PANAMA GAINS HEFT MASTERS at EXECUTING STRATEGIES David Bojanini, GRUPO SURA Gabino Gómez Carbajal, BIMBO Thilo Mannhardt, ULTRAPAR

LOGISTICS: PANAMA GAINS HEFT MASTERS AT EXECUTING STRATEGIES David Bojanini, GRUPO SURA Gabino Gómez Carbajal, BIMBO Thilo Mannhardt, ULTRAPAR

WEF: HUMANIZING THE DIGITAL AGE Honoring Sustainability 15 companies vie for the Latin Trade IndexAmericas Award Why they are the best

YOUR BUSINESS SOURCE FOR LATIN AMERICA » WWW.LATINTRADE.COM » FIRST QUARTER 2018

FIRST QUARTER 2018/VOL. 26/No. 1 CONTENTS

6 23 20Interview: 16 14 8 12 10 22 Latin Americans will vote for change Ispoverty abusinessissue? Greedy Governments Sustainability Award in 2018 leaders ofinnovation in TD. Copernion Global connects businesses and rewards Digital Transformation By Lourdes Casanova Multilatinas “Entrepreneurs must be society’s heroes.” A new agendatodrive theeconomy Debates A shiftingrelationship LT BoardofEconomists By John Price The Contrarian Opinion Multilatinas: Gettingthrough badtimes Where are more taxespaid? Who pay more taxes? LT.COM How much doesitcosttofllyour carwithgas? English Latin America still doesn’t have a good commandThe stainofcorruption of The Scene By Santiago Gutiérrez Letter from theeditor Latin America in focus Latin Trade IndexAmericas Inspiring digitaltransformation Striving forgrowth Policy makers and academics Gustavo Cisneros

27 28 24 40 Cover: 33 32 31 30 Latin Trade IndexAmericas Thilo Mannhardt, Ultrapar Gabino Gómez Carbajal, Bimbo David Bojanini, SURA Sustainability Award 2018 Marisol Argueta fexibility we’re dead” rules. with more empathy and fewer American skies Sustainability Award Strategy andexecution Moving aheadontrade integration Director forLatin America,WEF Responsible age leadershipinthedigital WEF SãoPaulo Private Aviation social innovation, anddevelopment. if environment, corporate governance, Why they were selected in the categories 15 companiescompeteforrecognition. COVER STORY “Patience andagoodroad map” “Long-term visionandagility” “ Interviews Opinions from specialistsinthecorporate world Business: Confronting turbulence Humanizing digitalization Confdence, innovation fy Latin In such a fast-changing environment, without : • Illustration: FIRST QUARTER 2018 YOUR BUSINESS SOURCE FOR LATIN AMERICA AMERICA LATIN FOR SOURCE BUSINESS YOUR Shutterstock •Cienpiesdesign S Honoring ustai 15 companiesviefor the

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LOGISTICS: PANAMA GAINSHEFT Latin Trade IndexAmericas Award nability » WWW. LATINTRADE Why theyare thebest EXECUTING STRATEGIES .COM Gabino GómezCarbajal, THE DIGITAL AGE DIGITAL THE

David Bojanini, Thilo Mannhardt, Thilo »

HUMANIZING HUMANIZING FIRST QUARTER MASTERS AT GRUPO SURA

ULTRAPAR WEF: 2018 BIMBO LATIN TRADE

CONTENTS

LATIN TRADE magazine BOARD OF ADVISORS Jorge Becerra, Richard Burns, FIRST QUARTER 2018/VOL. 26/No. 1 Raúl Katz, Thilo Mannhardt CEO/EXECUTIVE EDITOR Santiago Gutiérrez Opinion MANAGING EDITOR Élida Bustos COLUMNISTS John Price, Lourdes Casanova, BCG 42 Companies that lead in societal impact reap fnancial benefts CORRESPONDENTS LATIN TRADE / LATINTRADE.COM Argentina Charles Newbery, David Haskel By Jorge Becerra Brazil Thierry Ogier (São Paulo) Chile Emily Russell China Natalia Villegas Logistics Colombia Alejandro González, Pilar Calderón 43 Panama Pacifco U.S. David Ramírez, Jeff Zbar (Miami); Diego Graglia (California); José Luis de Haro (NY) The megaproject in the heart of the Americas Mexico Daniela Clavijo (Mexico City), Nancy Ibarra (Monterrey) Peru Adriana Roca, Simeon Tegel Uruguay Diego Stewart 44 Panama heads for the skies CONTRIBUTING EDITOR Gabriela Calderón (Research) Tocumen and Copa Airlines investments TRANSLATION Ken Emmond COPY EDITING Lucy Conger (English), Élida Bustos (Spanish)

ART DIRECTOR Camilo Jaramillo :: studiovisual.co Editorial Design Nancy Cuéllar Castillo Photographic Edition Freddy Vargas

ORIGINAL DESIGN Enrique Franco Mendoza

LATINTRADE.COM DEPUTY EDITOR David Buchanan RESEARCH Santiago Espitia COLUMNISTS Cynthia Arnson (The Wilson Center), Arturo Franco (The Atlantic Council) Margaret Myers (The Inter-American Dialogue), The Inter-American Development Bank, OECD 46 From Panama to the world Dan Restrepo, Senior Fellow, Center for American Marportmad Group, SeaLand and Intercoastal Progress, former advisor to The White House. SPECIAL GUEST COLUMNISTS Deborah Ancona (MIT), Felipe Barrera (Harvard University), Marine expand their business Harold Trinkunas (The Brookings Institution), The World Bank LAC Department BOARD OF ECONOMISTS Andrés Neumeyer (Argentine Central Bank), Roberto Urban Transformation Rigobón (MIT), Esteban Rossi-Hansberg (Princeton University), Andrés Velasco (Columbia University), A huge infrastructure project is also standards similar to those found in other neighborhoods. The underway that will transform the circulation city municipal government has begun to pave streets, build of trucks and cargo in downtown Buenos parks, and equip those areas with electricity, sewerage, and BUENOS AIRES Aires from next year. The city is investing water services, all in consultation with the residents who, as $650 million to speed up the movement mayor Horacio Rodríguez Larreta says, know best “what the Alejandro Werner (IMF) of goods and passengers in and out of the priorities are”. URBANTRANSFORMATION TAKES ON A NEW AIR port and bus terminal by running them Upgrading living conditions in slums may reduce crime, t Muvin, a bike shop in the wealthy Palermo “It’s become fashionable,” says Agustín Ávalos, 24, largely unnoticed through a 4.3-mile- which has risen in part because of the advance of drug cartels in district of Buenos Aires, sales have boomed a salesman at the shop who says he can cut through long underground highway right through the shantytowns in recent years. ever since it opened fve years ago. The traffc to his flm school in half the time it would take downtown and the wealthy Puerto Madero “The perception of insecurity is very high today,” says Argentine capital had started building bike by bus. district. This project will ease traffc and University of Buenos Aires social sciences professor Mercedes Alanes, surpassing 110 miles by now, and increasing For porteños, as the residents of the port city are create new parks. Calzado, author of “Inseguros” (“Unsafe”), a book about urban numbers of people opted for cycling as a cheap, healthy, known, getting around is a hassle. Traffc swells on Another important project is an crime. “The feeling is that if you get on the bus, your cell phone and quick way to get around. weekdays when people from the suburbs swarm in for underground downtown hub that will could get stolen.” LATIN BUSINESS TRAVELER work, doubling the 3.1 million population to 6 million interconnect four commuter train terminals. Two years ago, the city government created a new police people. force, scrapping the previous structure run by the federal To reduce congestion, the city government is URBANIZING SLUMS authorities. The new law enforcement agency can now encouraging people to leave their cars at home. The transport revamp is perhaps the most implement its own initiatives which focus on offcer training Also, sidewalks have been widened, more streets visible sign of Buenos Aires’ transformation. and incorporating technology into operations, including EDITOR Rochelle Broder-Singer pedestrianized, and bikes can be borrowed for free. And But the city is also becoming greener and more installing more security cameras and setting up big data the subway is being expanded, as well as the Metrobus, sustainable. Recycling bins dot the sidewalks; platforms that can pinpoint hotspots for theft. Instead of a transportation system of dedicated bus lanes. supermarkets no longer offer free plastic bags, carrying out administrative duties, more police offcers are being some parks and plazas once run down are deployed to patrol the streets. being fxed up, and huge water works have A survey by the Torcuato Di Tella University’s Research TRANSLATION Aimara Farhat Photo: Shutterstock ended chronic fooding in some areas. Also, the Laboratory on Crime, Institutions, and Policies, shows that in 4 poorer southern suburbs, long overlooked, has December last year 26.7% of the city’s households said they were been spruced up and will host the Summer victims of a crime during the previous 12 months. That’s up from Youth Olympic Games in October this year. 25.2% a year earlier – and down from 28.6% in December 2015. Another radical change is the launch of With the new police force, Calzado is confdent that “sooner urbanization of the slums to upgrade them to or later, there will be improvements in security.” LT

