving,” said an upbeat “The past year’s crop was a year of records for Guimarães. “We look at all the challenges related Raízen,” said Luis Henrique Guimarães, CEO of to energy in Brazil and embrace those that make Raízen, in an interview with Latin Trade. sense for our company’s strategy. That way, we “We made progress in all areas. Financially, act throughout the entire value chain, from
LATIN TRADE SECOND QUARTER 2017 “Our vision is to keep moving. We act throughout the entire value chain, from production to commercialization, including ethanol, sugar, and energy production and fuels distribution, and investments in innovative and challenging projects.”
Luis Henrique Guimarães, CEO Raízen
production to commercialization, including RAÍZEN-ISTICS ethanol, sugar, and energy production and fuels distribution, and investments in innovative and Last but not least, include improving challenging projects.” distribution logistics distribution logistics Examples of these projects include the con- is a strategic area in a – as in the case of the struction of a plant to produce second-generation country of continental liquid distribution ethanol [cellulosic ethanol], a plant for electricity dimensions, such terminals of Sinop generation based on biogas production, and elec- as Brazil. “We invest (state of Mato Grosso tricity co-generation and production for Raízen’s heavily in logistics do Sul) and Marabá own consumption and for the grid. and distribution (state of Pará), and soon Innovation has proved to be a key market infrastructure,” said in Miritituba (state differential for Raízen. “Our biggest challenge CEO Luis Henrique of Pará) and São Luís was to establish our own, new culture, seeking Guimarães. “Our (state of Maranhão) – to identify strengths in such complementary recent investments in and better means of cultural backgrounds, represented by distribution bases in supplying Shell brand approximately 25,000 employees who are now the North of Brazil say a resellers in areas where forming a new company,” the CEO explained. lot about our position,” options were scarce, Since the company was formed, Raízen has he said. he explained. Raízen created several processes to manage the flow of In the last few years, has also won two sugarcane from the fields to the production units Raízen has intensified terminal concessions and from there to the points of sale. This involved investments in Brazil’s in the Amazonian revamping everything from harvest productivity North, Northeast, and port of Santarém, and to road haulage and logistics improvement. Center-West regions. these new operations The company is also committed to pursuing re- “We’ve developed are “aligned with the search and development in an effort to reduce fuel infrastructure projects process of strategic emissions. “Pulse, Raízen’s initiative in relationship that contribute to the positioning in the 39 with startups, will soon have a co-working space to company’s goals,” said region,” Guimarães develop their projects and new ideas that will push Guimarães. These emphasized. the agribusiness that is part of our DNA to new limits,” he said. Raízen shares knowledge and technology with The world of Raízen (2016) suppliers which improves the quality of planta- Sales: 74.1 bn reais ($22.2 bn) tions and cultivated areas, and total recoverable sugar, so productivity is raised. “Doing more with 24 production units the same investment is part of our company’s 4.5m tons of sugar guiding principles, and one that we share with 2.1bn liters of sugarcane our business partners. By doing so, we strengthen ethanol produced the position of ethanol in the Brazilian energy matrix, thus contributing to a cleaner and more Electricity co-generation sustainable matrix, with fewer emissions,” Guimarães (installed capacity): 940 MW explained. LT
THIERRY OGIER REPORTED FROM SÃO PAULO
SECOND QUARTER 2017 LATIN TRADE THE LATIN TRADE 500 LATIN AMERICA’S LARGEST COMPANIES 500 THE LATIN TRADE THE LATIN Photo: Shutterstock 40
Latin Trade presents a new edition of its LT 500 ranking of the performance of the biggest Latin American multilatinas. In 2016, the strength of Latin American companies was tested once again, and the charts show the results of the effort to overcome adverse global economic conditions and the pecularities of the region. The team of economists of Latin Trade also prepared a breakdown of “winners and losers” by profits and by revenue, presenting the Top 10 in each category. Another ranking identifies the five leading companies in terms of absolute profits. We close with a comparison that shows the Top 10 by revenues in 2012 and their position in the rankings for 2017. This comparison exercise shows the evolution of the leading regional companies and the changes that took place in sectors and countries.
LATIN TRADE SECOND QUARTER 2017 LATIN AMERICA’S LARGEST COMPANIES THE LATIN TRADE 500 LATIN AMERICA’S LARGEST COMPANIES
RANK REVENUES PROFITS TOTAL ASSETS COMPANY, COUNTRY SECTOR 2016 % CH. 2016 % CH. 2016 % CH. 2017 /16 US MILL. 2016/15 US MILL. 2016/15 US MILL. 2016/15 1 2 Petrobras, Brazil Energy $86,707.7 5.3 -$4,548.5 49.0 $246,983.8 7.1 2 3 Pemex, Mexico Energy $52,355.8 -22.6 -$9,294.4 77.5 $112,994.9 9.8 3 5 JBS, Brazil Food $52,278.4 25.3 $115.4 -90.3 $31,547.3 0.6 4 4 América Móvil, Mexico Telecom $47,305.6 -8.7 $419.5 -79.4 $73,476.6 -2.3 5 9 Vale, Brazil Mining $29,036.6 32.6 $4,084.4 136.1 $99,013.9 11.9 6 8 BR Distribuidora, Brazil Energy $26,583.1 6.7 -$96.7 67.5 $9,633.9 20.4 7 6 Walmart de México Retail $25,819.6 -6.4 $1,617.5 5.8 $13,964.1 -5.0 8 7 Telefónica, Spain Telecom $24,954.5 -9.9 $3,123.0 -24.0 -- -- 9 11 Grupo Ultra, Brazil Holding $23,734.5 22.5 $479.2 24.4 $7,413.0 38.1 10 20 Raízen Combustíveis, Brazil Energy $20,908.5 32.9 $470.2 43.9 $4,608.8 33.2 11 17 Pet. Ipiranga, Brazil Energy $20,309.9 21.6 $372.0 43.1 $4,341.1 26.9 12 14 Femsa, Mexico Beverage $19,375.3 7.3 $1,025.3 0.0 $26,461.6 11.5 13 47 Eletrobras, Brazil Energy $18,639.8 123.3 $1,051.2 128.4 $52,314.9 36.5 14 35 Éxito, Colombia Retail $17,209.1 62.3 $14.5 -92.0 $20,827.6 26.3 15 15 CFE, Mexico Energy $16,790.6 -4.5 $3,698.3 167.9 $71,421.2 -1.7 16 13 Copec, Chile Energy $16,699.3 -8.0 $554.2 2.8 $21,446.5 7.6 17 19 AB InBev, Belgium Beverage $16,499.0 -7.7 $6,229.0 -19.1 -- -- 18 10 Casino, France Retail $16,070.3 0.3 $567.1 -25.4 -- -- 19 18 Ecopetrol, Colombia Energy $15,907.0 -3.8 $521.5 141.2 $40,426.2 3.5 20 22 Cencosud, Chile Retail $15,485.0 -0.3 $581.1 77.2 $15,658.5 9.6 21 21 Carrefour, France Retail $15,290.4 -1.7 $749.4 -2.4 $7,901.8 24.2 22 12 Techint, Argentina Holding $15,238.0 -20.3 -- -- $29,096.0 -- 23 26 Braskem, Brazil 1 Chemical $14,624.9 20.8 ------24 23 Alfa, Mexico Holding $14,247.9 -4.9 $112.7 -48.5 $16,904.6 9.3 25 27 AmBev, Brazil Beverage $13,992.4 16.9 $3,849.7 21.0 $25,725.3 11.4 26 30 Carrefour, Brazil Retail $13,794.3 37.3 $418.2 65.8 -- -- 27 37 Telefónica, Brazil Telecom $13,043.0 26.4 $1,253.5 43.1 $31,317.3 20.3 28 28 YPF, Argentina Energy $12,993.2 10.6 -$1,746.3 -607.0 $26,044.5 -4.7 29 16 CBD, Brazil Retail $12,719.5 -28.2 -$147.9 -317.9 $13,874.1 14.7 30 25 Grupo Bimbo, Mexico Food $12,228.3 -3.8 $286.1 -4.6 $11,890.0 2.7 31 24 Cemex, Mexico Cement $12,168.6 -4.7 $680.6 877.5 $29,085.6 -7.5 32 34 Falabella, Chile Retail $11,836.4 7.9 $912.7 24.2 $20,868.4 17.1 33 31 Enel, Spain Energy $11,719.4 -3.7 $2,455.8 -9.4 $32,469.5 11.3
42 34 32 Gerdau, Brazil Steel $11,552.8 3.5 -$887.0 23.9 $16,763.9 -6.6 35 29 Codelco, Chile Mining $11,536.8 -1.3 -$275.4 81.5 $33,402.6 -0.1 36 43 Bunge Alimentos, Brazil Food $10,843.8 18.6 $306.8 -1.0 $5,367.8 9.2 37 48 BR Foods, Brazil Food $10,350.4 25.5 -$114.3 -114.3 $13,176.9 27.4 38 46 Claro Telecom, Brazil Telecom $9,965.6 15.5 -$263.2 -85.1 $19,657.1 12.6 39 50 Cargill Agrícola, Brazil Agri. $9,914.2 20.6 $205.4 93.0 $3,906.8 15.1 40 38 GN Fenosa, Spain Energy $9,529.2 -7.0 $1,089.8 -13.5 -- -- 41 56 Walmart, Brazil Retail $9,023.7 20.2 ------42 39 LATAM Airlines, Chile Airlines $8,988.3 -7.7 $69.2 131.6 $19,198.2 6.1 43 44 Coca-Cola Femsa, Mexico Beverage $8,619.0 -2.4 $488.4 -17.7 $13,543.4 11.1 44 41 Bodega Aurrerá, Mexico Retail $8,545.1 -9.5 ------45 36 Telcel, Mexico Telecom $8,525.7 -19.1 ------46 45 Nestlé, Switzerland Food $8,506.4 -5.3 ------47 40 AES, USA Energy $8,433.0 -3.1 -- -- $20,581.0 10.5 48 33 Volkswagen, Germany Vehic./parts $8,403.5 -24.0 ------49 52 Votorantim, Brazil Holding $8,204.1 9.4 -$383.5 -492.1 $24,423.3 15.0 50 42 EP Petroecuador, Ec. Energy $8,174.1 -12.0 $1,490.5 98.3 $10,923.9 13.1 * These companies did not present their balance sheet results in time to be included in this ranking: PDVSA, Odebrecht, Camargo Correa, Copersucar, Empresa Brasileira de Correios e Telégrafos. 1 Unaudited data. LATIN TRADE SECOND QUARTER 2017 LATIN AMERICA’S LARGEST COMPANIES
RANK REVENUES PROFITS TOTAL ASSETS COMPANY, COUNTRY SECTOR 2016 % CH. 2016 % CH. 2016 % CH. 2017 /16 US MILL. 2016/15 US MILL. 2016/15 US MILL. 2016/15 51 51 Grupo México, Mexico Mining $8,173.5 -0.1 $1,055.1 3.8 $22,661.2 1.8 52 59 Oi, Brazil Telecom $7,976.6 13.9 -$2,130.5 -68.6 $25,212.9 1.5 53 66 Org. Soriana, Mexico Retail $7,251.5 14.4 $203.1 -6.0 $6,260.0 6.0 54 53 Ternium, Argentina Steel $7,224.0 -8.3 $595.6 7,226.4 $8,322.9 3.2 55 54 General Motors, USA Vehic./parts $7,223.0 -7.6 -$374.0 39.9 $7,439.0 6.4 56 63 Enel Américas, Chile 6 Energy $7,145.5 8.3 $574.1 -38.6 $16,906.5 -22.6 57 49 Pepsico LAF, USA Food $6,820.0 -17.1 $887.0 530.6 $4,640.0 8.3 58 55 Oxxo, Mexico Retail $6,651.0 -4.3 $0.7 225.5 $2,897.3 12.1 59 82 Embraer, Brazil Industrial $6,577.2 26.5 $179.6 190.3 $11,664.8 0.0 60 60 FCA Fiat Chrysler, Italy Vehic./parts $6,531.6 -6.7 $5.3 105.6 -- -- 61 62 Dow, USA Chemical $6,279.0 -7.4 ------62 68 Americas Mining, Mexico Mining $6,210.0 3.3 $955.7 134.9 $16,399.9 5.6 63 88 Via Varejo, Brazil Retail $6,081.1 23.2 -$29.2 -913.0 $5,377.9 28.9 64 61 Walmart Superc., Mexico Retail $6,044.1 -11.7 ------65 244 Furnas, Brazil Energy $6,028.6 267.0 $2,899.8 16,209.9 $11,966.7 87.5 66 91 Marfrig, Brazil Food $5,932.1 22.6 -$208.4 -38.9 $6,216.1 16.1 67 83 CPFL, Brazil Energy $5,864.2 13.3 $276.4 24.8 $12,939.5 24.7 68 78 Cemig, Brazil Energy $5,760.1 5.6 $102.6 -83.8 $12,898.0 23.3 69 94 Lojas Americanas, Brazil Retail $5,554.8 21.0 $64.9 1.3 $6,374.8 21.3 70 87 Southern Copper, USA Mining $5,379.8 6.6 $776.5 5.5 $13,234.3 5.1 71 71 Millicom, Luxembourg Telecom $5,352.0 -6.8 $848.0 -23.5 $10,386.0 -1.7 72 72 Mexichem, Mexico Chemical $5,349.8 -6.3 $238.4 76.4 $8,806.0 1.6 73 73 ArcelorMittal, Brazil Steel $5,291.0 -7.1 $246.3 153.8 $9,272.0 6.7 74 99 Grupo EPM, Colombia Holding $5,283.5 19.5 $621.8 94.2 $14,309.4 7.5 75 64 Minera Escondida, Chile Mining $5,272.7 -19.8 $983.6 -8.2 $17,145.9 8.0 76 113 CSN, Brazil 1 Steel $5,261.9 34.0 ------77 65 ENAP, Chile Energy $5,217.1 -17.9 $181.3 7.3 $5,843.3 7.1 78 74 Sam's Club, Mexico Retail $5,210.4 -8.0 ------79 79 Sigma, Mexico Food $5,157.3 -4.9 $238.6 -35.0 $4,886.7 1.3 80 118 Amil, Brazil Health $5,144.1 38.9 -$99.2 -238.4 $5,178.5 51.9 81 76 American Airlines, USA Airlines $4,995.0 -9.8 ------82 105 Louis Dreyfus, Brazil Agri. $4,941.3 19.7 $28.3 124.9 $3,959.7 1.2 83 69 Telmex, Mexico Telecom $4,892.1 -16.2 -$86.2 -146.5 $6,325.2 -17.4
84 81 Liverpool, Mexico Retail $4,871.2 -8.0 $494.3 -7.4 $7,197.1 7.2 43 85 90 CMPC, Chile Pulp $4,865.7 0.5 -$17.3 -355.8 $14,859.9 0.6 86 110 Grupo Argos, Colombia Holding $4,849.8 21.4 $196.4 105.5 $14,913.0 12.4 87 95 Walmart Centroamérica Retail $4,818.7 5.1 $281.7 26.2 -- -- 88 97 Org. Terpel, Colombia Energy $4,809.4 6.4 $65.5 94.7 $1,377.0 11.4 89 70 Ford, USA 2 Vehic./parts $4,800.0 -16.8 -$1,109.0 -33.3 -- -- 90 101 TIM, Brazil Telecom $4,791.9 9.2 $230.3 -56.6 $10,633.5 17.3 91 84 Celulosa Arauco, Chile Pulp $4,761.4 -7.5 $213.8 -41.1 $14,006.2 1.4 92 107 Globo Com., Brazil Media $4,704.5 14.5 $600.2 -23.6 $6,090.4 6.7 93 109 TAM, Brazil Airlines $4,703.7 17.7 $2.1 101.1 $5,287.3 12.2 94 86 Grupo Televisa, Mexico Media $4,669.8 -8.5 $180.5 -71.4 $14,988.5 -8.2 95 104 TIM Celular, Brazil Telecom $4,647.4 8.7 $212.1 -60.3 $10,216.8 16.9 96 85 Grupo Carso, Mexico Holding $4,616.4 -9.7 $461.9 28.6 $5,313.3 -2.7 97 125 Anglo American, USA/UK Mining $4,594.0 -5.3 $462.0 17.3 -- -- 98 114 Neoenergia, Brazil Energy $4,553.3 19.8 $117.7 2.3 $8,577.7 31.1 99 98 Arca Continental, Mx Beverage $4,542.6 2.5 $438.1 4.3 $6,737.6 -11.3 100 530 Cresud, Argentina Agri. $4,496.4 709.9 $18.2 154.1 $10,794.9 2.1
1 Unaudited data. 2 Revenues don’t include Mexico. 6 Former Enersis. SECOND QUARTER 2017 LATIN TRADE THE LATIN TRADE 500 LATIN AMERICA’S LARGEST COMPANIES
RANK REVENUES PROFITS TOTAL ASSETS COMPANY, COUNTRY SECTOR 2016 % CH. 2016 % CH. 2016 % CH. 2017 /16 US MILL. 2016/15 US MILL. 2016/15 US MILL. 2016/15 101 89 Alpek, Mexico Chemical $4,374.1 -9.7 $175.8 10.3 $4,437.6 2.2 102 140 Sabesp, Brazil Water $4,325.8 44.2 $904.3 558.4 $11,274.6 30.6 103 57 Tenaris, Argentina Steel $4,293.6 -40.1 $55.3 168.4 $14,003.3 -6.7 104 96 Grupo Chedraui, Mexico Retail $4,293.5 -5.8 $94.7 -6.1 $2,583.9 -12.1 105 67 Schlumberger, USA Services $4,230.0 -29.7 ------106 111 Nestlé, Brazil Food $4,181.1 2.6 ------107 -- Irsa, Argentina 3 Holding $4,164.6 -- $80.4 -- $10,272.9 2.0 108 102 Avianca, Colombia Airlines $4,138.3 -5.1 $1.7 101.2 $6,351.3 -3.6 109 239 Grupo ISA, Colombia Energy $4,044.9 141.7 $712.0 219.7 $12,835.7 43.8 110 146 Raízen Energia, Brazil Energy $4,029.9 42.0 $576.6 378.4 $7,970.2 27.2 111 115 Copel, Brazil Energy $4,020.1 6.6 $294.2 -3.7 $9,338.2 26.0 112 116 Ind. Peñoles, Mexico Mining $3,983.7 5.9 $278.6 654.9 $6,881.4 7.1 113 100 Elektra, Mexico Retail $3,940.1 -8.6 $258.7 187.3 $10,632.2 -7.7 114 350 CHESF, Brazil Energy $3,913.4 278.3 $1,222.8 1,103.4 $7,094.3 85.3 115 121 Votorantim Cimentos Cement $3,895.8 8.2 $130.1 -36.6 $8,969.6 5.0 116 106 Nemak, Mexico Manuf. $3,843.2 -6.5 $262.4 -1.6 $4,456.6 6.7 117 199 Cosan Ltd., Brazil Food $3,841.0 20.4 $85.2 -27.6 $15,485.8 15.6 118 108 Coca-Cola, USA Beverage $3,819.0 -6.3 ------119 142 Alesat Combustíveis, Brazil Energy $3,812.5 31.1 $20.4 136.3 $520.4 42.6 120 120 Itaipu Binacional, Br/Py Energy $3,811.5 3.6 $1,170.0 -42.5 $12,937.8 -6.3 121 93 Cencosud, Argentina Retail $3,789.9 -17.8 -- -- $2,116.0 20.5 122 145 Cielo, Brazil Services $3,774.3 32.5 $1,229.0 36.7 $9,371.9 22.1 123 129 SMU, Chile Retail $3,694.7 12.1 $18.3 134.8 $2,707.6 6.2 124 131 André Maggi, Brazil Food $3,689.6 13.6 $96.0 -51.5 $3,809.2 4.6 125 103 Colgate, USA Manuf. $3,650.0 -15.6 $1,132.0 -6.4 -- -- 126 135 Energisa, Brazil Energy $3,623.9 18.6 $47.5 -43.0 $6,143.7 29.7 127 124 Antofagasta PLC, Chile Mining $3,621.7 12.3 $214.3 -69.5 $13,723.8 1.4 128 122 Eletropaulo, Brazil Energy $3,577.6 2.2 $6.4 -75.2 $4,162.3 22.4 129 92 Caterpillar, USA Manuf. $3,455.0 -28.1 ------130 188 RaiaDrogasil, Brazil Retail $3,453.9 51.6 $137.4 57.7 $1,736.5 44.3 131 119 Pepsico, Mexico Beverage $3,431.0 -6.9 -- -- $988.0 -0.6 132 123 Petroperú, Peru Energy $3,415.8 -2.2 $127.1 -13.9 $4,226.5 53.3 133 126 Gruma, Mexico Food $3,307.9 -2.1 $287.2 550.3 $2,733.3 6.3 134 137 Telecom, Argentina Telecom $3,297.7 8.1 $245.8 -4.0 $2,963.1 2.4 44 135 167 Coamo, Brazil Agri. $3,268.9 27.0 $262.4 25.6 $2,616.3 26.2 136 132 Cemig Dist. , Brazil Energy $3,251.4 2.5 -$99.4 -204.8 $5,041.8 21.6 137 127 UAL, USA Airlines $3,238.0 -3.8 ------138 134 Quiñenco, Chile Holding $3,235.3 5.7 $265.1 94.1 $55,150.7 8.4 139 117 Iberdrola, Spain Energy $3,229.9 -12.5 $315.1 -16.4 -- -- 140 128 Whirlpool, USA Manuf. $3,191.0 -4.7 $207.0 12.5 -- -- 141 138 Falabella Perú Retail $3,183.2 4.4 $239.3 50.2 $4,316.9 11.7 142 179 Tereos Int, Brazil 4 Food $3,130.9 19.9 $58.6 227.1 $4,138.9 11.7 143 197 CCR Rodovias, Brazil Services $3,067.1 41.3 $525.9 134.8 $7,534.6 35.7 144 160 Suzano, Brazil Pulp $3,032.3 15.8 $166.4 381.7 $9,052.4 23.5 145 161 Suzano Papel, Brazil Paper $3,032.2 15.8 $519.2 319.1 $9,020.7 24.6 146 173 GOL, Brazil Airlines $3,027.6 20.9 $260.7 122.8 $2,578.7 -2.9 147 139 Enel, Brazil Energy $3,023.3 15.7 $220.6 46.7 $5,022.9 26.4 148 150 Sodimac, Chile Retail $2,998.3 7.5 $114.1 -9.4 $1,201.1 9.1 149 130 Avon, USA Manuf. $2,975.8 -7.3 $314.9 -9.0 $1,650.7 10.4 150 178 Minerva, Brazil Food $2,960.5 21.4 $59.8 129.2 $2,749.0 29.1
3 On October 2015 the company acquired control of IDBD. Financial information is not comparable to previous periods. 4 For the fiscal year ending on March 31, 2017.
LATIN TRADE SECOND QUARTER 2017 LATIN AMERICA’S LARGEST COMPANIES
RANK REVENUES PROFITS TOTAL ASSETS COMPANY, COUNTRY SECTOR 2016 % CH. 2016 % CH. 2016 % CH. 2017 /16 US MILL. 2016/15 US MILL. 2016/15 US MILL. 2016/15 151 156 Grupo Light, Brazil Energy $2,959.5 8.5 -$96.0 -1,091.0 $4,397.0 15.2 152 165 Fibria, Brazil Pulp $2,950.1 14.3 $507.8 479.4 $10,567.4 40.2 153 209 Renault, Brazil Vehic./parts $2,936.7 43.1 -$134.3 36.6 $2,046.6 14.9 154 136 Arcos Dorados, Argentina Food $2,928.6 -4.1 $78.8 -252.6 $1,505.1 7.3 155 186 Magazine Luiza, Brazil Retail $2,917.6 26.9 $26.6 258.1 $1,871.9 32.9 156 189 Pan American, Argentina Energy $2,910.0 27.7 $363.4 143.3 $9,512.5 -0.1 157 170 G. Nutresa, Colombia Food $2,891.5 14.6 $131.9 -3.0 $4,565.4 9.1 158 112 Carrefour, Argentina Retail $2,882.7 -26.7 ------159 174 Weg, Brazil Manuf. $2,874.1 15.0 $342.9 15.8 $4,145.1 13.5 160 164 Energias do Brasil Energy $2,873.4 11.0 $204.5 -36.9 $5,904.6 25.2 161 172 Cementos Argos, Colombia Cement $2,838.5 13.0 $140.0 -10.3 $6,384.1 15.2 162 181 Whirlpool, Brazil Manuf. $2,828.6 17.7 $95.7 30.3 $2,015.6 20.1 163 169 Entel, Chile Telecom $2,798.9 10.9 $51.2 3,385.7 $5,215.8 13.1 164 144 Telefónica del Perú Telecom $2,797.8 -2.5 $272.1 285.8 $4,145.0 9.7 165 143 Ref. La Pampilla, Peru Energy $2,707.0 -6.3 $58.7 189.6 $1,685.2 22.2 166 155 Claro, Colombia Telecom $2,682.6 -2.6 $281.1 12.6 $3,833.5 4.8 167 266 Eletronorte, Brazil Energy $2,671.5 80.6 $978.4 3,657.8 $8,309.0 34.9 168 159 Emb. Andina, Chile Beverage $2,663.7 0.4 $135.7 9.2 $3,295.6 5.5 169 175 Light Dist., Brazil Energy $2,656.5 6.4 -$56.7 -465.5 $3,633.5 18.3 170 184 B2W Varejo, Brazil Retail $2,639.2 14.3 -$149.1 -39.1 $3,142.4 23.3 171 153 Nestlé, Mexico Food $2,634.5 -7.7 ------172 157 Grupo Aeroméxico, Mexico Airlines $2,615.2 -3.9 $54.0 -19.6 $3,468.3 19.9 173 163 Usiminas, Brazil Steel $2,594.0 -0.6 -$205.6 75.2 $8,055.8 13.3 174 149 Grupo Lala, Mexico Food $2,593.1 -7.2 $200.2 -11.6 $1,980.3 -0.9 175 -- Spal, Brazil Beverage $2,560.5 20.9 $69.9 415.9 $4,919.6 76.9 176 -- Nidera Sementes, Brazil Agri. $2,550.2 18.6 -$114.3 -1,636.8 $1,397.9 12.8 177 158 Ind. Bachoco , Mexico Food $2,522.9 -5.9 $191.4 -13.4 $2,186.8 -6.7 178 191 BASF, Brazil Chemical $2,521.5 13.8 -$147.7 -48.6 $3,209.2 19.5 179 202 Agrosuper, Chile Agri. $2,502.2 17.7 $257.8 58.7 $2,343.0 8.7 180 141 CGE, Chile Energy $2,499.1 10.1 $265.4 307.7 $5,013.2 -- 181 148 CNH, Netherlands 2 Vehic./parts $2,492.0 -11.5 ------182 162 Aut. Canal de Panamá 5 Services $2,483.4 -4.4 $1,163.4 -14.5 $12,884.5 3.9 183 176 Grupo Ice, Costa Rica Energy $2,481.0 0.6 $34.9 860.4 $10,613.9 3.8 7