Charles Newbery reported from Buenos Aires. 50 51 SALES VICE PRESIDENT María Cristina Restrepo •

Puerto Madero SALES MANAGER SOUTHERN CONE Mariano Vergara-Hegi

LATIN TRADE FIRST QUARTER 2018 FIRST QUARTER 2018 LATIN TRADE ADMINISTRATIVE ASSISTANT María José Vázquez 50 Buenos Aires takes on a new air ADMINISTRATIVE AND FINANCE DIRECTOR Claudia Banegas The South American city aims at sustainability.

IT Luxury Harlan Lax, Dallas R. Cobb FOR ADVERTISING/SPONSORSHIP OPPORTUNITIES 52 Cars: Piloting the swell of [email protected] technology LATINTRADE.COM SENIOR MARKETING ASSOCIATE Rosemary Begg

Editora Latin Trade LTD y Editora Latin Trade Colombia SAS Events CUSTOMER SERVICE AND SUBSCRIPTIONS: Please visit www.latintrade.com to order online or call 1-305-749-0888 /1-786-499-9725. Latin Trade 54 CFO Forum Lima (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 55 CFO Forum Miami illustration without written permission of the Publisher is strictly prohibited.

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LATIN TRADE FIRST QUARTER 2018

6 LATIN TRADE LETTER FROM THE EDITOR S all businesses. alistic proposition. More and more, it is a necessity for championed promotion of sustainability among Latin r ness management become part of the solution to thethreaten Latin America’s future. “It isurgent thatbusi of poverty and the widespread prevalence of corruptionCasanova, in her column (Pg. 22), shows how the growth sectors. between 3% and 19% higher than the average for gas,their and banking – obtained multiples of valuationconsumer goods, biopharmaceutical products, oilbest and companies in ESG from four sectors – packagedBecerra presents in his column (Pg. 42) shows that the stock exchange, ahighermarketvaluation. oper porate governance issues (ESG) have better fnancialpanies thatare strong insocial, environmental, andcor and data andresults of2,000studiesandshowed thatcom in the Sustainability Award IndexAmericas Trade Latin asking for, anditcannotbeotherwise. environment. That is what countries are increasingly egion’s social problems.” problems.” social egion’s BySantiago Gutiérrez The Inter-American Development Bank (IDB) has Social conditions also require sustainability. Lourdes The Boston Consulting Group report that Jorge The numbers show thatsustainability isn’t anide FIRSTQUARTER 2018 ational performance, and when they are listed on a Journal of Sustainable Finance Sustainable of Journal needs without eroding the social and physical m tury. Businesses have to prosper and grow ustainability isacriticalissueforthe21st cen as uch as they can so they can meet clients’ For example, an article published in 2015 are themost outstandinginsustainability. Latin Trade a necessityforbusiness. That’s why, startingthisyear, Sustainability is not an idealistic goal. Rather, it is increasingly brought together the will recognize the companies in Latin America that - - - - - the focusofcorporate action. name to those that have chosen to make sustainabilityperhaps even more important, to add your company’sbest. The next step istolearnfrom theirlessonsand, issue of the magazine, we enthusiastically recognize the in ther bution to economic development of the best companiesity andcorporate governance, andrecognize thecontri the standar ment. The prize aims to highlight best practices,many otherplayers linkedtothesustainability move raise want to support the proposition of the Bank and of AWARD. LATIN TRADE INDEXAMERICAS SUSTAINABILITY 100 corporate leaders to recognize their work withthis year the stock exchanges. of 6,000 frms whose shares are traded on the regionalperformers inthesear ment. Using a battery of 400 indicators, the 100society, best corporate governance, andeconomicdevelop performance inpractices favorable totheenvironment, benchmark, the IndexAmericas, to quantify companies’American companies. In 2016 the bank established a [email protected] EXECUTIVE DIRECTOR

Welcome, businessmen, to the 21st century. In this With this prize, which we will award every year, we Building ontheimpressive methodology oftheIDB, egion. egion. Latin Trade ds of environmental and societal responsibil selected the best among those eas were chosen from a universe LT - - - - DRIVE MEANINGFUL

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Coachfederation.org | 1.888.423.3131 | [email protected] 8 THE SCENE LATIN TRADE duct business in English. duct businessinEnglish. American countriesrated "low", meaningpeopleare notable tocon ability among 1 million peoplein in the 80 EFcountries. EPI - English Seventeen ProfciencyOnly other Argentina, Indexlatin 2017 Costawhich Ricatested and language Dominican Republic rank "moderate" can Republic (46%). form ofcorruptionintheregion are inMexico (51%)andtheDomini bribes to gain access to basic services.in Latin The America highest –more incidences than 90of millionthis Theypeople also in show20 countries– that almost paid one-third of the users of public services tin America, according to Transparency Internationalsurveys. The policeandpoliticiansare seenasthemostcorruptgroups inLa Latin America still doesn’t have a Prime Minister/President El Salvador Venezuela Ecuador Guatemala Colombia Peru Panama Cuba Chile Mexico Uruguay Brazil Costa Rica Dominican Republic Argentina Electedrepresentatives Judges andmagistrates FIRSTQUARTER 2018 Average Source: Transparency International, 2016/2017, publishedinOctober. Government offcials Business executives Local government Religious leaders Religious good command of English The stain of corruption of stain The Country LATINAMERICA INFOCUS Tax offcials Source: EF-EPI–EnglishProfciency Index, 2017. Police 0

25% 36% 36% 37% 40% 43% 45% 47% 47% Score 45,70 45,71 49,42 49,52 49,97 50,50 50,68 50,83 51,50 51,57 51,73 51,92 53,13 56,31 56,51 01 02 03 04 50 45 40 35 30 25 20 15 10 5 Low % saying "most"or"all"arecorrupt Very low - - - high cost of gas infuel-richhigh costofgas lands. lo bons is no guaranteehydrocar of thatproducer big a theis country price a because ofJust gasoline will be How much does it cost to to cost it does much How Venezuela Ecuador Bolivia Puerto Rico Colombia Panama Surinam Dominica Haiti El Salvador Guatemala Guyana Nicaragua Mexico Honduras Paraguay Costa Rica Peru Bahamas Jamaica Argentina Cuba Brazil Chile Barbados Uruguay w. Brazil and Argentina are prime examples of the fll your carwithgas? asPrecio País 0,01 0,39 0,54 0,79 0,82 0,82 0,85 0,87 0,92 0,93 0,94 0,99 1,02 1,02 1,02 1,06 1,06 1,09 1,16 1,22 1,26 1,30 1,30 1,32 1,67 1,77 *Price ofgasolinainlitersanddollars, on January 29, 2018. -

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Mexico/Central America: Matthew Murphy, +1 305 849 0225 Caribbean/South America: Juan Pablo Nunez, +1 912 484 4282 Brazil/South America: Luiz Sandler, +1 912 480 0709 10 LT.COM LATIN TRADE revenues. * Te o datafcial refer rate to tax the of by divided eachcountry net the result of companies the for adiferent period, eachtime result from value the of taxes paid as aproportion of total Note: The analysis compares the25companiesofLT MultilatinaIndex. (*)BillionUSdollars. Chile Brazil Colombia Mexico Argentina Peru Country Construction Others Tech & Telecom Electric Power Sector Industrial Finance Transport Services Mining eai retn Steel Argentina Tenaris Country Company eduBai Steel Brazil Gerdau erba rzlOil&Gas Brazil Petrobras afi rzlFood &Beverage Brazil Marfrig Vale Total NOTE: FIRSTQUARTER 2018 most taxesasapercentage oftotalsalesinrecent years. Companies in the electriciticy and technology and telecommunications sectors in Latin America have paid the ve hardest-hit companies are Brazilian. Brazilian. are companies hardest-hit ve f the of Four companies that make up the Latin Trade Multilatinas Index fell by an average of 21.7% between 2014 and 2017. Multilatinas haven’t had much luck in combating the tough economic times in the region. Annual revenues in lowest rate, companiespay less. paythe heaviest tax burden on revenues received. Even Atthe thoughother end itof hasthe spectrum, the region’sin Chile, secondwhich lowesthas the tax rate on net revenues, Peru is the country where companies MULTILATINA INDEX:SUFFERING THE BAD TIMES Analysis oftheLT1000 companieswithrevenues over $100millionin2016, excluding large oilcompanies, several withstateparticipation: GREEDY GOVERNMENTS ts f pro on rate Tax rzlMining Brazil -- 25.5% 34.0% 34.0% 30.0% 35.0% 29.5% WHERE ARE MORE TAXES PAID? PAID? TAXES MORE ARE WHERE WHO PAY TAXES? WHO MORE .3 .1 .8 .7 .7 2.21% 3.06% 3.33% 1.57% 3.56% 4.38% 3.58% 2.87% 4.74% 3.60% -0.60% 3.09% 1.88% 3.72% 2.48% 4.94% 3.80% 3.86% 1.78% 3.32% 2.21% 3.51% 4.09% 2.02% 3.77% 3.46% 2.59% 3.42% 2.53% 3.36% 3.29% 3.35% 2.82% 5.05% 3.89% 3.32% 2.35% 4.10% 2.64% 3.78% 5.66% 4.39% 3.17% 5.30% 3.89% 3.60% 3.81% 4.58% 0221 0421 06Average 2016 2015 2014 2013 2012 Value oftaxes paidasapercentageofsalesrevenue Sector .8 .8 .5 .2 .8 2.00% 1.78% 1.42% 2.35% 2.48% 2.98% .1 .0 .1 .8 .7 2.11% 2.77% 0.38% 2.61% 2.70% 2.91% .7 .8 .1 .0 .4 2.88% 2.74% 2.70% 2.91% 3.18% 3.37% .4 .7 .7 .2 .9 4.21% 3.09% 4.22% 4.97% 4.57% 4.04% .6 .2 .7 .6 .2 5.30% 5.52% 5.36% 4.67% 5.62% 6.16% .2 .7 .8 .0 .9 2.76% 3.29% 1.80% 3.08% 2.87% 2.42% 0221 0421 2016 2015 2014 2013 2012 Petrobras, Ecopetrol, YPF andPemex. ue21 June 2017 June 2014 1.3 0.3 2.3 -7.84% -21.73% 404.430 516.735 4.5 8.1 4.%-17.1% -43.0% 83.518 146.457 Annual Revenues (*) 1.8 1.6 4.%-17.8% -44.4% 10.563 18.984 902 541-99 -15.6% -39.9% 5.411 9.002 4,0 007-55 -13.6% -35.5% 30.067 46,605 1.7 445-63 -24.1% -56.3% 4.405 10.07

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JHI1802027_SN_Latin Trade Ad_Revised Eng&Spa.indd 2 2/13/18 1:31 PM 12 OPINION LATIN TRADE L showing otherwise. acts were paraded in the public spotlight, polls are were numb to corruption, but after so many grievous democracy. Many believed that Latin American voterscellphones and social media in this new era of digital their actions and words, recorded and broadcast on political leaders have been frequently embarrassed by middle lefttoright. a spectrum of some eight candidates ranging from AMLO isthemostrecognized andlikeable candidate. his opponents are laden with greater faws than he, and to winbecauseMexico hasnosecondround ofvoting, greater government intervention. AMLO has the chance Manuel López Obrador (AMLO) but not to embrace simplistic pendulumswing. and Venezuela are allscheduled togothe polls. Brazil, Mexico, Colombia, Cuba, CostaRica, Paraguay, Venezuela Peru Colombia Mexico Brazil In Colombia, voter intention remains divided across In Mexico, voters are predicted to choose Andrés Change will come to the region but not as a 2018 provides a bold test of voter discontent as FIRSTQUARTER 2018 Country THE CONTRARIAN CONTRARIAN THE WILL VOTE FORCHANGEIN2018 the last three to four years, the region’s leading the race to the bottom at 6%. Over are dismal with Brazil’s Michel Temer approval ratings in the largest countries as usual. At the end of 2017, presidential atin Americans are fed up with politics LATIN AMERICANS Population (Millions) 128 208 32 32 49 Nicolás Maduro Pedro Pablo Kuczynski Pablo Pedro Manuel Santos Enrique Peña Nieto Michel Temer Venezuela are all scheduled to go to the polls. the to go to scheduled all are Venezuela Mexico, Colombia, Cuba, Rica, Costa Paraguay, and “ 2018 provides a bold test of voter discontent as Brazil, President consulting. a 24-year veteran of Latin American competitive intelligence and strategy right. In Brazil, the most viable candidate, Luiz Ináciobrings the most credible plan to set the economy don’t deliver, there willbehelltopay. taxes, i.e., better government. If their new presidentsstreets, more jobs, better social services, and lowerLatin Americans expect change: less corruption, safer will not be permitted by voters to gloat in their victories. Cuba’s internationalstandingandaccelerated reforms. power in Havana could lead to dramatic change in With or without democratic legitimacy, a change in Maduro would delay orcanceltheplannedelection. imprecise, and many suspected that Venezuela’s voters appear to want. In Cuba, polling is notoriously 2018 elections will produce the change that most status quo. into offce a new mix of politicians that challenge the feld and an angry electorate, a formula that could put he cannot run again for offce. That leaves open a wideimprisonment forcorruption. Ifhisappealsare denied, Lula da Silva, was sentenced in July 2017 to 10 years

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576-1394_AnYounthEmployment2017__1905x2540.indd 1 12/22/17 10:40 14 LT BOARD OF ECONOMISTS LATIN TRADE A academics Policy makers signifcant changes, there makingis for political conditionsa space, existvery the ofclose dialogue with “Whencountries decide that, from the point ofview fuctuates initsintensity. countries, communication groups two between the smallest countriesmaybe itisdifferent.” academic intellectual and community, the in while trained developed highly and a larger countries, is there “In Velasco. Andrés professor, Columbia University and Chile of Minister Finance former region, economies thefrequently big said of the in in others” inLatin America. makers and academics “in some countries more than A shiftingrelationship say the least, complicated and f uctuates the relationship between policy makers For Werner, the key variable is the political climate. climate. political the is variable key the Werner, For large in even that, agree economists two The more occur groups Exchanges two between the FIRSTQUARTER 2018 and and academics in Latin America is, to that increasing knowledge sharing at the technical level will improve this in intensity. However, it is expected eipee f h International continuousais dialogue” between the policy MonetaryFund, Alejandro of Werner, “there Hemisphere Western director the theccording for to relationship over the next decade. next the over relationship Latin Trade Board ofEconomists One thing is clear to the aes “e ou to uh n h academic the on much too focus “We makers. theinteractionto between academia andthepolicy this revolution. Data, policy.modeling each and computer of analytics consequences potential will bethe basis the of of in-depth knowledge be will there also known, but supported withamuch strongersetofinformation. country mean that decisions on public policiescompilation each according data will needs of the of be to theoreticaland developments academia the and in Universityprofessor Rossi-Hansberg. Esteban Princeton predicted technical Recent decade, next the THE RELATIONSHIP WILL INTENSIFY recommend. policymeasures are not those that academics would academia.” But in times of political tension, in general, Today,weowegreat a debt theontechnical level Notonly will the economy and its agents be better revolutionized in be will made is policy How : Alejandro Werner, InternationalMonetaryFund