184 196 Enel Generación, Chile Energy $2,457.6 12.9 $708.2 27.5 $5,094.8 -50.5 45 185 228 Drogarias DPSP, Brazil Retail $2,435.0 36.3 $31.9 53.5 $962.3 30.6 186 217 Molinos Río de la Plata, Arg. Food $2,429.5 26.0 $54.4 -34.0 $721.8 -4.3 187 210 Natura, Brazil Manuf. $2,427.9 20.0 $91.0 -30.8 $2,584.0 7.4 188 242 Rede D'Or São Luiz, Brazil Health $2,427.8 46.9 $250.4 30.3 $3,773.4 44.9 189 177 Bayer, Brazil Chemical $2,424.7 -2.1 -$45.2 -127.8 $3,698.1 19.5 190 225 Equatorial, Brazil Energy $2,401.2 31.4 $218.5 5.6 $4,363.0 35.4 191 201 Transpetro, Brazil Energy $2,397.5 12.7 $96.3 -63.6 $3,552.9 21.3 192 194 Ripley, Chile Retail $2,396.1 9.9 $171.6 366.2 $4,020.6 23.8 193 -- CTEEP, Brazil 8 Energy $2,390.0 625.1 $1,513.4 1,071.5 $4,623.1 146.0 194 183 Cencosud, Brazil Retail $2,382.4 0.2 -- -- $2,145.9 30.2 195 208 Rede Energia, Brazil Energy $2,374.8 15.4 $49.0 -53.2 $4,273.2 29.0 196 182 AHMSA, Mexico Steel $2,352.8 -1.3 -$152.9 38.8 $3,085.2 -14.4 197 207 Arcor, Argentina Food $2,338.4 12.8 $67.2 11.5 $1,536.7 7.0 198 203 CCU, Chile Beverage $2,336.2 10.3 $177.5 3.9 $2,804.7 8.8 199 192 Paul F Luz, Brazil Energy $2,318.2 5.1 $78.3 2.6 $2,834.4 -0.9 200 166 Grupo Sanborns, Mexico Retail $2,308.2 -10.4 $216.6 20.9 $2,191.4 -8.6
2 Revenues don’t include Mexico. 5 For the fiscal year ending on September 30, 2016. 7 Former Empresa Nacional de Electricidad. 8 Data includes the accounting recognition of the value of the RBSE (Basic Network of the Existing System). SECOND QUARTER 2017 LATIN TRADE THE LATIN TRADE 500 LATIN AMERICA’S LARGEST COMPANIES
RANK REVENUES PROFITS TOTAL ASSETS COMPANY, COUNTRY SECTOR 2016 % CH. 2016 % CH. 2016 % CH. 2017 /16 US MILL. 2016/15 US MILL. 2016/15 US MILL. 2016/15 201 198 AES Gener, Chile Energy $2,286.4 5.6 - -- $7,848.9 7.7 202 213 Collahuasi SCM, Chile Mining $2,286.0 14.8 $501.3 137.3 $5,674.9 -2.0 203 171 Syngenta, Brazil Agri. $2,227.0 -11.6 ------204 190 Copa, Panama Airlines $2,221.8 -1.3 $334.5 248.7 $3,846.1 3.5 205 180 Sidgo Koppers, Chile Holding $2,191.3 -9.2 $85.0 -37.0 $3,549.5 2.1 206 233 Coelba, Brazil Energy $2,176.9 24.7 $93.3 -5.7 $3,236.4 30.9 207 269 Klabin, Brazil Pulp $2,175.7 49.4 $761.5 337.3 $8,994.4 33.7 208 352 Reficar, Colombia Mining $2,172.1 110.1 -$815.6 18.6 $8,396.2 -0.8 209 212 InRetail Perú Retail $2,171.1 8.8 $80.0 89.4 $2,476.3 8.0 210 222 Banmédica, Chile Health $2,128.3 13.3 $86.6 33.8 $1,741.1 19.0 211 185 Recope, Costa Rica Energy $2,118.8 -8.2 -$15.6 -39.6 $1,585.4 -2.3 212 200 Org. Cultiba, Mexico Beverage $2,102.2 -47.4 $13.5 217.7 $1,557.0 -4.7 213 249 Biosev, Brazil Agri. $2,092.5 30.6 -$74.2 47.2 $2,851.5 8.6 214 232 Iochpe-Maxion, Brazil Manuf. $2,091.5 19.3 $6.6 -47.7 $2,165.4 5.8 215 220 Cemig Gen., Brazil Energy $2,089.2 10.6 $21.4 -96.4 $5,057.9 28.7 216 282 C.Vale, Brazil Agri. $2,075.0 49.1 $23.0 -34.9 $1,548.5 30.9 217 256 Julio Simões, Brazil Transport $2,067.9 34.8 -$56.2 -569.3 $2,721.1 21.5 218 -- Azul, Brazil Airlines $2,046.5 27.7 -$38.8 85.9 $2,577.5 28.4 219 258 Bavaria, Colombia Beverage $2,023.2 25.8 $440.1 -30.1 $2,470.0 -1.0 220 251 Lojas Renner, Brazil Retail $1,979.6 25.8 $191.8 29.4 $1,986.8 32.3 221 168 Ericsson, Sweden Electronics $1,979.4 -22.1 ------222 216 Alicorp, Peru Food $1,978.7 2.5 $90.3 100.4 $1,831.1 0.4 223 240 Engie, Brazil Energy $1,976.7 18.5 $474.8 23.6 $4,424.4 12.9 224 154 Movistar, Argentina Telecom $1,967.8 -28.8 ------225 206 Corp. Fragua, Mexico Retail $1,967.7 -5.2 $53.4 -5.3 $893.2 -5.6 226 230 Enel Distribución, Chile 9 Energy $1,963.4 11.3 $212.1 -20.5 $1,610.0 -25.6 227 221 ExxonMobil, Colombia Energy $1,960.7 3.2 $5.4 1,186.3 $368.0 5.3 228 260 TAG, Brazil Services $1,951.5 23.0 $2,191.4 523.0 $6,087.6 -29.2 229 -- Cenit, Colombia Services $1,946.0 57.1 $929.6 -5.8 $4,354.7 -0.2 230 234 SQM, Chile Chemical $1,939.3 12.2 $278.3 30.6 $4,218.6 -9.2 231 543 Pampa Energía, Argentina 10 Energy $1,935.4 259.3 -$0.7 -100.3 $4,779.0 118.0 232 272 Fresnillo PLC, Mexico Mining $1,905.5 31.9 $425.0 512.3 $4,289.8 11.2 233 195 Xignux, Mexico Holding $1,903.6 -12.6 $12.2 -39.7 $1,792.5 -3.4
46 234 235 Daimler, Mexico Vehic./parts $1,900.7 10.5 $44.1 -20.9 $2,647.2 9.0 235 219 Corp. Favorita, Ecuador Retail $1,887.1 -5.1 $135.0 -7.9 $1,440.1 7.2 236 -- ANCAP, Uuguay Energy $1,877.6 0.2 $14.8 107.5 $1,963.4 -8.5 237 231 Celesc, Brazil Energy $1,874.4 6.6 -$3.0 -109.0 $2,647.6 29.4 238 133 Halliburton, USA Services $1,860.0 -40.9 $111.0 -74.8 -- -- 239 226 Los Pelambres, Chile Mining $1,845.6 2.1 $244.7 -35.6 $3,590.8 -4.8 240 223 Alsea, Mexico Food $1,828.5 -2.3 $48.3 -15.1 $1,852.6 -2.7 241 214 Adidas, Germany Manuf. $1,824.5 -6.0 ------242 278 Guararapes, Brazil Textile $1,817.0 28.8 $97.4 8.6 $2,369.0 31.5 243 187 Graña y Montero, Peru Constr. $1,807.6 -21.4 $2.6 -90.2 $2,845.0 7.6 244 277 Redecard, Brazil Services $1,800.6 27.5 $1,013.7 27.0 $19,242.0 33.6 245 281 Lojas Riachuelo, Brazil Retail $1,796.7 28.9 -$29.4 -605.8 $2,050.8 31.8 246 211 Southern Peru Mining $1,795.5 -9.7 $272.3 -17.8 $5,049.5 8.1 247 264 Olímpica, Colombia Retail $1,772.8 18.8 $29.9 20.3 $1,130.7 27.0 248 -- Vale Fertilizantes, Brazil Chemical $1,756.3 4.5 -$828.0 -695.9 $4,835.3 0.9 249 255 Alunorte, Brazil Steel $1,748.8 13.9 $244.7 340.3 $2,432.9 22.4 250 238 Comgás, Brazil Energy $1,735.8 2.7 $276.5 54.5 $2,659.9 17.1
9 Former Chilectra. 10 The company acquired 67.2% of the shares of Petrobras Argentina.
LATIN TRADE SECOND QUARTER 2017 LATIN AMERICA’S LARGEST COMPANIES
RANK REVENUES PROFITS TOTAL ASSETS COMPANY, COUNTRY SECTOR 2016 % CH. 2016 % CH. 2016 % CH. 2017 /16 US MILL. 2016/15 US MILL. 2016/15 US MILL. 2016/15 251 224 Kimberly Clark, Mexico Paper $1,729.5 -7.4 $232.5 -7.5 $1,973.8 0.0 252 229 Siderar, Argentina Steel $1,729.4 -2.4 $229.0 73.3 $2,372.7 3.1 253 300 Nueva EPS, Colombia Health $1,722.3 32.9 -$21.3 22.0 $586.9 28.1 254 446 UNE EMP Telecom., Colombia Telecom $1,714.9 1.4 -$63.5 35.4 $2,471.7 0.6 255 271 Gerdau Açominas, Brazil Steel $1,713.0 18.4 $99.6 314.4 $3,271.2 18.3 256 193 Electrolux, Sweden Manuf. $1,701.9 -22.8 -$7.5 -113.6 $1,394.5 0.3 257 312 Pague Menos, Brazil Retail $1,700.6 43.4 $12.8 61.6 $851.3 10.0 258 205 Anglo American Sur, Chile Mining $1,675.7 -19.5 -$324.3 -196.9 $5,310.0 2.7 259 291 Alkosto, Colombia Retail $1,654.1 23.5 $51.9 24.5 $966.6 8.7 260 152 Tiendas CM, Mexico Retail $1,647.7 -15.5 $38.2 -14.4 $507.3 -9.1 261 295 Drummond, Colombia Mining $1,644.2 24.4 $84.3 153.6 $3,094.3 -4.6 262 267 CAP, Chile Steel $1,635.6 10.9 $60.3 2,705.5 $5,630.3 -1.4 263 318 M. Dias Branco, Brazil Food $1,634.8 38.1 $240.7 55.6 $1,743.1 33.5 264 265 Colombia Telecom, Col. Telecom $1,623.5 9.2 -$113.7 -692.5 $3,303.2 1.2 265 287 UTE, Uruguay Energy $1,623.1 20.0 $415.5 108.9 $7,993.3 14.5 266 288 Kroton, Brazil Education $1,609.3 19.3 $572.1 60.0 $5,400.6 26.7 267 286 Electricaribe, Colombia Energy $1,604.2 17.9 -$64.3 -525.8 $1,862.1 3.8 268 246 F. Heringer, Brazil Chemical $1,594.0 -1.3 $13.3 115.4 $876.2 2.6 269 311 Const. Queiroz Galvão, Br Constr. $1,587.5 4.7 -$22.4 -231.0 $1,378.5 -19.4 270 261 Elektro Holding, Brazil Energy $1,583.8 3.6 $73.8 -5.5 $2,976.0 16.6 271 253 Claro, Peru Telecom $1,565.4 0.7 $66.3 -70.5 -- -- 272 299 Dufry AG, Switzerland Retail $1,553.8 6.2 -- -- $1,996.4 -2.3 273 -- Cosan Log, Brazil Transport $1,538.6 48.8 -$63.4 -724.7 $7,068.8 26.9 274 310 Grupo Algar, Brazil Holding $1,537.4 24.4 $46.6 -9.0 $1,811.6 24.4 275 280 Minera Valparaíso, Chile Mining $1,535.8 9.6 $125.3 -2.0 $10,542.4 -0.8 276 338 Nokia, Finland Electronics $1,535.7 44.9 ------277 -- Camil Alimentos, Brazil Food $1,518.1 40.2 $61.8 118.0 $1,175.4 22.7 278 290 Vigor Alimentos, Brazil Food $1,512.1 13.1 $3.9 -93.8 $1,409.1 20.9 279 262 El Palacio de Hierro, Mx Retail $1,511.2 0.2 $43.5 -2.2 $1,660.1 -10.8 280 254 Grupo Gigante, Mexico Retail $1,496.6 -3.0 $135.3 56.0 $1,960.9 -17.5 281 237 Industrias CH, Mexico Steel $1,491.0 -10.2 $212.8 228.1 $2,375.8 4.1 282 382 SPDM, Brazil Health $1,489.3 34.4 -$8.8 -176.2 $3,012.2 78.7 283 215 Movistar, Mexico Telecom $1,486.1 -23.5 ------