Photo: Courtesy of IMF Photo: Courtesy of Columbia University rbes r, r ht a be dn t overcome to done been has problems what are, or the what about clarity lack they capable, very but deepened.mustbe “Theeconomists technicallyare good,butknowledge socialof andeconomic history training in Latin of level economists.America’s future The of training leading the universities is academics is very and makers policy betweendialogue INSIDE ACADEMIA entities incharge ofdesigningpublic policies. processofbeing transmitted toother ministries and authorities,” policy saidRossi-Hansberg. public This other technical capacity than is in the frameworks “They have had better technical staffs and conceptual important,” said Werner. more far ministries public is manytechnicians in and academics many contribution of theactually but minister, economy the to talkingcelebrities Velasco suggested another relevant the issue for hs dy, h cnrl ak cat h course. the chart banks central the days, These “Globalization has taken place in many areas but unfortunately not Andrés Velasco, ColumbiaUniversity enough inthefow ofideasand, especially, inthefow oflessons.” Andrés Velasco, Columbia University Columbia Velasco, Andrés used before. We canalways learnfrom thepast. were something requires that new responses never crisis each if continue policy cannotmakers behaving as and Academics world. the place in tooksomewhere that incident similar previous some countries rarely totally are unique. always isThere coping withthe2008crisisanditsfallout. European authorities and for US available tools to the ´80s and ´90s substantially reducedthe Latin the Americanconceptualand Asianf nancialcrises during of lessons,” said Velasco. enough in the fow of unfortunatelyideas not but areas, and, many especially, in placetaken in the fow foundindustrializedin countries. “Globalization has exclusivenot universitiesto alsoregion;theisin it them,”said the Chilean economist. Thisweakness is SANTIAGO ESPITIA REPORTED FROM BOGOTA. Esteban Rossi-Hansberg, PrincetonUniversity Thesocial, political, and economic experiences of He points out as an example how ignorance about FIRST QUARTER 2018 LT LATIN TRADE

Photo: Courtesy of Princeton University

15 16 DEBATES - STRIVING FOR GROWTH LATIN TRADE “Latin America has a problem of too much democracy.” G “First,macroeconomytheput order,in didthisweand mrcn eeomn Bn (D) te nwr s not American answer Development is (IDB), the Bank media businessmanGustavo Cisneros giveshisopinion. with issue the discuss economists Latin American vs. industrialization”.“commodities at end It’s doesn’t much America deeper Latin andfor richer, model growth and includes best the social about factors. debate Two The well known of capitalencouragingbyof trade,added.Ruiz “We need executive. crisis.” commodities the during even and formalandjobs” achieve toand better aredistribution more integrationmore region,”ownwithinour IDBthe said term. The questionthenarises:how toboostgrowth? euain i odr o eeae oml companies formal generate to order in regulations simple. “There’s no silver bullet,” he told slowannual rate 2.5%of3%,to leastat theinmedium interview, but he did say a few basic principles are clear.interview,are principles fewbasic saya did he but Itis equally necessary “togo to the micro and revise o Js Ja Ri, he eooit ih h Inter- the with economist chief Ruiz, Juan José For FIRSTQUARTER 2018 agenda to economy drive the of cases the region will thegrow at a relatively and America Latin caressing nlr cnmc id hv been have winds economic entler Caribbean since the last months of 2017. of months last the since Caribbean Evenso, analysts project thatthein best A new Latin Trade in an going to get ahead,”going toget hesaidinaninterview with carryingouthigh-impact projects exampleanis theof obstacles. world’s largest mines. It was a $200 million investment, investment, million $200 a was It mines. largest world’s emphasized the importance improving of institutions as a means of encouraging frms, brokerage investment. largest Brazil’s “Otherwise, of one Securities, we’re XP not at lcl community. local Colombia referendum recent a in A large projects that would produce bene wheref situationsts on citinga national noted, democracy,” much he latter,Bernal said. “Latin America problemhasa tooof that,althoughprinciples,goodrooted high- in havebecome for them raising necessary, if (and, low taxes suspended a mega-project for mining gold in one of the scale have been rejected by votes of very few citizens in noe anr) a wl a gtig i o procedures of rid getting as well earners), income as let Bra, he o eegn mre strategy market emerging of chief Bernal,Alberto h obligation consultThe communities local to before Thestrategist made an appeal for keeping corporate Latin Trade Alberto Bernal, XPSecurities , and in a separate interview, interview, separate a in and , LT .

Photo: Courtesy of XP Securities 18 DEBATES - STRIVING FOR GROWTH LATIN TRADE “Brazil spends 12% of its GDP on pensions, and Argentina José Juan Ruiz, IDB 10%. Wecan’t go on like this. Weneed to invest more in mrc ad h Crben n iig hydrocarbons, mining, in Caribbean the and America The region must increase its command THE LEADINGSECTORS designatesectors.” Thecomparative advantage Latinof f nls ad mrv te ult of quality improve the and English of citizens,” saidBernal. what isworth doingandwhatisnot,” hesaid. and agriculture means that those sectors will necessarily o syn ta te akt ut e h ol atr to actor only the be market must sayingthe that not haveclear and stable rules and let businessmen decide teachers, hesaid. tochoose sectors from an of fcein Washington,but I’m the sectors that drive a new economy in the region, Bernal the younger population, more in children than in senior udmna. Te educational modelfundamental. “The project. preferred the market. “The best government policy is to but the vote of fewer7,000peoplethanofparalyzedvote the but the is wrong and must be changed,”be must and wrong is said. he motn fr h rgo t rsle t pnin defcit. pension its resolve to region the for important Askedwhether theState theormarket mustde f ne

h X Scrte srtgs tik i’ js as just it’s thinks strategist Securities XP The Bernalalsobelieves thatinnovation educationin is Ruiz summarized the dilemma: “It is extremely hard FIRSTQUARTER 2018 “There’s nosilver bullet” José Juan Ruiz, chief economist with the Inter-American Development Bank Development Inter-American the with economist chief Ruiz, Juan José America’s economic growth pattern. look “We have to DAVID RAMÍREZ REPORTED FROM MIAMI. FROM REPORTED RAMÍREZ DAVID hi, Ri si.Ti rmis re vn huh the though even true remains chain,” said. This Ruiz continue to lead regional growth. “But we are also living undiversipoorlyandfedintegrated globaltheinvalue economies are today more sophisticated and consumers as medicineandtourism, heconcluded. along with other new, robust industries in services, such added. No single economic activity should drive growth, moretoward countries whichinprimarythe economy have greater purchasing power. hog a technologicalthrough a revolution; potential have we usss lnsd te nweg eooy a in as economy, knowledge the alongside subsists Canada, Australia, andNorway,” hesaid. u te eins cnme cniu t b “generally, be to continue economies region’s the but t ed t modernize, potential,” great offers to also needs it he services although that, sector large a tourism, andin It’spossible to have strong primary sector producers Latin in commodities of role the defendsBernal

Photo: Courtesy of Inter-American Development Bank

TOCUMEN INTERNACIONAL AIRPORT EXPANDS TO 54 CONTACT DOORS, TOGETHER WITH 12 NEW REMOTE POSITIONS

The Tocumen International Airport, is considered the Hub of the Americas and currently operates 34 boarding gates with an average of 400 flights per day, 82 destinations in over 35 countries in America, Europe and soon Asia. The opening of Terminal 2, will add 20 gates and 8 remote positions, for a total of 54 aircraft contact positions and 12 remote positions between both terminals

This imposing structure, with great architectural value, has a construction progress of 83 %. It is expected that, once operations begin, the capacity will be increased to serve 9 million passengers, added to the 15.6 million at the end of 2017, consequently serving 24 million passengers at all.

The new Terminal 2, measuring 650 meters long, will allow Tocumen International Airport to improve the operation of Terminal 1 by having both Terminals working together as a single, one safe and efficient airport complex. It will have innovative technology allowing a better passenger experience.

Panamá is a country with a privileged geographic position that has become one of the most important logistic centers in the region, by acting as a hub to connect and mobilize passengers through the American Continent and providing modern and efficient services that promote the country’s commerce and economy. 20 DEBATES LATIN TRADE G raw materials. materials. raw itself to move forward and overcomedemocracy. the inertiaHealso places ofpriority a an economyonf nding how thethat’sregion rights,canreinvent based technological on innovation,agenda fghtingforprogress againstinLatin America: corruption,education, entrepreneurship,and media, strengtheningin this interview property he analyzes the issues that he believes must top the FIRSTQUARTER 2018 any n ei ad netimn. ntrlbr entrepreneur, natural-bornknowledgeable A entertainment. about and the region media and in whatmainly it means to innovate in the CISNEROS USTAVO

has dedicated his life to creating businesses, businesses, creating to life his dedicated has

Photo: Courtesy of Grupo Cisneros Australia, Canada, and the United of the region must look more like Generally speaking, the countries middle class. We must aimforthat. to diversify it and strengthened the commodities, and then managed its economy, initially based on emulate. Chile was able to transformfew years. Chile remains a model to Argentine economy over the next important driver of growth for the this reason, mining will become an mining sector and I think that, for efforts to attract investment in the government is making important framework? regulatory in relation to property rights and theWhat other countries are doing well and Chileinthisrespect than Bolivia, and is on a par with PeruDominican Republic is doing better this and in all sectors. Today,must theguarantee property rights in fundamental issue is that countries than not exploiting them at all. Thecommodities intelligently is better that favors investment. Exploiting to approve a regulatory frameworkin the same mineral vein, has yet which is right next door, practicallymining investment, whileHaiti, Republic has opened the doors to 20 or 30 percent. The Dominican its per capita income, possibly by attract more investment and increaseboom – as Peru and Chile did – to taken advantage of the commodities Bolivia, for example, could have to exploit theirnatural resources. have a tremendous opportunity are rich in minerals and hydrocarbons onrawthe Caribbean materials? dependence of Latin America and What do you think of the ongoing Argentina. The Mauricio Macri The countries of the region that “Entrepreneurs must be . society’s heroes” critical thinking.) study in private schools to promote technology and guided independent funded by Rodríguez-Pastor combines note: The “Innova Schools” model opens upmany alternatives. we have internet technology, whichmust get on with very quickly, andschools in Peru. It’s a task thatRodríguez-Pastor we with private the interesting experiment of Carlos educational content. There is also infuence on helping to disseminate etc. can all have an enormous Cisneros, CarlosSlim, Telefónica, through digital initiatives. Grupo involved ineducation–forexample, private sector must become more are far below the world average. levelsThe mean lower corruption. Wecorruption. In fact, higher educationmuch more important than in the region? important to promote development What other issues do you consider nation’s judicialsystemhasworked. clear signal of repudiation. The only a few years ago, and gave a itself in a way that was unthinkableCaribbean. Brazil’s society expressedexample for Latin America and the corruption is an extraordinary in terms of the battle against like growing corruption? what will we do about problems framework are basic steps, but Property rights and a regulatory mining andenergy industries. that they must have toward the their attitude about the openness States in these issues and change DAVID RAMÍREZ REPORTED FROM MIAMI. FROM REPORTED RAMÍREZ DAVID The education issue is naturally What is happening in Brazil (Editor’s be society’s heroes. The Endeavorobstructionist. Entrepreneurs must example), and unions that are not credit (applying more technology,a betterfor job of facilitating access tolegislation, a banking sector that doesup and develop businesses, good better educated middle class to set entrepreneurship. We need a much economies oftheregion? sector be maximized in the How can the impact of the private American businessmen. if the agreement helps anyone, it for theMexican economy.is After all, issue will be worked out favorably although I am sure that the NAFTA China andthePacif c very quickly, the NAFTA debate to draw closer toMexico taking the opportunity of agreement with the FARC. I see maintains the general lines of the assuming that the next government creating animportantpeacedividend, to the private sector. I see ColombiaSebastián Piñera, who is very friendlyprices (and) with a president like invigorated by the increase in coppereconomically, and a Chile that is continues to be very well managed rights. I see that Peru has been and due to its deep respect for property battle against corruption) and also stronger from its internal process (thevery well and that Brazil will emergegood. I think that Argentina is doing and theCaribbean? largest economies of Latin America How do you see the future of the Chapter.) Grupo Cisneros as a member in its Miamihigh-impact entrepreneurship and countsnote: The Endeavor initiative stimulatesmodel doesthisvery well We have to achieve more In general the outlook seems FIRST QUARTER 2018 LT (Editor’s LATIN TRADE

21 22 OPINION LATIN TRADE I housing, education, andspecialhealthbenefts. However, communities to improve their social aconditions social dimension through by engaging with strongemployees leadership. and local Their founders’Latin visions American often fincludedrms continue to succeedmajor globally issue in with Latin America. At the same time, many purchase cars, mortgages, holidays. service-based economies, countries need citizensethical problemwho and also delays economic (oftengrowth. in aIn shantytown) our for the family.work Poverty is essential is an to provide food and a precariousto work in shelterthe informal economy with no rights;decreased. their Many of those who work havewhile no choice the total but numbers of poor worldwidenumber have of poor people is higher today thanone, in 1980 have devastating social effects, and the total the sameperiodoftime. 48 million to 61 million (10% of the totalthose population) fgures, over people living in extreme poverty2016 (30.7% rose of from the region’s total population)have increasedand, within from 168 million in 2014 Americato 186 millionand the inCaribbean) states that povertyECLAC levels(United Nations Economic CommissionDecade, for Latin the 2017 Social Panorama of Latinimprovements America by during the Latin America’s Golden this visionisoftenforgotten. The different economic crises, including the recent If we look at numbers and in spite of the FIRSTQUARTER 2018 Almost ten years later, poverty continuesprograms toof beLatin a American multinationals?be part of the Corporate Social Responsibilitythe following question: should povertyn my book, alleviation MULTILATINAS Global Latinas*, A BUSINESSISSUE? IS POVERTY published in 2009, I asked “Criseshave devastating social effects and the number of hl worldwidewhile decreased. have ethical an Poverty is problem andalsodelays economicgrowth.” poor people in Latin America is higher today than in 1980 (*) Casanova, L.2009. . EmergingMultinationals GlobalLatinas. fromLatin A merica. social problems inthe region that business leaders become part of the solutionand on what to thetheir business leaders will do.thriving region depends ongovernments, civil society,It is urgent other initiatives. fair sourcing from indigenous populations,employment, among many good environmental policies,to door it,local either and through training, microtof nance,the reduction secure of poverty. Examplestheir abound social on how impact and how they contributeSocial directly Responsibility programs need to take‘allows’ into account companies to operate. In this context,scarce commodity Corporate while it is the most needed because it Colombia, Ecuador, Argentina, andPeru. leaders inMexico, theDominicanRepublic, Venezuela, Odebrecht has been shaking governments andThe businessscandal around the Brazilian constructionAmerica. Brazil aloneaccounts for20%ofthetotallist. company Act (FCPA). Twenty-six, or 30% underof them, investigation are from Latinunder the Foreign CorruptCurrently, Practices 87 companies of those tradedmany companiesbutalsothatofgovernments in2017. in the US are scandals that have engulfed not only the reputation of growth andas ‘shock absorbers’ intimesofcrisis. [email protected] Institute, S.C. Johnson CornellCollege ofBusiness, CornellUniversity. LOURDES CASANOVA, Senior Lecturer and Director Emerging Markets Their consumption works as a domestic engine for It is time to act because the future of a cohesive and Hence, reputation is at an all-time low and trust is a On the other hand, we look back at the corruption

By Lourdes Casanova . LT

1 - 23502 - 230 - 0 - 978 ISBN . acmillan M Palgrave Photo: Cortesía de Copernion de Cortesía Photo: DIGITAL TRANSFORMATION DIGITAL Inspiring Digital transformation Latin Trade participates in the Copernion Global initiative and its Tech Pioneers award in Barcelona which recognizes outstanding leaders of tech frms.