284 303 FCA Automobiles, Argentina Vehic./parts $1,485.1 16.1 ------47 285 296 CGE Dist., Chile Energy $1,481.6 12.5 $52.8 41.7 $1,570.7 13.6 286 279 Cencosud, Peru Retail $1,479.1 5.1 -- -- $1,859.7 3.0 287 275 Elektro Redes, Brazil Energy $1,459.0 2.1 $107.9 13.5 $2,048.5 16.0 288 -- Andrade Gutierrez, Brazil Holding $1,454.1 -12.9 -$104.0 54.9 $3,834.4 -8.2 289 236 Movistar, Peru Telecom $1,447.1 -15.1 ------290 259 Ferreyros, Peru Retail $1,446.9 -5.4 $68.7 45.3 $1,435.2 3.4 291 319 Celpe, Brazil Energy $1,440.5 21.8 $0.0 -99.9 $1,699.1 34.2 292 298 Colbún, Chile Energy $1,436.2 9.3 $201.4 -1.6 $6,822.6 -4.6 293 248 Claro, Ecuador Telecom $1,430.7 -5.9 $181.9 29.0 $1,570.5 -0.4 294 361 PB-Log, Brazil Transport $1,425.4 42.5 $375.6 89.7 $1,581.7 28.2 295 147 Pacific Rubiales, Colombia Energy $1,411.7 -50.0 $2,463.8 144.9 $2,741.7 -31.2 296 247 Akzo Nobel, Netherlands Chemical $1,410.3 -12.7 ------297 252 Condumex, Mexico Manuf. $1,408.8 -9.8 $157.6 22.1 -- -- 298 284 Paranapanema, Brazil Mining $1,407.3 2.2 -$114.5 -431.7 $1,087.5 -20.0 299 289 Movistar, Chile Telecom $1,402.1 4.5 $127.2 -27.6 $2,017.5 2.3 300 305 CBMM, Brazil Mining $1,401.4 11.0 $528.9 39.0 $1,993.8 11.5 301 274 Praxair, USA Chemical $1,399.0 -2.2 $257.0 -11.7 -- --
SECOND QUARTER 2017 LATIN TRADE THE LATIN TRADE 500 LATIN AMERICA’S LARGEST COMPANIES
RANK REVENUES PROFITS TOTAL ASSETS COMPANY, COUNTRY SECTOR 2016 % CH. 2016 % CH. 2016 % CH. 2017 /16 US MILL. 2016/15 US MILL. 2016/15 US MILL. 2016/15 302 320 Codensa, Colombia Energy $1,396.2 18.5 $177.0 7.2 $1,911.0 27.9 303 336 Celpa, Brazil Energy $1,384.8 29.1 $107.9 -19.0 $2,390.8 36.2 304 276 Electrolux , Brazil Manuf. $1,383.5 7.2 -$32.3 -43.9 $867.2 6.1 305 297 UCP Backus, Peru Beverage $1,383.3 5.1 $222.9 -35.6 $1,211.9 1.3 306 257 InterCement, Brazil Cement $1,377.2 -10.0 -$76.2 -223.9 $2,575.6 11.8 307 292 Gloria, Peru Food $1,374.3 3.6 $41.1 -26.5 $1,187.9 -3.9 308 293 Ampla En., Brazil Energy $1,370.6 3.4 -$68.1 -654.3 $2,486.6 24.2 309 360 Localiza, Brazil Services $1,362.1 35.4 $125.6 21.9 $2,275.9 45.1 310 304 Minera Centinela, Chile Mining $1,338.9 5.7 $109.2 159.7 $5,378.9 -0.3 311 270 Grupo Simec, Mexico Steel $1,334.5 -6.0 $139.9 298.7 $2,019.4 8.0 312 323 CBA, Brazil Steel $1,333.3 14.1 -$66.5 43.9 $3,396.9 36.9 313 314 Cencosud, Colombia Retail $1,332.8 9.5 $16.8 403.1 $2,081.4 4.4 314 351 Rumo, Brazil 11 Transport $1,323.0 24.5 -$326.2 -8.3 $7,066.8 82.5 315 347 Cedae, Brazil Water $1,313.7 26.4 $116.4 82.6 $4,162.5 22.1 316 301 Pepsico, Brazil Beverage $1,305.0 1.2 -- -- $796.0 22.7 317 313 MRV, Brazil Constr. $1,303.8 6.9 $170.9 21.9 $3,782.3 29.6 318 245 Imp y Exp de la Patagonia, Arg. Retail $1,300.1 -20.5 $23.0 -42.6 $503.2 7.0 319 -- Promigás, Colombia Energy $1,299.0 54.7 $205.5 31.2 $3,087.7 38.7 320 -- PSA Peugeot Citroën, Brazil Vehic./parts $1,294.2 36.4 -$63.3 223.9 $1,050.4 18.4 321 283 Ferromex, Mexico Transport $1,285.9 -7.4 $281.1 24.6 $1,652.5 -5.6 322 324 CELG Dist., Brazil Energy $1,270.6 9.1 $21.9 108.4 $1,311.9 13.6 323 317 Superm. Peruanos, Peru Retail $1,266.0 5.8 $21.1 165.0 $870.2 10.9 324 321 Celsia, Colombia Energy $1,264.7 7.9 $57.0 447.8 $3,247.2 -0.8 325 375 C.I. Prodeco, Colombia Mining $1,260.4 17.4 $57.2 620.4 $1,234.3 -6.4 326 340 Coelce, Brazil Energy $1,257.2 18.9 $120.6 29.7 $1,510.8 28.0 327 390 Profarma, Brazil Retail $1,253.3 41.2 -$15.0 -177.0 $832.2 42.4 328 341 Alpargatas, Brazil Textile $1,244.0 17.7 $110.9 59.1 $1,160.5 20.4 329 368 Arteris, Brazil Transport $1,243.4 26.8 $79.6 108.2 $3,493.9 35.3 330 273 Invepar, Brazil Transport $1,239.4 -14.1 $125.5 151.3 $7,849.4 4.8 331 367 Copasa, Brazil Water $1,237.4 26.0 $133.2 4,587.4 $3,359.1 20.0 332 302 Ocensa, Colombia Energy $1,237.3 -3.4 $563.5 -15.1 $1,891.0 -9.1 333 345 Carb. del Cerrejón, Colombia Mining $1,236.4 17.8 $158.2 1,364.5 $2,047.9 3.0 334 386 Ultragaz, Brazil Energy $1,233.1 37.8 $21.7 95.6 $543.4 24.2
48 335 362 Grupo Martins, Brazil Retail $1,231.2 23.5 $14.6 243.2 $458.2 24.7 336 306 Sonda, Chile Tech $1,223.1 -2.9 $39.6 -34.7 $1,323.5 18.4 337 308 Avon, Brazil Manuf. $1,220.4 -2.6 ------338 -- Chevron, Colombia Energy $1,207.7 1.2 $77.0 5.4 $418.0 -4.1 339 359 Duratex, Brazil Manuf. $1,199.6 18.2 $7.3 -84.6 $2,866.1 24.2 340 307 Sotreq, Brazil Vehic./parts $1,197.7 -4.6 -$6.4 -129.3 $756.1 -6.3 341 263 Telefónica de Argentina Telecom $1,194.2 -20.3 ------342 353 Solar.BR, Brazil Manuf. $1,191.5 15.5 $142.5 31.5 $1,437.9 20.3 343 294 Sears, Mexico Retail $1,191.2 -9.9 $88.8 -7.4 $1,183.1 -2.6 344 -- Grupo Becle, Mexico Beverage $1,183.2 10.5 $152.7 -50.4 $2,215.8 -1.1 345 348 Emgesa, Colombia Energy $1,171.1 12.9 $251.1 -10.7 $3,011.8 7.3 346 356 Cooxupé, Brazil Food $1,163.4 13.5 $53.8 55.6 $1,235.4 38.4 347 402 Caramuru Alimentos, Brazil Food $1,160.6 35.9 $21.3 243.9 $821.0 -12.9 348 -- Mateus Supermercados, Br. Retail $1,157.5 45.0 $0.3 -32.4 $385.5 58.8 349 349 Sodimac, Colombia Retail $1,152.2 11.2 $52.2 12.9 $763.5 12.5 350 327 Casas Pernambucanas, Brazil Retail $1,150.6 0.8 $18.0 2,356.0 $1,601.7 27.9 351 354 Coomeva EPS, Colombia Health $1,148.5 11.5 ------
11 Former ALL – América Latina Logística.
LATIN TRADE SECOND QUARTER 2017 LATIN AMERICA’S LARGEST COMPANIES
RANK REVENUES PROFITS TOTAL ASSETS COMPANY, COUNTRY SECTOR 2016 % CH. 2016 % CH. 2016 % CH. 2017 /16 US MILL. 2016/15 US MILL. 2016/15 US MILL. 2016/15 352 342 Volaris, Mexico Airlines $1,140.3 8.2 $170.7 19.5 $1,056.4 19.6 353 377 Grupo Brasil Kirin, Brazil Beverage $1,137.2 26.4 $83.3 132.6 $1,792.8 26.3 354 346 Oxiteno, Brazil Chemical $1,135.5 8.6 $94.5 -36.4 $1,626.1 53.0 355 370 DuPont Brasil, Brazil Chemical $1,135.0 16.3 $148.0 221.6 $1,947.8 28.9 356 403 Cálamo, Brazil Manuf. $1,134.4 33.7 $127.8 2.6 $1,097.9 40.7 357 -- CCHC, Chile Constr. $1,115.7 -4.1 $441.7 331.0 $12,233.9 11.9 358 357 CTC , Chile Telecom $1,115.7 9.8 $29.3 -15.6 $2,397.0 7.3 359 369 Empresas Carozzi, Chile Food $1,112.1 13.9 $65.3 -23.5 $1,419.6 14.5 360 379 Bupa, Chile Health $1,111.1 19.6 $7.3 395.6 $864.0 14.7 361 471 Comigo, Brazil Agri. $1,106.2 65.2 $31.0 28.3 $745.2 22.6 362 406 Liquigás Dist., Brazil Energy $1,101.3 30.5 $61.5 110.1 $405.3 18.2 363 339 Mastellone Hnos., Arg Food $1,096.0 3.5 -$5.9 87.3 $607.8 5.3 364 333 Praxair, Brazil Chemical $1,091.0 -1.4 -- -- $1,262.0 28.0 365 387 VLI, Brazil Transport $1,090.4 22.0 $90.2 -18.2 $4,656.7 34.1 366 -- Tereos Açúcar e Energia, Br. 4 Food $1,081.6 47.2 $22.1 198.0 $2,276.7 26.1 367 391 Águia Branca, Brazil Transport $1,070.4 21.0 $37.6 196.6 $984.9 19.9 368 373 Buenaventura, Peru Mining $1,069.4 12.4 -$323.7 -2.0 $4,269.0 -6.1 369 430 Sanepar, Brazil Water $1,067.0 40.2 $192.3 71.3 $2,900.8 37.4 370 413 Cocamar, Brazil Agri. $1,065.2 30.1 $36.9 17.8 $837.1 47.8 371 381 Telmex Colombia, Col Telecom $1,062.1 14.8 $74.5 52.9 $1,403.6 13.9 372 364 Bio Pappel, Mexico Paper $1,060.3 7.7 -$17.1 -350.5 $1,333.2 -16.4 373 329 Grupo KUO, Mexico Manuf. $1,048.4 -7.8 $52.4 58.2 $1,437.9 -0.2 374 335 Unacem, Peru Cement $1,047.1 -2.6 $36.0 81.3 $3,163.6 -0.4 375 392 Salfacorp, Chile Constr. $1,044.3 18.1 $37.7 16.9 $1,419.8 5.8 376 334 EEB, Colombia Energy $1,044.0 -3.8 $429.6 191.5 $7,828.1 3.4 377 316 ENAMI, Chile Mining $1,043.6 -13.7 -$42.3 20.3 $807.8 15.1 378 396 Magnesita, Brazil Mining $1,041.1 20.2 $137.9 150.8 $1,885.7 13.1 379 -- Aperam Inox, Brazil Steel $1,031.1 14.1 -$0.6 -101.9 $1,359.9 16.3 380 388 Energisa MG, Brazil Energy $1,022.1 14.6 $36.9 218.3 $1,635.2 36.8 381 405 Lojas Cem, Brazil Retail $1,011.5 19.8 $76.1 -2.7 $944.0 42.5 382 -- Votener, Brazil Energy $1,010.5 15.5 -$3.5 -110.3 $576.5 32.7 383 433 Hypermarcas, Brazil Pharm. $1,009.1 33.3 $360.4 151.4 $3,524.1 -13.0 384 415 MRS Logística, Brazil Transport $1,006.2 23.8 $128.1 69.1 $2,323.6 14.5
385 322 Minera Spence, Chile Mining $1,002.8 -14.3 $125.6 -33.3 $4,894.3 2.5 49 386 394 Tupy, Brazil Manuf. $998.8 13.8 -$55.7 -198.8 $1,463.5 -0.6 387 422 Bianchini, Brazil Food $997.9 26.3 $22.4 71.9 $398.8 57.2 388 218 ICA, Mexico Constr. $989.4 -39.1 -$430.2 63.7 $5,419.4 -13.7 389 385 Concha y Toro, Chile Beverage $986.8 9.7 $71.8 2.0 $1,522.3 9.1 390 315 NII Holdings, USA Telecom $985.0 -18.8 -$1,553.9 -206.5 $1,418.5 -48.0 391 332 Cyrela Realty, Brazil Constr. $980.4 -11.8 $46.4 -59.5 $3,645.1 11.8 392 227 Baker Hughes, USA Services $980.0 -45.5 -$276.0 -291.7 $1,530.0 -34.1 393 -- Corp. El Rosado, Ecuador Retail $977.3 -6.4 $2.4 -89.7 $593.8 -4.26 394 439 Estacio, Brazil Education $977.1 29.8 $113.0 -9.0 $1,270.6 13.8 395 427 Sofasa, Colombia Vehic./parts $969.6 25.8 $56.0 115.4 $263.0 22.2 396 326 Engie Energia, Chile Energy $967.4 -15.3 $254.8 170.6 $3,313.1 1.5 397 366 Bandeirante Energia, Brazil Energy $963.5 -2.0 $43.4 -35.3 $962.7 12.8 398 412 Vitro, Mexico Manuf. $962.2 17.5 $175.5 -87.2 $2,203.3 37.0 399 378 CPFL Piratininga, Brazil Energy $961.2 2.1 $20.9 -61.4 $1,121.8 3.4 400 344 Masisa, Chile Manuf. $959.8 -8.8 $19.9 -62.0 $1,799.3 -5.8 401 372 CEG, Brazil Energy $957.4 0.3 $89.2 22.5 $861.5 26.5
4 For the fiscal year ending on March 31, 2017.
SECOND QUARTER 2017 LATIN TRADE THE LATIN TRADE 500 LATIN AMERICA’S LARGEST COMPANIES
RANK REVENUES PROFITS TOTAL ASSETS COMPANY, COUNTRY SECTOR 2016 % CH. 2016 % CH. 2016 % CH. 2017 /16 US MILL. 2016/15 US MILL. 2016/15 US MILL. 2016/15 402 425 Prosegur Brasil, Brazil Services $952.5 21.7 $6.6 170.3 $715.4 12.8 403 483 Três Corações Alimentos, Br. Food $952.1 46.4 $57.9 31.5 $453.9 41.4 404 454 Mirgor, Argentina Manuf. $951.1 34.1 $26.4 -32.7 $451.4 -27.8 405 444 Drogarias Pacheco, Brazil Retail $950.0 28.1 $15.3 260.3 $342.6 22.1 406 441 Embrapa, Brazil Services $940.9 26.2 -$149.7 -28.0 -- -- 407 458 Cemar, Brazil Energy $940.3 34.1 $122.7 31.7 $1,726.9 31.7 408 398 Luz del Sur, Peru Energy $937.1 8.5 $119.3 -6.2 $1,559.5 22.8 409 437 Roche, Brazil Pharm. $935.1 23.8 $129.4 45.2 $652.7 30.9 410 448 Copacol, Brazil Food $934.1 30.0 $22.0 -29.6 $958.1 40.0 411 451 Dasa, Brazil Health $933.0 30.4 $29.1 376.7 $1,572.4 31.2 412 383 Elecmetal, Chile Steel $928.5 2.6 $46.5 1.1 $1,368.1 9.6 413 384 Isagen, Colombia Energy $928.0 1.8 $46.9 -50.3 $2,765.7 -2.3 414 365 Elementia, Mexico Cement. $925.8 -5.9 $33.6 35,184.6 $2,607.3 42.7 415 456 Novartis, Brazil Pharm. $923.4 31.5 $76.3 173.5 $738.1 9.9 416 -- Pronaca, Ecuador Food $922.9 -7.3 $29.3 -28.2 $659.2 -3.1 417 393 OHL Mexico Services $916.6 8.9 $347.7 -12.9 $6,373.3 -9.1 418 447 Sonda Supermercados, Br. Retail $913.4 26.7 $37.9 38.4 $249.7 27.8 419 410 Eldorado Brasil Celulose, Br Pulp $908.9 10.7 $88.5 46.0 $3,312.3 19.1 420 363 Granol, Brazil Food $907.8 -8.1 -$89.5 -463.9 $743.2 4.4 421 328 MAN Latin America, Brazil Vehic./parts $907.5 -20.4 -$200.3 -53.2 -- -- 422 355 Movistar, Colombia Telecom $907.5 -11.5 ------423 400 RGE, Brazil Energy $904.3 5.1 $30.2 -18.1 $1,308.6 3.2 424 374 Minera Candelaria, Chile Mining $901.8 -5.1 $130.5 -5.9 $2,252.3 6.5 425 404 General Motors, Colombia Vehic./parts $900.3 4.1 $15.7 -22.7 $441.1 14.8 426 401 Saga Falabella, Peru Retail $898.7 5.2 $51.5 1.4 $601.9 16.8 427 512 EMS, Brazil Pharm. $896.4 51.9 $94.8 122.9 $620.3 41.5 428 464 Gas Natural, Colombia Energy $893.1 29.7 $100.3 16.4 $508.6 3.1 429 376 Herdez, Mexico Food $881.7 -7.0 $34.8 54.4 $1,277.8 -9.7 430 -- EPS Sura, Colombia Health $877.7 30.1 $8.2 23.2 $204.5 26.0 431 409 AES Sul, Brazil Energy $875.5 4.7 -$124.0 -9,733.4 $1,164.6 11.9 432 416 Lojas Marisa, Brazil Retail $875.3 8.0 -$27.0 -194.8 $811.3 11.9 433 432 Samsung, Colombia Electronics $874.3 14.2 $4.1 -53.0 $349.4 8.2 434 466 Infraero, Brazil Transport $871.4 28.4 -$230.6 70.5 $1,211.9 53.6
50 435 -- Citrosuco Agroindústria, Br. Beverage $870.2 23.7 -$84.1 -238.4 $1,434.9 -6.8 436 428 Atento, Brazil Telecom $869.3 12.9 $10.8 -64.3 $557.0 10.6 437 443 Ecorodovias, Brazil Transport $868.0 16.8 -$296.0 -1,160.6 $2,026.1 0.7 438 380 Maseca, Mexico Food $866.5 -5.8 $95.1 -25.6 $749.0 5.0 439 418 Enel Distribución, Peru Energy $865.9 8.6 $92.2 1.6 $1,240.0 13.8 440 476 Santo Antonio Energia, Brazil Energy $859.9 28.9 -$148.5 -1,827.8 $7,460.3 20.5 441 475 Madeira Energia, Brazil Energy $859.9 28.9 -$189.4 -4,202.3 $7,694.5 20.3 442 478 Embasa, Brazil Water $858.7 29.2 $30.5 221.3 $2,290.8 20.5 443 491 Eurofarma, Brazil Pharm. $857.8 36.5 $107.7 107.2 $758.3 20.6 444 438 Escelsa, Brazil Energy $851.9 13.0 $65.5 101.7 $984.2 21.6 445 371 Grupo Famsa, Mexico Retail $850.8 -8.4 $16.7 95.8 $2,060.7 -7.3 446 -- Odebrecht TransPort, Brazil Transport $848.8 -29.4 -$333.0 7.0 $3,333.7 -49.2 447 397 CEEE, Brazil Energy $848.2 -1.9 -$161.8 -22.8 $1,061.8 25.0 448 455 Aluar, Argentina Steel $846.2 20.1 $109.8 98.2 $843.7 -6.9 449 -- Mercado Libre, Argentina Retail $844.4 29.6 $136.4 28.9 $1,367.4 36.3 450 408 Biomax, Colombia Energy $843.3 0.1 $23.1 5.3 $248.4 6.2 451 461 Sanofi-Aventis, Brazil Pharm. $839.9 20.3 $67.5 -9.0 $794.3 -17.4
LATIN TRADE SECOND QUARTER 2017 LATIN AMERICA’S LARGEST COMPANIES
RANK REVENUES PROFITS TOTAL ASSETS COMPANY, COUNTRY SECTOR 2016 % CH. 2016 % CH. 2016 % CH. 2017 /16 US MILL. 2016/15 US MILL. 2016/15 US MILL. 2016/15 452 481 Accenture do Brasil, Brazil Services $836.5 26.8 $4.0 126.8 $576.5 42.7 453 511 Cooperativa Integrada, Br. Agri. $834.8 41.1 $22.0 61.6 $571.0 31.5 454 309 Emerson, USA 5 Tech $834.0 -15.0 ------455 484 Itambé Alimentos, Brazil Food $833.8 28.4 $24.0 93.6 $421.3 22.3 456 528 Castrolanda, Brazil Agri. $827.1 48.2 $14.1 13.4 $710.0 40.3 457 407 Megacable, Mexico Telecom $824.6 -2.3 $187.4 3.5 $1,579.8 -6.1 458 510 Aché, Brazil Pharm. $824.2 38.0 $167.0 37.6 $751.1 19.2 459 489 CPFL Geracão, Brazil Energy $822.6 28.8 $123.1 99.8 $5,491.8 29.9 460 420 Volcán, Peru Mining $822.0 3.5 $84.5 118.6 $2,532.3 -0.8 461 479 Coteminas, Brazil Textile $815.8 23.6 -$43.2 -116.9 $1,024.5 20.2 462 450 Embonor, Chile Beverage $814.6 13.4 $60.7 53.0 $1,021.1 8.2 463 -- Atlas Alumínio, Brazil Steel $812.7 16.5 $33.8 -24.7 $818.0 12.4 464 -- Edenor, Argentina Energy $808.9 182.8 -$73.5 -185.6 $1,170.9 19.9 465 421 Randon, Brazil Manuf. $805.1 1.4 -$20.6 -226.9 $1,493.8 12.5 466 463 Albras, Brazil Steel $804.4 16.6 $18.9 -48.4 $810.7 12.7 467 473 Yura, Peru Cement $803.4 20.1 $115.4 30.6 $2,009.5 11.7 468 507 Agrária, Brazil Agri. $798.4 31.1 $39.6 38.6 -- -- 469 490 All Norte, Brazil Transport $795.5 25.4 $33.8 -21.9 $2,993.8 77.1 470 -- Corporación Lindley, Peru Beverage $793.2 10.4 $72.1 377.4 $954.9 -6.5 471 440 Corp. San Luis, Mexico Manuf. $792.5 6.0 $69.4 35.5 $723.6 5.1 472 533 Ecorodovias, Brazil Transport $791.5 43.5 $155.9 59.8 $1,873.1 39.2 473 457 Marcopolo, Brazil Manuf. $789.8 12.6 $67.3 202.3 $1,524.4 18.1 474 525 Metrô de São Paulo, Brazil Transport $785.5 39.2 -$65.4 -173.6 $9,594.4 28.1 475 495 Evora, Brazil Manuf. $784.0 25.4 $141.6 5,124.9 $1,122.0 8.7 476 575 Eletronuclear, Brazil Energy $781.6 60.4 -$1,250.6 4.6 $2,324.2 0.1 477 502 Algar Telecom, Brazil Telecom $780.9 26.1 $56.0 44.9 $1,043.1 28.1 478 358 Kellogg, USA Food $780.0 -23.2 $84.0 833.3 -- -- 479 535 Cooperalfa, Brazil Agri. $776.8 41.1 $33.1 14.6 $549.9 26.8 480 414 Colombia Móvil, Colombia Telecom $774.7 -4.9 $22.0 172.8 $858.1 -2.3 481 522 Hospital Albert Einstein, Br. Health $773.2 34.0 $79.4 38.1 $1,001.0 30.2 482 -- Dinatec, Ecuador Manuf. $767.0 -4.0 $7.4 -79.7 $141.4 12.4 483 436 Unigel, Brazil Chemical $761.1 1.7 $3.5 -86.3 $962.9 24.1 484 343 Ideal, Mexico Services $756.1 -28.2 $893.4 6,220.3 $5,352.9 -5.4
485 515 São Martinho, Brazil Agri. $752.7 28.2 $71.6 53.7 $2,365.4 29.7 51 486 -- Cigás, Brazil Energy $748.7 29.0 $14.6 76.8 $2,324.0 52.2 487 453 Engie Energía, Peru Energy $747.7 4.8 $131.5 -27.5 $2,238.5 8.9 488 474 Tigre, Brazil Manuf. $746.9 11.8 $22.8 195.0 $718.2 9.1 489 505 Casa da Moeda do Brasil, Br. Manuf. $737.5 19.7 $18.5 -76.8 $961.0 16.2 490 472 Aguas Andinas, Chile Water $737.3 10.2 $225.7 23.7 $2,655.3 11.1 491 498 Vitro Vidrio Plano, Mx Manuf. $737.1 18.3 $143.6 38.8 $3,094.8 -4.4 492 523 Gasco, Chile 12 Energy $734.7 29.4 $34.8 -54.6 $956.5 -60.6 493 542 Frimesa, Brazil Food $727.0 34.8 $67.9 148.7 $2,391.3 12.3 494 548 Corsan, Brazil Water $724.6 36.0 $63.8 52.0 $1,310.6 30.8 495 465 Cerrejón Zona Norte, Col. Mining $724.5 5.2 $52.9 114.7 $1,248.0 -7.7 496 519 CPTM, Brazil Transport $721.5 24.7 -$224.7 -38.8 $3,428.1 23.9 497 469 Ienova, Mexico Energy $717.9 17.1 $755.0 438.6 $7,127.0 103.2 498 -- La Comer, Mexico 13 Retail $715.7 -- $25.1 -- $1,136.7 -- 499 494 Milpo, Peru Mining $715.1 14.3 $141.9 211.7 $1,610.8 26.6 500 477 Vallourec Tubos, Brazil Steel $712.6 7.1 -$227.6 -565.1 $2,714.5 51.8
5 For the fiscal year ending on September 30, 2016. 12 The company was divided in two separate firms. This company engages in the liquefied petroleum gas business. 13 New company created in January 2016 after the sale of Controladora Comercial Mexicana. Sources: Economática, individual companies. © Copyright Latin Trade SECOND QUARTER 2017 LATIN TRADE THE LATIN TRADE 500 RANKINGS LATIN AMERICA’S LARGEST COMPANIES 2016 figures in millions of U.S. dollars.
REVENUE WINNERS REVENUE LOSERS
Rev. 500 Company, Country % Total Rev. 500 Company, Country % Total Ch. Rank Ch. Revenues Ch. Rank Ch. Revenues Rank Rank 1 100 Cresud, Argentina 709.9 $4,496.4 1 295 Pacific Rubiales, -50.0 $1,411.7 Colombia 2 193 CTEEP, Brazil (1) 625.1 $2,390.0 2 212 Org. Cultiba, Mexico -47.4 $2,102.2 3 114 CHESF, Brazil 278.3 $3,913.4 3 392 Baker Hughes, USA -45.5 $980.0 4 65 Furnas, Brazil 267.0 $6,028.6 4 238 Halliburton, USA -40.9 $1,860.0 5 231 Pampa Energía, 259.3 $1,935.4 Argentina (2) 5 103 Tenaris, Argentina -40.1 $4,293.6 6 464 Edenor, Argentina 182.8 $808.9 6 388 ICA, Mexico -39.1 $989.4 7 109 Grupo ISA, Colombia 141.7 $4,044.9 7 105 Schlumberger, USA -29.7 $4,230.0 8 13 Eletrobras, Brazil 123.3 $18,639.8 8 446 Odebrecht -29.4 $848.8 TransPort, Brazil 9 208 Reficar, Colombia 110.1 $2,172.1 9 224 Movistar, Argentina -28.8 $1,967.8 10 167 Eletronorte, Brazil 80.6 $2,671.5 10 29 CBD, Brazil -28.2 $12,719.5
1 Data includes the accounting recognition of the value of the RBSE (Basic Network of the Existing System). 2 The company acquired 67.2% of the shares of Petrobras Argentina.
PROFIT WINNERS PROFIT LOSERS
Profit 500 Company, Country % Ch. Total Profit 500 Company, % Ch. Total Ch. Rank Profits Ch. Rank Country Profits Rank Rank 1 414 Elementia, Mexico 35,184.6 $33.6 1 431 AES Sul, Brazil -9,733.4 -$124.0 2 65 Furnas, Brazil 16,209.9 $2,899.8 2 441 Madeira Energia, -4,202.3 -$189.4 Brazil 3 54 Ternium, Argentina 7,226.4 $595.6 3 440 Santo Antonio -1,827.8 -$148.5 4 484 Ideal, Mexico 6,220.3 $893.4 Energia, Brazil 5 475 Evora, Brazil 5,124.9 $141.6 4 176 Nidera Sementes, -1,636.8 -$114.3 6 331 Copasa, Brazil 4,587.4 $133.2 Brazil 7 167 Eletronorte, Brazil 3,657.8 $978.4 5 437 Ecorodovias, Brazil -1,160.6 -$296.0 8 163 Entel, Chile 3,385.7 $51.2 6 151 Grupo Light, Brazil -1,091.0 -$96.0 9 262 CAP, Chile 2,705.5 $60.3 7 63 Via Varejo, Brazil -913.0 -$29.2 10 350 Casas 2,356.0 $18.0 8 273 Cosan Log, Brazil -724.7 -$63.4 Pernambucanas, 52 9 248 Vale Fertilizantes, -695.9 -$828.0 Brazil Brazil 10 264 Colombia Telecom, -692.5 -$113.7 Colombia
TOP FIVE PROFIT KINGS
Profits TOP 500 Company, Country Profits % Ch. Rank Rank 1 17 AB InBev, Belgium * $6,229.0 -19.1 2 5 Vale, Brazil $4,084.4 136.1 3 25 AmBev, Brazil $3,849.7 21.0 4 15 CFE, Mexico $3,698.3 167.9 5 8 Telefónica, Spain * $3,123.0 -24.0
* Operating income, profit from operations. Source: LT 500, Economática.
LATIN TRADE SECOND QUARTER 2017 LATIN AMERICA’S LARGEST COMPANIES
The ranking today of the companies that held the top places in the LT 500 in 2012
THE TOP 10 OF 2012 AND TODAY
Rank Change Company, Country Sector Total Revenues % Change
2012 2017 2012 * 2016 1 1 same Petrobras, Brasil Energy $130,172 $86,708 -33.4 2 2 same Pemex, Mexico Energy $111,735 $52,356 -53.1 3 5 -2 Vale, Brazil Mining $55,014 $29,037 -47.2 4 4 same América Móvil, Mexico Telecom. $47,700 $47,306 -0.8 5 6 same BR Distribuidora, Brazil Energy $37,980 $26,583 -30.0 6 8 -2 Telefónica, Spain Telecom. $37,833 $24,955 -34.0 7 19 -12 Ecopetrol, Colombia Energy $33,195 $15,907 -52.1 8 3 +5 JBS, Brazil Food $32,944 $52,278 -58.7 9 7 +2 Walmart de México Retail $27,310 $25,820 -5.5 10 9 +1 Grupo Ultra, Brazil Holding $25,942 $23,734 -8.5 Total $513,882 $360,948 -29.8 **
* 2011 figures ** average In 2012, PDVSA and Odebrecht were in the 2nd and 8th places, respectively, but their financial statements for 2016 were not available at the close of this edition.