Juan Manuel Barrionuevo, Executive President of Copernion.

here is no dispute about the importance of Digital Barrionuevo also believes it is important to create TTransformation (DT), but the term continues to links among executives of companies that are in sow doubt in executives’ minds in many companies the process of implementing their DT plans and the – mainly in traditional sectors of the economy – that disruptive startups as another way of expanding still do not know what to do or how to become digitally knowledge of the digital culture. transformed. It’s equally valuable to recognize the efforts and In this context, initiatives like that of Copernion achievements of those who contribute to DT from Global take on importance because they aim to different situations –be it knowledge, experience over disseminate knowledge of DT and reward the time, impact, or the potential of “rising stars”– as a way achievements of those who are leading innovation of inspiring leadership in digitalization. in every sector of the economy, from sports to haute Leading a new entrepreneurial culture into a 23 cuisine, and in different regions of the planet. digital transformation is an enormous challenge, said One good way to expand knowledge is through Diego Molano, currently an external consultant for discussion among leaders, from both technology frms Copernion and the former Information Technologies and traditional sectors, about their experiences and and Communications Minister of Colombia. “It’s not opportunities with DT. “The idea is that the leader just about acquiring the technology or contracting the of a milk production company hears from a sports gurus; you need to have leadership in order to adopt leader, so that he is inspired, or even learns from DT,” he added. LT his mistakes,” Juan Manuel Barrionuevo, executive president of Copernion, told Latin Trade. DAVID RAMÍREZ REPORTED FROM MIAMI.

Copernion Global is an investment company in technology and a strategic consulting frm. It works in the technology sector with startups, investors, and corporations from all over the world in creating value, understanding the digital world, obtaining capital, and mergers and acquisitions. The company integrates digital ecosystems in Europe, North America, and Latin America.

FIRST QUARTER 2018 LATIN TRADE 24 Photo: Pexels WEF SÃO PAULO LATIN TRADE P The survey doesnot provide aprecise fgure forLatin America. worldwide.years 15 within automated be could tasks job of 15% revolutions. A survey by the McKinsey numbers, consultancy massive in suggestsperhaps jobs thatat a traditionalmuch greater out speed rub than to during previous expected are economic andemerging markets attimea when robots and digitalization form a set of guidelines for companies to navigate the digital age. inclusion,knowledge, humanization.and Theyintendedare to principlesBraziliantheof pactinclude broad concepts suchas told Setas technology,” of introduction the backlash created by the manage practices to wewant committo ourselves whattowe consideroutset, the arethe best “From school. business local FIAP, a and EY Ferry, Korn EDPofBrazil,in andoneleadersof theofmovement alongside already know will arise from technology,” said Miguel10-point Setas, CEOpact “to commit our organizations to avoid problems we best practices forfostering “humanized digitalization”. the impact of the evolving technological revolution and ofpromoteSão Paulo state. Theobjective? Tothink about ways to absorb a month oncein the chic meeting resort of been Campos havedo Jordão, companies variousin the mountains of members board and CEOs young 50 of group Botanique a Hotel, the of Humanizing digitalization The initiative echoes widespread concern across Latin America a Brazil in launched recently companies pioneering Four FIRSTQUARTER 2018 rzla eeuie wn t hl pooe digital a promote revolution help humanwithface.a cushytheIn surroundings to want executives Brazilian ut humansinthedriver’sseat, say CEOs. ai Trade Latin n n interview. 10 an The in beings, argued Setas. “It will be human replacepart toof goingthe notvalue iscapabilities, it vice chairman ofKorn Ferry inSouth America. Averbach, Sergio preventable,” said be not may devastatinga impact society,on eventhough it now aware of what we should previous industrial revolutions, inbe are leaders doing to prevent keepapositive attitude. “Unlike what happened the University ofSãoPaulo (USP). said Fabio issue,” Cozman, diffcult a mechatronics a be will professor impact the at Mitigating knows which lines of production will be affected. one No concerned. disastrous. is “Everybody MITIGATING THE IMPACT ehooy il ep eeo human develop help will Technology But some top executives insist on the need to The impact on the labor market is potentially Sergio Averbach, vicechairman, Korn Ferry South America

Photo: Courtesy of Korn Ferry Photo: Courtesy of EDP o hr i sm hp. ua big wl b needed be beings hope. will Human some is there so of new professions are not yet known. “This is auspicious, machines. Atthe same time, the survey insists that 65% projectsthat45%humanof tasks willperformedbe by said. added,” he value humanbeings execute less repetitive tasks with higher chainand production processes and will allow us to let around them,” Setasadded. technological the revolution revolvecenter, must and metrics.the“Human economicat andtop beingsthe achieving at must be premier costs, reaching cutting and gains,productivity beyond go concerns The introduced for moving towards humanized digitalization. delaytechnological advances. Instead, formats mustbe said. be,” Setas will outcome the what know not do we inour organizations. Weare just getting veryour feet complexwet, but ethical questions thatdevelop we areon its own all technology.and cannot Technologycontrolconfronting control human beings. must Thesebeingsare organizations. our center of Human the at it putand said. he progressively,” adjust to have will we So,perform. yet cannot machines which tasks thinking, willbe directly linked to empathy, creativity, workand don’tthatdowecriticalto yet know of, thoseand tasks h eeuie os o cnie atmtn to attempting consider not does executive The “Wehave to preserve the essence of the human being The executive cited an Oxford University survey which “ know what theoutcomewillbe.” just getting our feet wet, but we do not confronting in our organizations. We are complex ethical questions that we are all and control human beings. These are very Miguel Setas, CEOEDP Technology cannot develop on its own process,” Setassaid. humanthebeingcenterthedecision-makingthe atof a holistic vision of technology. “We are committedresearch to putand development to help staff members acquire inthisnewfor engaging scenario,” hesaid. ‘digitalnatives’ as our kids may be. Theydigitalinmust haveskills, tools including middle-aged staff whoarenot become victims of this process. So, notthey fairshould that be trained people who havemore notdigitalized had economy,access toaccording technologytoEDP’s Setas. “It is to participatinginthisnew economy,” headded. emergingmarkets because we face enormous obstacles jobs, the minister said. “This is a veryand seriousmanage thoseproblem platforms for will be the ones that createmore than is the case we today. what The companies of consume willthat partbeprovided developfrom largeother countries much– a expand, platforms digital Brazilian Ministry ofPlanning, told growth,”Jorge Arbache, sustainable Secretary forInternational fosters Affairs knowledge theat Only growth. economic contributes “Knowledge to gap.knowledge EDUARDO MACINI REPORTED FROM SÃO PAULO. LEADERS NEED TO COMMIT THEMSELVES m t ivs in invest to frms by commitment a impliesThis Business leaders must help manage the transition to a digitalofcommoditization,erathe In globalasand the close to made be must efforts Concerted LT FIRST QUARTER 2018 Latin Trade . LATIN TRADE

25 26 WEF SÃO PAULO Photo taken from www.bahiaeconomica.br LATIN TRADE I the University ofSãoPaulo. theengineering department of expertthe Polytechnic onarti f cialintelligenceSchool of andwhich machine productionlearning in lines will be hit,” said Fabiomerely usethoseplatforms willdeepen,” Cazman, headded. an countries that develop digital between “Inequality Barros. destroyed,”platforms said being and those who newjobs, but not at the speed at which other jobs are unemployment face currentlyrates Brazil,above including countries,10%. several “Technology is creating Trade with interview an Brazil,”in like said countries he attracting emerging investment relevant for inless revolution. competitiveness, So, factors like low wages tend become ofto thanks innovations to conditions that are inherent the digital to exceptional under countries, such as textiles and footwear, are now made economist ofBradesco, aleadingBrazilian bank. Barros America. “Globalization is not what it used to be,” Latin said as such markets emerging in market for emerging markets emerging for new competition Automation is “Everybody concerned, is but one no knows exactly as importance heightened on takes issue This “Products that are usually manufactured in emerging n te nweg rvlto o te labor the on revolution knowledge the and think tank is analyzing the impact of ndigitalization São Paulo, the recently created Instituto República FIRSTQUARTER 2018 . Instituto, República’s director and former chief Octavio deBarros, Director InstitutoRepública LT Octavio de Latin T policies inadvance,” Canuto said. social importantabout those think is to itSo, risk. huge a is there yet.But ball crystal this has fnaloutcome interms ofjob creation no–one andelsewhere. Wedon’t know what will be the face,Brazil,justnothereinUS the also butin drop. likely would programs safety social to force reduced work time, contributions same thegains. At a from which might expected from come productivity Scandinavians do,” headded. and workers system economic to adapt the to the help new reality, to havea bit welike the expect workers to remain in speciguaranteef c jobs aminimum becauseincome to all. We cushion common to cannot a creationtoward of the move to have countries. Caribbean “We and director for Brazil and eight Canuto otherOtaviano Latin American donot depend especially on jobs and labor,” strengtheningand networks safety socialsaid that workers.on “Itallis about continued education EDUARDO MACINI REPORTED FROM SÃO PAULO. an economicpriority Social policies, “This is a challenge“Thisa is willthathaveallwe to Thoseproposals would costmoney, someof toaddress the impact of these processes robotization question how poses the of herelentless advance of automation and Otaviano Canuto, World Bank te ol Bn’ executive Bank’s World the , LT