How the Latin American corporate landscape evolved in five years
NUMBER OF COMPANIES BY SECTOR NUMBER OF COMPANIES BY COUNTRY
# of Companies Ch Rk. Country # of Companies Ch
Rk. Sector 2012 2017 2012 2017 53 1 Food 42 31 +11 1 Brazil 220 233 +13 2 Energy 104 94 +10 2 Colombia 36 45 +9 3 Transportation 17 10 +7 3 Ecuador 1 6 +5 4 Agriculture 16 11 +5 4 Costa Rica 0 2 +2 5 Health 10 5 +5 5 Netherlands 1 2 +1
21 Media 2 7 -5 19 Argentina 28 24 -4 22 Textile 3 8 -5 20 USA 25 21 -4 23 Mining 30 39 -9 21 Venezuela 4 0 -4 24 Constr. 7 22 -15 22 Chile 58 51 -7 25 Tech & 33 50 -17 23 Mexico 78 70 -8 Telecom
Source: Latin Trade
SECOND QUARTER 2017 LATIN TRADE The 4% Factor: How to Bring Capital Construction Projects in On-Time, On-Budget
By Bill Brady • Top Quartile That Top Quartile project team also follows a control-system engineering and design strategy that saves 70-80 percent on By weight, a person’s central nervous system accounts for a hardware space requirements, and finds ways to reduce its fractional percentage of body weight. And yet, without it we investment in expensive piping by 30-50 percent in segments around couldn’t live, much less function effectively. the plant. Once under operation, that same Top Quartile facility spends a staggering $40 million less annually on maintenance than For industrial process manufacturing facilities, the same can be its third-quartile counterparts. said of automation. Typically accounting for roughly 4 percent of the project cost for new construction, automation is rarely Reducing complexity is another critical factor in Top Quartile project considered early enough in the project strategy. This might be why performance. For example, shared amongst dozens of suppliers 65 percent of all projects over $1 billion and 35% of all projects and contractors are hundreds of thousands of documents and under $500 million are significantly late or over budget, according millions of pieces of data. The information is not simply the blueprint to a study in Project Management Magazine. of the plant, but complex operating requirements and technical specifications which impact the work of many companies. Because each company maintains their own system of record for documents and data, the likelihood of version incompatibility or data entry errors can have staggering impact on project schedules. To prevent project information getting out of sync while providing for a nimble team of suppliers, Top Quartile project teams utilize a single source of truth on documents and data. Emerson’s Project Data Ring, by example, manages all project documentation in one place, While not all projects should be considered failures, the difference interfaced among all suppliers—regardless of their independent between Top Quartile project performance and other quartiles is document and data management sources. It also stores all technical staggering. According to the Project Management Institute, specifications in one database, providing each supplier with just the companies lose $109 million for every $1 billion spent on projects information they need to complete their respective scope of work. due to the decrease in recoverable budget when the project fails. Accommodating change, especially in late stages of a project, One of the greatest challenges, complexity, is an enormous addresses one of the most vexing problems project teams and their obstacle and comes in many forms: investors have: startup delays. A project that has been on paper for five years or more and in construction for 2-3 years is scheduled to The size and scale of today’s new oil and gas, petrochemical, go into full production on a specific date. Contracts with suppliers refining and other process manufacturing facilities are and customers of that site are developed based on that projected unprecedented. “go live.” When the date is missed—often by months—the Facilities are bigger, more technically complicated and often built consequences can be staggering. Lost revenue, delayed in remote locations with limited infrastructure. return-on-investment, customer goodwill are all sacrificed. But why? The workforce in these locations often doesn’t have experience operating technical facilities of this magnitude. The root cause is technical, yet simple at the same time. Early in a The sheer number of suppliers and contractors working on these project cycle, engineering and technology decisions are required in projects—often dozens—makes a difference. While each of order for suppliers to schedule their deliverables. However, the these suppliers and contractors has a defined work scope that is actual manufacturing process design isn’t yet finalized. Fast-forward uniquely theirs, there are inherent dependencies between two years to construction and routinely, those early automation suppliers which can create frustration at best and design decisions prove restrictive to late design modifications. As a schedule-busting delays at worst. consequence, costly and time-consuming change orders wreak havoc on the schedule. What if the project could simply absorb A third and endemic issue is the use of outdated methodologies in those late-state change orders without affecting the schedule? project execution, combined with missed opportunities to utilize new technologies to reduce and eliminate work. These One game-changing technology Emerson introduced recently, called inefficiencies and missed value-engineering opportunities add up “Electronic Marshalling with CHARMs,” does precisely that. This to significant wasted expense in terms of engineering hours and unprecedented system interface platform helps project teams materials, as well. Tens, if not hundreds, of millions of dollars eliminate miles of wiring and thousands of hours of engineering could be saved on every project. traditionally required for connecting tens of thousands of instruments and valves. It gives them the flexibility to accommodate late design So what is a C-suite to do … stop investing? Not viable for any changes nimbly and adjust the deployment of automation company wishing to remain competitive and drive growth. technologies with little-to-no impact. Most importantly, it helps ensure on-time startup, which leads to faster return on investment. “Top Quartile companies investing in new infrastructure need the certainty of projects delivered on-time, on-budget with lower cost Top Quartile project teams utilizing Electronic Marshalling with and lower risk,” said Jim Nyquist, president of Systems and CHARMs technology have saved months on their project schedule. Solutions at Emerson Process Management. This has also translated into cost savings measured in millions of dollars. Eliminating cost is simply about engineering better value from every dollar spent. It comes in several forms: Three requirements As capital markets have tightened in reaction to uncertain business for successful projects going forward are: Cost Elimination, conditions, the demand for greater project certainty will increase to Complexity Reduction and the ability to Accommodate Change. ensure better investment performance. Elimination of redundant or unnecessary work “To reach these demands, project teams and their sponsors will Automating steps in the process to reduce engineering hours need greater capital efficiency, information integrity and schedule Utilization of standardized technologies to reduce customization, agility,” Nyquist said. “With better performance in these areas, you excess materials and manpower will be on the path to Top Quartile project performance.” For example, for every $1 billion of capital investment in a new facility, a Top Quartile project team invests $22 million less in spare parts than its lower-quartile peers. Getting to first production faster, safer and on budget
Emerson.com/ProjectCertainty
El diseño de Emerson es una marca registrada de Emerson Electric Co. © 2016 Emerson Electric Co. @EMR_Auto_Latam EmersonAutomationLatam THE DILEMMA OF SUSTAINING THE PRESTIGE OF
EXECUTIVE EDUCATION ONLINE MBAs By Diego Graglia
A virtual classroom at HBX, the Harvard online MBA. Photo: Courtesy of HBX | Harvard Business School. Business School. Photo: Courtesy of HBX | Harvard
Patrick Mullane graduated from Harvard Patrick Mullane, executive director of HBX, with an MBA in 1999 and says that University of Harvard’s executive online program. every executive job he has had ever since landed through the network of Columbia, and the Massachusetts graduates from the university. Institute of Technology (MIT) all have “It was a transformative experience internet programs of various lengths for me,” Mullane told Latin Trade. for executives, usually shorter ver- Today, aspiring business leaders have sions of their traditional MBAs.
the option of taking executive courses Business School. Photo: Courtesy of HBX | Harvard from the prestigious Harvard School of Busi- REPLICATING THE QUALITY OF
56 ness through the internet. But Mullane says he CLASSROOM LEARNING ONLINE would not trade his traditional, onsite MBA for an online degree for anything. “I still would have The big challenge for executive education on- gone in person,” he said emphatically. line is that when the courses have massive at- His opinion wouldn’t be unusual except for one tendance, they cannot replicate the quality of the detail: Mullane is the executive director of HBX, personal experience of attending a class in person Harvard’s executive online program, which offers and interacting with the professors and with ex- basic courses in finance, business, management, ecutives from other countries and other cultures. and innovation in short programs lasting eight to In response, the Stanford Business School 18 weeks. launched an initiative that tries to avoid being a Mullane recognized in an interview that this MOOC (Massive Online Open Class) and instead program has not yet finished defining its business offers a one-year program in corporate innovation model, and as a result HBX is still a complement that accepts only a select group of students. The to and not a replacement for business education students collaborate remotely in small groups, as we know it. interact in the cloud, have personalized access to And although online executive education has the professors, and each one studies at his or her had its ups and downs over the last few years, the own pace. It’s a smaller version of the MBA, with a major business schools such as Harvard, Stanford, total of eight classes.
LATIN TRADE SECOND QUARTER 2017 Harvard offers asynchronous courses and a live and direct program on the internet, HBX Live, a virtual classroom.
“We wanted to create a way to reach out glob- ally to business leaders who don’t have the oppor- Waldemar Alegría, director of CENTRUM tunity to be here,” said Peter DeMarzo, a professor Online, of the in the program, during the graduation ceremony Pontificia Universidad for the first generation of students last year. Católica of Peru. Columbia University in New York has an Alli- ance with the ExecOnline digital platform where it offers some courses from its business school on the internet. Sloan, the MIT business school, of- fers asynchronous, or flexible, executive courses for individuals – that is, students can complete the course at their own pace without having to participate in collective activities. This approach is, precisely, one of the two ways in which the PERUVIAN EXPERIENCE universities are trying to resolve the dilemma of scalability. CENTRUM Católica Graduate Business School in Harvard is attacking the problem on two fronts, Peru launched online training for executives in with asynchronous courses and also with a live 2005. The school offers an International Manage- and direct program on the internet. HBX Live is a ment MBA program with two options, onsite class- virtual classroom in which a professor transmits room teaching and online courses, and both have his class to 60 students who are connected in real the same content and workloads. time in other regions or countries. The class is The difference lies in the approach to studies.
Photo: Courtesy of CENTRUM Católica Graduate Business School Católica Graduate Photo: Courtesy of CENTRUM produced and aired from a television studio and “The off-site, or distance education, student wants the professor has 60 screens in front of his: the the flexibility to be able to carry out his or her
students can chat live and the professor sees their activities and develop competencies and receive a 57 comments on a band of messages at the bottom of learning experience tailored to their needs,” Walde- the screens, creating as interactive an experience mar Alegría, director of CENTRUM Online, of the as possible. Pontificia Universidad Católica of Peru, toldLatin “The nice thing about it is it allows the profes- Trade. sors to do what they always do”, said Mullane, He explains that the students participate in the HBX director. “The one thing about it, it is not team work activities through the Moodle platform, scalable.” regardless of where they are based, and that they Harvard’s view, he added, is that there is no also take online classes in real time through the in- single solution for providing online executive edu- ternet. The distance education homework activities cation. are complemented with “permanent monitoring” by “It’s going to be blended programs that include professors and tutors designated for each subject things like the live studio, like the asynchronous for every student. course platform, and even live components where Alegría also emphasizes that for these online people will come to campus, interact with faculty, programs it is important that the teachers “develop and then go back to their jobs,” he said. LT skills” so they can transfer their knowledge and experience through non-traditional means such as DIEGO GRAGLIA REPORTED FROM SANTA CRUZ, CALIFORNIA technology platforms.
SECOND QUARTER 2017 LATIN TRADE
Robots in action at the most modern FCA plant. AUTOMOTIVE INDUSTRY – INNOVATION INDUSTRY AUTOMOTIVE By Torrado Santiago Photo: Courtesy of Polo Automotivo Jeep Automotivo Photo: Courtesy of Polo MORE EFFICIENT VEHICLES FOR LATIN AMERICA
Although electric and driverless cars are still a long way off, the units that are manufactured and rolled out today in the region are better positioned, thanks to innovation in the industry. 58
odern design centers, plants populated The new developments are concentrated in the two with robots and plants powered by re- sector heavyweights: Mexico and Brazil, both of which newable energy, and a noteworthy in- are among the top 10 vehicle exporter nations in the crease in vehicle connectivity are all part world. Mof the refreshed menu of innovation the Latin Ameri- can automobile industry offers. CONNECTIVITY “The patent is always going to end up wherever the world headquarters are located. If it’s Nissan, it will When he talks about innovative companies in the end up in Japan; if it’s General Motors, it will end up in region, Kuri points to GM’s OnStar program. It is a Detroit, regardless of whether you have talent all over personalized subscriber wi-fi service providing naviga- the world for developing innovations,” said Mauricio tion, connectivity, and safety backed up with remote Kuri, automobile industry analyst and professor at the human support from GM, which uses Big Data and is Monterrey Institute of Technology in Mexico. part of the internet of things. In spite of this, Latin America is providing an im- The technology is available in 26 GM models and is portant share of talent and knowledge that translates being installed in the vehicles. It’s a pay service that into advances in manufacturing, reduction of emis- includes everything from starting the car to getting sions, and connectivity. a diagnosis of the mechanics if there is a problem on
LATIN TRADE SECOND QUARTER 2017 the road. “The reading of the data of all of the con- ily in technology but in manufacturing, Nissan is the nected units is a GM asset,” said Kuri. “The history (of leader,” said Guido Vildozo, an auto industry consul- each specific automobile) plays a fundamental role for tant at IHS Markit. being able to predict its needs, or to prevent incidents The company, a pioneer in electric vehicles with the when we are talking about driverless vehicles,” he LEAF model – of which it has sold more than 270 units added. in Mexico since 2014 – is aiming for mobility in the fu- The service launched in Mexico in 2013, and already ture with zero emissions and zero accidents. has more than 80,000 subscribers, and was introduced Nissan is working on safety innovations for driver- more recently in Brazil (2015) and Argentina (2016). less units with technologies based on radar, sensors, OnStar has more than 11 million subscribers world- and cameras that will be incorporated in vehicles pro- wide. duced in Mexico. The manufacturer also has a system that detects DESIGN AND LUXURY VEHICLES when the driver is sleepy or distracted. And in manu- facturing, Nissan’s Aguascalientes plant is powered Mexico, which exports up to 80% of its production, with renewable fuels such as wind and biogas made is in transition from producing low-cost cars to pre- from solid waste. mium models. The manufacture of luxury vehicles is a sign of maturity in the BRAZIL IS industry, since they are the first KEEPING PACE to be equipped with the most advanced features of con- In Brazil, the Innovar-Auto nectivity and entertain- program is achieving ment, which in turn significant impact. It’s creates a cluster of local the government policy technology suppliers. launched in 2012 to In recent years,, increase competitive- Mexico’s established ness. It grants tax in- automotive giants, centives for manufac- Volkswagen and turers in exchange for Nissan, have seen meeting specific targets the arrival of upscale in investment, safety, automakers such as and energy efficiency (at
Photo: Courtesy of Nissan Mercedes-Benz, Audi, and least 12% less fuel con- Revision on the assembly line at BMW. a Nissan plant in Mexico. sumption and reductions of There are 30 automotive between 16 and 19% for firms design centers in Mexico run by seeking higher exemptions). the private and public sectors and aca- The program expires at the end of this
demia, and the country hopes to become the year, and the government is talking about a 59 center of research and development. Nissan’s Center second, longer stage, Rota 2030, which could include of Technological Development (NISTEC) in Toluca is a more electrical vehicles and hybrids. good example. Some recent innovations are related to increased “NISTEC is part of Nissan’s worldwide Research horsepower and reduced fuel consumption of the mo- and Development network and works closely with tors, thanks to the development centers of companies centers located in the United States and Brazil. They like Volkswagen, Ford, and Fiat-Chrysler (FCA), which have a shared responsibility with them, where Mexico have also made advances in building car bodies with contributes the design of parts and the evaluation of special steel offering greater resistance and safety and vehicles,” says Herman Morfin, Nissan Mexicana’s di- less weight. rector of corporate communications. As in Mexico, Brazil’s manufacturing has leading- The reduction of polluting emissions from motors edge technology. FCA claims its Polo Automotriz Jeep is among the top priorities for research at the center. plant in Pernambuco state – where it makes the Jeep Cameras at the center make it possible to simulate Renegade, the Compass, and the Fiat Toro pick-up highway conditions and imitate extreme climate truck– as the most modern plant in the world. conditions to detect wear and tear on parts or on the The plant is barely two years old. It can produce bodywork. four models at the same time and up to 250,000 vehi- “From the standpoint of innovation, not necessar- cles per year. It has exported more than 30,000 units to
SECOND QUARTER 2017 LATIN TRADE The modern FCA factory in Pernambuco, Brazil.