Photo taken from www.wilsoncenter.org MOVING AHEAD Latin Trade ON TRADE INTEGRATION, Latin America World EconomicForum adopting technology, and will takeplaceinSãoPaulo inMarch. improving productivity the WEF’s Latin America director, MARISOL ARGUETA interviewed Marisol Argueta, about the expected results The 2018 edition of the of themeeting. Director forLatin America, World Economic Forum Economic World Marisol Argueta,

crucial role in the economic performanceninth and largest sustainable in the world, and so the country plays a Forum? the of site the as chosen Brazil was Why America. literate population will also providetoward their avision future for with Latin a more highly Youthskilled andand entrepreneursdigitally who are leadingimproving productivity, andpromoting inclusion. the change in integration, openinguptotechnology andinnovation, of its wealth in human and natural resources,modestly in advancingthe region which calls forof valuemaking for better the longuse term. Economicfuture growth guided is recovering by responsible leadershipideological and the divisions creation – paves the wayopportunity for a vision to create of the a new narrativeexpectations. that – far fromBut, the elections areelections also a greatin the next few months, and this fuels the WEF-Latin America meeting? What are the main issues on the agenda of DAVID RAMÍREZ REPORTED FROM MIAMI. FROM REPORTED RAMÍREZ DAVID dig taking advantage ofthebeneftsoffered by the social security systems will be the mosteducational successful and intraining systems, laborThe economies policies, that and are able to modernizeinequality, andmakeaquantumleap indevelopment. their that the technology serves to leverageits implications.growth, reduce The challenge is to take measures so going? 4IR the is Where intelligence –wasthecentral themeoflastyear’s Forum. on digital technology and includes roboticsThe Fourth and Industrialartifcial Revolution (4IR) – which builds potential forintegration was equally important. Pacif c Alliance-Mercosur dialogue aboutregulatory advancing restrictions, the political such asdefcientinfrastructure,risk, labor rigid markets, and corruption. The made recommendations for overcomingimproving limitations the business environment.sectors Participants to discuss how to increase productivityopportunity forby more than 1,200 leaders from all the WEF 2017meeting? What advances were achieved in the region following entrepreneurship andinnovation. Paulo is an important fnancial centerthe and global a hub economy. for In addition,results, the mega-city allowing of São the country to makerecently a better adopted f t into reforms will producedevelopment signifcant of Latin America. It is hoped that the Brazil is the largest economy in the region, and the Eight countries in the region will hold presidential There is now broad knowledge of the concept and The meetinginBuenos ital era. LT Aires was an excellent FIRST QUARTER 2018

LATIN TRADE

Photo: Courtesy of WEF WEF SÃO PAULO 27 28 STRATEGY AND EXECUTION LATIN TRADE CONFRONTING TURBULENCE WITH MOREEMPATHY AND FEWERRULES T urnl sno drco a Oracle. at director senior currently executiveKunnas, formerBCG and Boston Consulting Group, Peter and partner seniorand managing Kachaner, director Nicholas at wroteThe industry, their in disruption or change strategic important any perceive to able not usually rivals aretheir with thetransformations. up keep able beenothers have not incontrast totheir competitors, themselves distinguishand and adapt to how known havecompanies environment, some changing that of face the In behave. customers companies, which markets, andin way the radicalcaused changes in political, economic and events have hs wo ae aln behind fallen have who Those FIRSTQUARTER 2018 Andrés Cadena, McKinsey&Co of technological, social, social, technological, far-reaching of confuence A changes. made has world business he this solution seems easy, it’s not. not. it’s years, organizations For been have easy, seems solution this Although change. change, of face by consulted seen before? never developments technological with confronted consumers of behavior unpredictable and trends, disruptive swings, market constant with term, long and medium the for plan to cult f dif increasingly is it where environments in survive rm f a can ¿How convulsions intheirenvironment. the confront to execution needed capacity the or leaders, plans, companiesdonot have thestrategic words, other such In execute it. to able aren’t strategy, they a defne appropriatean strategy, they if and they are incapable of putting in place And even if they do notice new shifts, The answer, according experts to BUSINESS: Lourdes Casanova, CornellUniversity ai Trade Latin s n the in is business models and in technologicaland fexible to interpret the changes in more control butmore fexibility. theseexperts, what isneeded isnot beingeffective because, according to managementpractices have stopped changes, even best theories, the disruptive models, and and frequent increasingly and value creating to customers obstacles choices, more more more and with more markets stakeholders, face demanding must companies which in with theplan. compliance full ensured and map road the followed thatleadership thattogetpoint,andhowto under outset, the at were they where years, 20 in be to wanted company the planningmodels that de fnedwhere anchoredtorigid long term strategic “Strategies must be more adaptive environment an in However, Jorge Becerra, The BostonConsultingGroup

Photos: Courtesy of McKinsey, INSEAD and BCG

h personality, culturethe talent, and partsrelate toone another, and how instead, it’s physiology, the the how no longer the most important are elements; structure organizational require. a change in the talent that companiesimplies an organizational change and market. perfectit with the feedback then problem, from and the a solution to a f quicklynding on focus toagility sprints, and development) future for feedback provide whocustomers, frst satisfy the featuresenough to Products (developing product a with concepts the Minimumto of Viable NEW PARADIGMS The BostonConsultingGroup. of director managing and partner Becerra, late,” Jorge senior saidbut perfectly than managed well and something quickly do to betterIt’s adaptability.and versatility is needed what’s evolved. Now hasplanning paradigms. strategic process of The putting together and creating cross- creating and together putting of capable is industry and one of working, where of talent goes ways beyond knowledge integrated more tobreak down themyths andadopt havemultidisciplinary “We teams. integrate evenand include outside players where in departments ecosystemsdifferent to systems organization vertical from moved Becerra said. behavior,” (corporate) new this favor h wrd f uies has business of world The the and hierarchy “The fexibility to shift paradigm A Thisis the context that gives rise disciplinary work teams,” says Andrés andfollow anoutdated strategy, and and recruit therighttalent. fexibilityto make forand execute need theplans in rooted obstacle is reality, their biggeststrategies their into turn to companiesleading it,” sheadded. theydon’t like, they stopsupporting government something the does If governments. with relationship hate love- a have and research,own their internationalization, in little invest thatsothey caninnovate. They lack generations new the control to up give not will patriarchs who with Cornell University. oftheEmerging Markets Institute at ProfessorLourdes Casanova, director term,but they lack perspective,” said external circumstances short the in “They survive volatility their the of that obstruct their levels of execution. differentiatefactors that and them cosmopolitan vision,” says Cadena. exportingto very given has them a themselves Dedicatingcompanies. almost at the same level as the globalStates in different markets. United “They the Europe, and are Asia,from companies with todaycompeting And themultilatinas? Company inBogota. Cadena, senior partner at McKinsey & aln fr” ad eer. “When Becerra. said for,” are calling technology and market, the consumer, the changes the to adapt arenot wired internally to be able to “Theyare stuck indesign models these comesfor time theWhen “There are many family companies signifcant are thereHowever, are multilatinas large Most PILAR CALDERÓN REPORTED FROM BOGOTA. What can Latin American companies leadership models,” saidBecerra. more appropriate than the traditionalfexibility, innovation, creativity, and feminineadapting – to errorsleadership – ofare characteristics era, new the this inspires “For motivates. that and vision a together put to able ecosystem be the to in signals the appear that to tuned in is and different sources to listens authoritarian, that not oroverbearing that’s service a of intelligence,leadership emotional more collaboration.” and leadership models, people, of technology, the but challenge is it’s big in the the think dimensions we transformation digital of speakwe nbe te t invt more,” said Becerra. innovate to them enables that and lighter, legacy, is baggage less their having of advantage European the have f theyandrms, American the practices to contrast in bestand, world’s the gap with the close to determination a sector. is apart leaders same the sets What the in companies advanced less advanced and more and benefts. salaries pro ofanalysis than f of les resources which today requires more ftherm, particularly and human in digital technology areas ofof all in objectives, incorporationcareer the and able to respond to non-traditionalattract and retain which talent that is ecosystem digitalpromotes collaboration, an the ability to demands learning from mistakes. Innovation team, adaptability, experimentation, and the on value a place models changing today’scontext the to most adaptive respond leadership to corporations? learn from the most advanced h 2s cnuy edr needs leader century 21st The I Ltn mrc tee are there America Latin “In experience, BCG’s to According LT FIRST QUARTER 2018 LATIN TRADE