RD Photo: Courtesy of Polo Automotivo Jeep Automotivo Photo: Courtesy of Polo
“Latin America might be one of the most backward regions for incorporating electrification technologies for many reasons, but the most important one is that we are a region that’s profoundly sensitive to the price of vehicles,” says Mauricio Kuri, automobile industry analyst and professor at the Monterrey Institute of Technology.
countries such as Argentina, Uruguay, and Colombia, tacular fashion,” said Vildozo of IHS Markit. and incorporates the FCA global best practices. What Many observers foresee a future with automobiles does that mean? The plant runs with low environ- that are connected, electrified, and driverless, but in
60 mental impact, includes a simulation laboratory and the region penetration of those last two will be slower. dynamic tests, and the body shop has 650 robots, of By 2025, IHS Markit projects there will be six million which 18 are in one station that can apply 100 solder units in the region, but barely 20,000 electric cars in points in 60 seconds. Latin America outside of Mexico. “The secret is the harmony that exists between men “Latin America might be one of the most backward and machines,” said Glauber Fulana, manager of the places in incorporating electrification technologies, for Polo Automotriz Jeep plant. “We have brought more many reasons, but the most important one is that we than 15,000 best practices here that have been used in are a region that is profoundly sensitive to the price of other plants, but what sets this plant apart is the com- vehicles,” Kuri said. bination of all the innovative technologies in the same The outlook for driverless cars isn’t promising productive process.” either. “We have cities with very high populations: Mexico City, Bogota, Lima, Santiago, São Paulo, Rio, and CONNECTIVITY BUT WITHOUT ELECTRIFICATION Buenos Aires,” said Vildozo. “Putting driverless cars in cities that are a lot bigger than five million people is “What we are seeing is an improvement in effi- difficult, if you take into account the congestion and ciency, in fuel consumption of the vehicles that are chaos of traffic.”LT going to Latin America, and an increase in connec- tivity, which the industry is incorporating in spec- SANTIAGO TORRADO REPORTED FROM BOGOTA
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PANAMA THE STRATEGY FOR SUCCESS A Latin Trade Special Supplement 63 Photo: Shutterstock
SECOND QUARTER 2017 LATIN TRADE | Special Supplement Panama | Interview
“EVERY DAY WE By Pilar Calderón GROW MORE AND HAVE FEWER POOR PEOPLE,” Exclusive interview with President Juan Carlos Varela Photo: Courtesy of Panama Presidency Photo: Courtesy of Panama
hree years after he became through our network of export services Panama has been one of the TPanama’s President, Juan Carlos consisting of the platform of ports, highest-growth economies in the Varela has reasons to feel satisfied. logistics, trade, financial services, world over the past decade, the Even though there are barely four telecommunications, innovation, which Latin American leader in 2017 and, million people in the country, the offer a significant multiplier effect for according to the International navel of the Americas, Panama has the activity of the Panama Canal. Monetary Fund, is predicted to have
64 had the highest sustained growth Private investment in sustained growth of more than 6% in Latin America over the last transportation, storage, and (per year) until 2022. In addition, decade. Best of all, the wealth has communications grew by almost 11% in 2018 Panama will for the first finally begun to reach the lower in this first quarter, and we expect time be the leading country in classes and narrow the index of it to continue growing. Commercial Latin America in GDP per capita, inequality, one of the highest in activity in the Free Zone of Colon surpassing Chile and demonstrating the region. The secret: a privileged (ZLC) grew by about 10%, driven by the that economic development has had geographic position, expansion of value of its re-exports, and financial an impact on reducing inequality the Canal, and now, a purposeful intermediation continues to rise. and poverty. and consistent strategy to make the Tourism, the pillar of the most of these assets. Panamanian economy already What is the long-term strategy to makes up about 10% of GDP, and maintain that growth? Panama’s growth this year is is growing stronger, stimulated Panama is seeking to set itself expected to be about 5.8%. Which by international and domestic up as the trade and logistics hub sectors will be driving it? promotion campaigns. of the Americas par excellence. Our economic strength is based The Logistics Cabinet, comprised on how we are able to integrate What are the prospects for the next of public and private sector regional trade with global commerce five years? representatives, established the
LATIN TRADE SECOND QUARTER 2017 OPINION EXPRESS
THE PERFECT CONNECTION
In the heart of Panama, just four miles Panama Pacifico offers a planning from the central and western sectors of model which harmoniously integrates Panama City, very close to the Canal, the entrepreneurial, commercial, Trans-isthmus railway, an international residential, and recreational facilities airport, and the Pan-American highway, with the surrounding ecology, you will find Panama Pacifico, a unique promoting a healthy and sustainable development where logistics, commerce environment aligned with the urban housing, tourism, and recreation planning trends for the world’s large activities are all offered in the middle cities. of an exotic landscape of mountains, valleys, and tropical forests. The government of Panama backs up this innovative entrepreneurial and The 3,500 acres will house 20,000 new residential concept with investments residential units, over 10 million square in key infrastructure projects such as a feet of commercial space, 1.5 million new bridge over the Canal that connects square feet of flexible office space, 3.9 the city center with Panamá Pacífico million square feet of infrastructure for and a new subway line for improving logistics, assembly, distribution, cargo connectivity between urban districts. movement, warehouses, and high- technology manufacturing, and 1,600 “We have invested more than $700 acres of open space that includes nature agreements, and benefit from infrastructure million, delivered more than 1,000 reserves, parks, and walking trails. connectivity unique to the region. houses and we have an entrepreneurial community with more than 285 Located on the grounds of the old “We make it easy for our clients’ cargo companies, including 3M, Grainger, American installation, Howard Airbase, to arrive at its final destination through Caterpillar, Lacoste, FedEx, VF Panama Pacifico is an alliance between a multi-modal platform, fiber optics Corporation, PepsiCo, Aggreko, PPG, the Panamanian government and the that enable any carrier to service the Cargotech, Nippro Medical, Dell,” master developer, London & Regional companies in the area, and to connect Kardonski pointed out. Panama. The development was set up in with the infrastructure of undersea cable 2004 as a Special Economic Area for the that passes through Panama. With a total investment of $4 billion purpose of attracting foreign investment over 40 years, Panamá Pacífico will to the zone. This, plus the strategic location, the offer over 10 million square feet of nearby ports, the canal, and the airport commercial space, 40,000 permanent The companies that decide to locate in the make it the perfect connection,” said jobs, and will move products worth development are offered tax, labor, and Henry Kardonski, general manager of millions of dollars through its legal incentives and exclusive operations London & Regional Panama. installations. | Special Supplement Panama | Interview
A group of children stroll through a framework for developing the growth in demand neighborhood with President Varela. inter-oceanic zone and the logistics for hotels, hospitality, poles of the Atlantic, the Pacific, restaurants, and trade. and the area around the Tocumen International Airport as a model of Panama still has integrated services, to attract greater challenges such as volumes of cargo, economies of improving skilled labor scale, value-added logistics services, and having better and advanced light manufacturing qualified employees. activities connected to supply chain What are you doing management. about that? There is vast potential for We are continuing to continuing the develoment invest in primary and of transnational activities secondary education, through special regimes: the adapting the curriculum Law of Multinational Corporate and educational Headquarters (SEM), the Panama infrastructure to an
Pacific special economic area, the increasingly globalized Presidency Photo: Courtesy of Panama Free Zones, the City of Knowledge, world that changes and the Free Trade Zone (ZLC). rapidly. The Panama market diversification, the recovery Diversification of production in Bilingual Program (English-Spanish) of regional economies, and strong the provinces is also a priority for prepares more than a quarter of a growth in transshipments and port the country. million young people in line with activity resulting from the canal international standards expansion. The Colon Free Port Tourist arrivals and hotel The Eastern Higher Technical project extends the wall of the zone occupancy have dropped. What are Institute, in Tocumen, modeled to the edge of the center of Colon, the measures the government is after Singapore’s best practices, which allows products to be sold taking to reactivate tourism? will be operational next year to retail customers with a tariff We are launching a new providing higher technical and advantage. international and local campaign, vocational training, graduating positioning Panama as a value 5,000 Panamanians each year. It will Have the economic results of the proposal that features nature, offer two- and three-year training Canal expansion met expectations? biodiversity, our culture, eco- courses, with 70% of content More than 1,500 neo-panamax tourism, hiking, bird-watching, practical application in companies ships have passed through the the tropical countryside, and the and 30% theoretical training to widened channel, more than were abundant variety of jewels that facilitate fast integration into the forecast. New records for transits Panama has and that the world still labor market. and cargoare being set constantly.
66 doesn’t know about. It is estimated that the Canal will With that we hope to gain a How is the economic recovery of the generate revenues of $9.1 billion strong position in the United States, Free Trade Zone (ZLC) coming along? between 2018 and 2022, contributing European, and Canadian markets, Imports have grown by 22% more than $1.6 billion to the and to close 2017 with significant and re-exports by 9.3%, thanks to national Treasury, a new record. LT
OTHER SECTORS THAT WILL BOOST THE ECONOMY
“Foreign Direct Investment, about 10% of GDP, grew by billion in five year is another engine of growth, bolstered 17% between 2015 and 2016. In just one year, it exceeded by megaprojects like Panama City’s Metro Line 2 and the the investment for expanding the Panama Canal, and is extension of Line 1, the third and fourth bridges over the Central America’s leader, with about 47% of the region’s Panama Canal, expansion of the Pan-American Highway, investment”, President Varela says. and investments in educational infrastructure, water, and “Public investment, with a portfolio of more than $20 sewerage.”
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LATIN TRADE SECOND QUARTER 2017 OPINION EXPRESS
THE APPEAL OF PANAMA IN INTERNATIONAL MARKETS
The Global Bond 2047 issued on May 4 attracted four projected to fall to 36.9% in 2018 and to 33.1% by 2022. With times more money than the US$1 billion offered and is one that, Panama undoubtedly holds a competitive position of the best letters of introduction Panama could have in in relation to countries with a similar investment grade international markets. rating. The response of foreign investors to Panama’s bond Another issue that interests investors is the prevention issues doesn’t come free. The good country risk profile, of asset-laundering, and here the Panamanian government economic growth (6.2% in the first quarter of 2017), low has made major advances in preventing money-laundering, inflation rate (0.7% in 2016), and low unemployment a demonstration of its capacity for and interest in meeting (5.5% at year-end 2016), plus growing diversification of international demands. productive sectors, are positive signs that international These leading indicators, the robust growth of the investors recognize and reward. economy, and a conservative fiscal policy have convinced The net debt/GDP ratio – an important indicator for the credit rating agencies to maintain Panama’s sovereign credit rating agencies – also sends signals that create debt credit rating as BBB with a stable outlook, allowing confidence. Debt has remained below 40% of GDP and is international investors to believe in the country.
PANAMA’S DEBT 2016
• 78.2% of Panama’s debt is issued in foreign debt instruments, 21.8% in the domestic capital market. • 97.6% is denominated in U.S. dollars and 2.4% in other currencies. • 83.4% is issued in fixed income instruments and 16.6% in variable rates. | Special Supplement Panama | Economy COMPACT
By Pilar Calderón and Marlen Testa Testa and Marlen By Pilar Calderón DYNAMO The strategy for maintaining growth is “promoting public investment, creating conditions that will attract foreign investment, and making the financial system more competitive,” Dulcidio De La Guardia, Minister of Economy and Finance.
Anyone who has not visited Panama “The resources generated by the City in the last ten years, or who goes Panama Canal and a series of there for the first time, will certainly investment projects, real estate and be surprised. Lining the length and business activities, and financial breadth of the bay, the imposing intermediation will be fundamental,” he skyscrapers are the first sign of a explained. thriving Panama, a country that has De La Guardia said the strategy for achieved the highest growth rate in maintaining growth is “promoting Latin America –and one of the highest public investment, creating conditions in the world– during the last decade. for attracting foreign investment, and Between 2001 and 2013, this narrow making the financial system more strip of land of only 29,157 square miles competitive.” home to four million people posted an Aristides Hernández, an economist average annual growth rate of 7.2%, and president of Latin Consulting, according to the World Bank. The pointed out that “although the numbers economy grew by 6.1% in 2014, dipping are good, the biggest challenge that Dulcidio De La Guardia, slightly to 5.8% in 2015 and 5.4% in continues to confront the country is to Minister of Economy and Finance 2016. The 2017 forecast is to remain make that growth inclusive.”
steady at 5.4% and rise to 5.5% in 2018. Another area where much work and Finance Photo: Courtesy of Ministry Economy The most significant changes are the advances in remains to be done is in the financial system, where Panama lessening inequality. Between 2014 and 2016, 107,667 people is working hard to comply with the standards demanded by
68 moved out of poverty, reducing the population that lives the international community, after the appearance of the so- in poverty to 22.1% from 25.8%, according to Ministry of called “Panama Papers.” Economy and Finance (MEF) statistics. Minister De La Guardia said that Panama is committed Despite these advances, inequality persists, and is high in to comply with the highest international standards (of rural and indigenous areas. In urban areas, extreme poverty disclosure and enforcement) without neglecting the is now below 4%, but in rural areas it affects about 27% of competitiveness of the financial system, which is levered people. In the indigenous areas, or “comarcas”, the poverty by a dollarized economy, connectivity as the “hub of the rate exceeds 70% and 40% of the population live in extreme Americas” and its logistical performance. poverty. Diversification of the economy has been key to keeping the economic bonanza going for more than a decade,Hernández THE GOVERNMENT’S STRATEGY said. “When some sectors fall, others rise,” he said. “This year High growth will continue in the near term. MEF the sectors tied to international trade such as the Free Zone, projections show that, between 2018 and 2022, economic the Panama Canal, and the ports have recovered and are growth will be between 6.1% and 6.2% and GDP will rise driving the economy. Meanwhile, others like car sales, which in from $63.68 billion to $89.63 billion. previous years contributed to economic growth, are down.” LT The Minister of Economy and Finance, Dulcidio De
La Guardia, said growth will be driven mainly by the BY PILAR CALDERÓN REPORTING FROM BOGOTA transportation, logistics, trade, and construction sectors. AND MARLEN TESTA FROM PANAMA CITY
LATIN TRADE SECOND QUARTER 2017 The containership Spirit of Sydney transiting the Panama Canal. Photo: Shutterstock
GDP PROJECTIONS 2018-2022 (billions of dollars) THE ECONOMY IN NUMBERS Real GDP Year GDP Growth (%) Año 2016 1st Q 2017
2018 63.68 6.1% GDP 4.9% 6.2% 2019 69.09 6.3% Unemployment 5.8% 5.6% 2020 75.21 6.2% Inflation 0.7% 0.9% (cumulative) 2021 82.06 6.3% Fiscal deficit -1.5% GDP + 0.3% (superavit) 2022 89.63 6.2% 69
Source: Ministry of Economy and Finance, Panama
CANAL RECORD
When the Expanded Canal was of operation. An average of 14,000 with 8.3%. inaugurated on June 26, 2016, the ships pass through the Panama In 2016, the Canal generated $2.4 Canal’s capacity doubled. So far, Canal in a year. billion for Panama’s economy. the new lane has received more Container carriers represent One year after the inauguration than 1,400 neopanamax ships, about 43% of traffic transiting of the new lane, Canal equivalent to an average of 5.9 through the new locks, followed Administrator, Jorge Luis Quijano, ships per day, double the two to by gas carriers of liquid petroleum said: “The widening of the three transits per day that were gas (LPG) accounting for 29.1%, and canal has exceeded our original initially expected for the first year liquid natural gas (LNG) tankers expectations.”
SECOND QUARTER 2017 LATIN TRADE | Special Supplement Panama | Investments
“If foreign investment continues at this rate, we should
By Pilar Calderón By Pilar Calderón surpass the record of 2016.” Alberto Alemán, Director of Proinvex THE BET ON FOREIGN INVESTMENT
One of Panama’s greatest challenges over the next brand created through the efforts of several few years is to grow foreign direct investment. institutions to promote Panama as the best option The challenge doesn’t appear to be easy in an in the region for investment and tourism, activities environment in which which together account the capital flows to Latin for more than 20% of America shrank by 10% Gross Domestic Product in 2016 and the Trump (GDP). “Given that the administration’s plans Canal is one of our aim to encourage a major main strengths and repatriation of capital to competitive advantages, the United States. we decided on the brand Panama, however, ‘Panama, the Great has been one of the few Connection’ that has exceptions to the reducted been used by the Canal investment flows. Foreign Authority of Panama. Direct Investment grew The country brand and by about 17% in 2016, the destination brand and in the first quarter of are inseparable,” said this year it increased by the Proinvex director. another 10% compared And the third with the previous year. reason for government “If it continues at this Alberto Alemán, optimism comes from Director, Proinvex. 70 rate, we should surpass special groupings Photo: Courtesy of Proinvex the record of 2016,” the like the Headquarters director of Proinvex, Alberto Alemán, told Latin of Multinational Corporations. In 2016, Panama Trade. Proinvex is Panama’s agency for promoting granted licenses for 134 registered companies, which investment and exports. represent an investment of more than $800 million, There are several reasons for the optimism. One plus 6,000 jobs. And 46 new companies have settled is the recent opening of diplomatic relations with in the Panama Pacific Special Economic Area. “We China (Panama had been one of the 20 or so countries are betting that Panama will continue to attract the that maintained relations with Taiwan). China is the most sophisticated exportable service activities for second most important user of the Panama Canal, multinational companies,” Aleman said. the country’s fourth largest trading partner, and the Among the new investments that have arrived in largest supplier of products for re-export in the Colon 2017, Nestlé inaugurated its Purchasing Division, Free Zone. “It is very probable that it will create a Nestrade; Cemex opened the Admixtures additives considerable volume of new investment projects, plant; FedEx, a logistics center in the Panama Pacific since Panama functions as a bridge for Chinese Special Economic Area; and Hewlett Packard launched companies to all of Latin America,” Alemán said. regional distribution operations in the Colon Free Another reason is the launching of the country Zone. LT
PILAR CALDERÓN REPORTED FROM BOGOTA
LATIN TRADE SECOND QUARTER 2017
| Special Supplement Panama | Tourism COPA AIRLINES: By Pilar Calderón and Darma Zambrana and Darma Zambrana By Pilar Calderón
of uninterrupted growth Photo: Courtesy of Copa Airlines Photo: Courtesy of Copa
Copa Airlines, Panama’s flagship In the first five months of this to 2016, and 800,000 more passengers, airline, celebrated its 70th birthday in year, Copa Holdings – owner of Copa with more new developments to June with the recovery of its growth Airlines and Wingo, a low-cost service come. “We are planning for the arrival rate, in both the number of seats and that operates in Colombia – carried of the new Boeing MAX9 airplanes passengers. 7.8 million passengers, an increase of starting next year and the opening of “After two years with many 11.5% year-over-year. new routes at the end of 2017, to the challenges due to the economic “Copa is fundamental for the cities of Denver (United States) and situation in Latin America – 2015 and development of tourism since it covers Mendoza (Argentina).” 2016 – our 70th birthday coincides a very important market, which has With these projections, it is with a year of economic recovery,” been the primary market for Panama – expected that the contribution of the Pedro Heilbron, executive president of Central and South America,” Panama’s air travel sector to Panama’s economic Copa Holdings, told Latin Trade. “We Minister of Tourism, Gustavo Him, development will be strengthened and are starting to see economic growth emphasized with Latin Trade. it will account for 4.2% of the Gross in the region, and this allows us to Domestic Product. “If we add tourism, think more about the airline’s future GROWTH DOESN’T STOP the number rises to 12% and, with development, and not so much about Heilbron also told Latin Trade that other sectors, the percentage of the
72 its immediate survival, as was the the company’s outlook for 2017 is for contribution to the economy would be case in recent years.” 6% growth in seats offered compared even higher,” he said. LT
Copa, which was founded to service only the domestic market with the name “Compañía Panameña de Aviación,” today is the leading carrier of tourists to Panama, with 13 million passengers in 2016, and the airline has received international recognition for its services. Last year, with an on-time record of 88.75%, it was the second most punctual airline in the world for the second consecutive year, according to OAG (operator of the world’s largest data base on airline schedules). In addition, for the third consecutive year, Copa was rated the “best airline in Central America and the Caribbean” in the rankings of the British consulting firm Skytrax, and for the second year won the award for having the “best airline personnel” in the same region. Photo: Courtesy of Copa Airlines Photo: Courtesy of Copa
PILAR CALDERÓN REPORTED FROM BOGOTA AND DARMA ZAMBRANA FROM PANAMA CITY.
LATIN TRADE SECOND QUARTER 2017
INNOVATION BRINGING THE WORLD PRIVATE AVIATION – AVIATION PRIVATE CLOSER TO LATIN AMERICA
Manufacturers of executive jets strive to increase the autonomy of their models and to include more innovation and technology to continue seducing their clients. By Jeff Zbar By Jeff 74
LATIN TRADE SECOND QUARTER 2017 When Bombardier debuts its Global 7000 as Latin America should take delivery of another 650 business-class jet in 2018, it will be only the latest aircraft. In contrast, the US market will see its fleet example of aviation innovation designed to serve grow by 3,800 over the next 10 years, adding to some the world’s business elite. For leaders across Latin 13,217 active business jets based in the US, notes America, one of the largest, ultra-long range private AMSTAT, a leading provider of industry statistics. jets of its kind will further enhance in-region air Though slowed by slides in oil production and travel – and improve connections to the world. the sluggish global economy, Latin America’s need “As bigger aircraft have been developed, the Latin for executive jets suitable for global travel remains American market became more globalized,” said steady, said Brian Foley, president of Brian Foley As- Stéphane Leroy, Bombardier regional vice president sociates, an aviation consultancy based in Sparta, of sales in Latin America. “Passengers want to maxi- New Jersey. Given the long distances between world- mize their time, because time is money.” wide business centers, newer long-range business Currently, some 685 business aircraft are in opera- jets, such as the Falcon 5X and 8X, the Gulfstream tion across the Americas south of the United States 500 and 600, and Bombardier Global 7000 will prove and Canada, according to Bombardier statistics. popular, he said. In addition, aircraft able to operate Between 2017 and 2026, the fleet will nearly double out of grass or gravel fields, such as the new Pilatus 75
Bombardier Global 7000 flies over Shanghai Photo: Courtesy of Bombardier
SECOND QUARTER 2017 LATIN TRADE HONDAJET, LATEST JAPANESE TECHNOLOGY IN THE SKIES HondaJets stationed on the factory platform, at Greensboro, North Carolina
Honda Aircraft Company is “It flies the fastest, highest, most operating cost makes it a very striving to place its HondaJet quietly, uses less fuel, and has efficient alternative. Its main at- model in the Latin American the most spacious cabin in its tribute is that the engines are market. entire class.” mounted on the wings, which “It’s the most advanced light The aircraft has a range of improves the performance by re- business jet in the world,” says 1,223 nautical miles, can fly at ducing aerodynamic resistance. Guillermo Suárez, sales manager an altitude of 43,000 feet and at The HondaJet has seven seats for Seijiro Yazawa Iwai Aviation. speeds of up to 422 knots. Its low and comes with a full toilet. Photo: Courtesy of HondaJet
and allow maintenance to be performed in timely fashion to avoid having an aircraft idled in some re- mote location, Foley said. Owners and passengers alike will appreciate high- er speeds with reduced fuel consumption, which lead to greater range. Most notable among in-cabin improvements are high-speed internet service, such as Bombardier’s “Ka-band” high speed, satellite- based wi-fi system which allows high quality video conference calls on board. Photo: Courtesy of Bombardier “Being in the air will seem like you’re still on the ground,” said Foley.
76 Bombardier’s All-New Premier Cabin Priced at US$72.8 million, the Global 7000 will be on Global 5000 and Global 6000 Aircraft. an impressive feat of private aviation technology, said Mathieu Noel, Bombardier’s director of product PC-24 business jet and other improved turboprops, strategy and design. Capable of accommodating 19 could also find a niche. passengers, carrying more than 60 pieces of luggage, The Bombardier Global 7000 has a range of 7,400 and flying the skies at Mach .995, it will be the fast- nautical miles which will put all of North America, est and largest jet of its kind serving the business Europe, and parts of Asia within the jet’s reach customer, Bombardier executives claimed. without refueling. By comparison, the Gulfstream Its new wing design will allow not only faster 650ER lists a range of 7,500 nautical miles and a speeds in flight, but slower approach speeds which passenger capacity of 19 passengers. The range are ideal for shorter runways, Noel said. For a mar- of the Pilatus is estimated by the manufacturer to ket planning for tomorrow’s growth on the global be up to 1,950 nautical miles. Four models of the stage, air travel will provide the connection. Textron Aviation King Air turboprop have ranges “Competition can drive innovation and demand,” between 1,260 and 2,692 nautical miles. Noel said, “but the main driver is the customers and Other innovations in executive aircraft include what they are asking for.” LT improved navigation technology. Also, predictive maintenance systems can identify potential issues JEFF ZBAR REPORTED FROM MIAMI.
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*Theoretical range with eight passengers, four crew and NBAA IFR fuel reserves. Actual performance will be affected by ATC routing, operating speed, weather, outfitting options and other factors. EVENTS CFO By Thierry By Thierry Ogier FORUM SÃO PAULO GOING DIGITAL CFOs from dozens of Brazil’s leading Paulo Firmino A.S. Dias, Financial Controller, CommScope Brazil David Beker, Chief Brazil Economist and corporations attended Fixed Income Strategist, Bank of America Merrill Lynch the forum organized by the Council of the Americas, held in São Brazil is leaving behind Paulo’s Intercontinental the worst recession in Hotel in May. They its history, financial discussed the state of executives agreed the economy as well as during the Council of the specific issues related Americas CFO Forum in to their day-to-day São Paulo, Brazil. professional experience. Paulo Mendes, CFO, SAP Brazil
“We now have more time to analyze and think smart to help the business grow," said Serafin Abreu, CFO of IBM Brazil. 78 Luciana Braga, Country Head of Finance, Brazil, Panalpina; Serafim Abreu, CFO, IBM Brazil Antonio F. Peñate, Vice President of Finance & CFO, Janssen Latin America
Angela Pugliese, CFO, Richemont Brasil; Crislene Bertolini Lupo, Manager, UPS; Rogerio Menezes, CFO, South Cluster, Smurfit Kappa; Guillermo Avalis, Controller, Latin America, Ecolab Photos: Julia Salles Photos: Julia
LATIN TRADE SECOND QUARTER 2017 EVENTS FORUM CFO BOGOTA By Santiago Gutiérrez Gutiérrez By Santiago A VOLATILE ENVIRONMENT We live in a high liquidity world, where relatively small changes in interest rates produce large swings in capital flows and, hence, in exchange rates. This is a key takeaway from the CFO Forum organized in Bogota by the Council of the Americas.
A global commodity crisis of unpredictable dimensions cut revenues of Colombia’s oil producer Ecopetrol in half. A deep and smart cost containment program allowed management to keep all of its personnel on staff.
Investors worry as much about macroeconomics as about company- specific conditions and strategies, said Grupo Aval´s VP of Financial Planning and Investor
Relations, 79 Jean P. Antelo, Global Transaction Alejandro Porras, Corporate Tatiana Uribe. Services Head Andean & CAC, Tatiana Uribe, Grupo Aval Treasury Director, Ecopetrol Bank of America Merrill Lynch
Juan José Echavarría, Governor, Banco Adriana La Rotta, Senior Director, Media Relations AS/COA; Claudio Irigoyen de la República de Colombia Carolina España, Director Representative, CAF Colombia Bank of America Merrill Lynch Photos: Amado. David
SECOND QUARTER 2017 LATIN TRADE For Sales Contact: Izzy Gonzalez, [email protected] Office: 305-400-6827 Cell: 305-903-0725 For Sales Contact: Izzy Gonzalez, [email protected] Office: 305-400-6827 Cell: 305-903-0725 B:8.375” T:8.125” S:7.625”
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