29 30 STRATEGY AND EXECUTION LATIN TRADE o opnae o te euto i icm, h said. he income,” in reduction the for compensate to several countries, we’ve in commissions had into learn drop like to the be ofmore adaptability. lighteff cient “In businesses regulated requires regulatory changes to Responding pensions. highly game, the in of rules particularly the in instability is objectives its alternatives, oftenby trialanderror.” out setting and strategy as direction, reviewing the muchthe so focus environment, strategic the change “We to try said. fast-changing don’t Bojanini dead,” a we’re fexibility such without “In oversight. constant demand trends new that and quicklyvery advantage. competitive “We believe incollective intelligence,” main hesaid. company’s the as rates opens up, market and larger to the Group’s a possibilities that pool of thetalent, toa factor duethat growth David Bojaninitold our positioning is beyond what we hoped for,” president recognition. LatininAmerica, brandnameSURAhighthehasand countries ten in operates it today Colombia; in only O n o te igs osals o SR i meeting in SURA for obstacles biggest the of One it’sSURAAtunderstood changingworldthethatis Bojaniniattributes the success tofactors like higher “We have achieved 110% of our expansion plans, and FIRSTQUARTER 2018 w le er ao te ru hd presence a SURA. hadTwelve Group ago, the years Grupo is plans strategic of in multilatinas execution successful most the of ne Latin Trade inaninterview. said Bojanini. needs,”society that services haveand productsto the has society,and for this it doesn’t matter if it’s big or small. It the lessonsfrom theirexperience. of their talent, the strength of their corporateenvironment. culture,For adaptability, and the they to technologies, adapt depend new reacting to faster on and the ability like them,attracting await challenges and huge keeping that knowyoung SURAtalent, quickly implementing their bestpractices insustainability. the index together with 300 others thatindex.” are recognizedFor the last for seven years, the bigcompany challenges has like beingbeen inthein Dow Jones sustainability Bojanini. competeto with them because don’t we stay still,” said thepensions sector. “We aren’t thebest but weare able head-onLatinin America withthebigglobal players in Bojanini said. algorithms,”investmentsanalyzeon to based intelligence artifcial and errors, fewer and processes agile more clients. analytics need “We them, know robotics to for fundamental for expanding to reach more than 40 million PILAR CALDERÓN REPORTED FROM BOGOTA. TECHNOLOGY FORGROWTH without fexibility “A sustainable company make itself to has useful to Grupo prospects, these managers with atEven top “Weare always watching them and we give ourselves Thanks these all of to factors, today SURA competes been has technology process, growth this In David Bojanini, president ofGrupoSURA. fast-changing LT PRESIDENT OFSURA: environment, we’re dead” “In such a DAVID BOJANINI,

Photo: Courtesy of Grupo SURA. thousands ofemployees. line, Bimbo aligns and motivates its for each country and each product that shape concrete business plans managers inthepast60years. in leadership: just three general persistence, and an enviable stabilityorganization, talent, discipline, to dealwithchange.” day by day, and have the fexibility also have tobealways onthemove, must have clear objectives, but you told director, Gabino GómezCarbajal, Grupo Bimbo’s general deputy and agilityinadjustingtochanges,” balance between long-term vision to success is to be found in the sales ofcloseto$14billion. more than 100 brands, and annual with 137,000employees, 196plants, company operating in32countries, DNA and today it is an international Bimbo was born with growth in its bread makerintheworld. However, later it would become the biggest likely that he imagined that years W Through fve-year strategies To this formula, Bimbo has added How did they do it? “The key Gabino GómezCarbajal, GrupoBimbo. Latin Trade in 1945, it’s hardly Sendra founded Bimbo hen Lorenzo Servitje in an interview. “You Gómez Carbajal said. “We have are,” we and exible, f be to have we the other hand we understand that environment is changing, but on try to do things even though the America. “We are disciplined. We environment, especially in Latin abrupt changes in the business its goals have arisen from company has faced in achieving Carbajal. human company,” said Gómez have a highly productive and totally Companies are people. Our aim is to aren’t systems, factories, orbrands. executing those plans. “Companies 32.” in up woke we went to sleep in 24 countries and American bakery) EastBaltBakeries, Carbajal. “When we bought (the outside of Mexico,” said Gómez the company’s revenues come from than a decade ago. “Today most of plan that was put forward more with the bold internationalization company – while moving ahead operation, and the quality of the of customers, the countries of of its goals – increasing the number been able to meet the vast majority The biggest obstacles the Talent has been fundamental for That’s how the company has vision andagility The Mexican also basesitssuccesson organization, talent, and Long-term found a happy medium that has participation inEur with constantly growing is notcentral totheirbusiness. included it in their procedures but it digital technology, the company has to be a leader in productivity. As for several patents, and always strive conduct their own research, have to be on the cutting edge, so they line of business, Bimbo has sought has been a factor for change. In its helped usbesuccessful.” PILAR CALDERÓN REPORTED FROM BOGOTA. with ourpeople,” hesaid. the market, withtheconsumers, things are happening. We are with out in the feld, which is where which to manage. You have to be “Offces are dangerous places from business. a grow to how about alert andopentonew alternatives.” “We are inmore andmore markets, other latitudes,” saidGómezCarbajal. discouraged by companies from leagues for a long time. “We arebeen not playing successfully in the big more than 11 years ago, Bimbo has through its investment in China A leader in the United States, A leaderintheUnitedStates, There’s no doubt that technology And the executive offers a tip FIRST QUARTER 2018 multilatina discipline. ope andin Asia, BIMBO LT

LATIN TRADE

Photo: Courtesy of Bimbo. 31 32 STRATEGY AND EXECUTION LATIN TRADE

Photo: Pexels create a very clear understanding ingredients is that you need to said. One of the essential business organically,” Mannhardt has capitalizedonopportunitiestogrow inorganically. The Brazilian giant in gas, hydrocarbons, and chemicals last year,told Ultrapar until the third quarter of Mannhardt, president and CEO entails both dimensions”, Thilo capabilities, and a road map that opportunities and execution organic andnon-organic moves, Americas. at home and chemistry across the with activities in fuel distribution largest conglomerates inBrazil, late 1930s to become one of the LPG for household use in the to expand from a distributor of T “ execution rather than just growing consistent steps towards solid At Ultrapar, “We have taken very Strategy is always a mix of ULTRAPAR’S EXPERIENCE good roadmap Patience and a FIRSTQUARTER 2018 well-crafted strategies Ultrapar has implemented he São Paulo-based Latin Trade . map forexecution,” hesaid. company to have a very clear road management and the board of the a deep understanding within of the company. You need to create long-term view of the development has to do with patience and the the board, hetold the company, the shareholders, and executive team, the leadership of and alignment between the Brazil. now has 8,000 gas stations across fuel distribution network which relevant portion of the Ipiranga move in 2007 when it acquired a begin. time to ripen before execution can them, and opportunities may take but no opportunities to realize Companies may have great ideas depend onopportunities. Ultrapar made a signifcant But those journeys normally “It has to do with alignment, it Latin Trade . THIERRY OGIER REPORTED FROM SÃO PAULO.FROM THIERRY OGIERREPORTED opportunism andpatience. 5, 10, 15years”, hesaid. along the way. Success “could take role in consolidating this market company could play an important act where the competencies of the is not yet consolidated; and then term outlook for growth and that on amarketthatofferslong- rules for solid expansion are: focus leading” businessinBrazil. business, to build a “stronger and with Chevron in the oil lubricating Ultrapar also signed a joint venture Brazil,” in he said. distribution fuel Texaco strategic move. Then we added we saw an opportunity for a major opportunity forinorganic growth, company. When we saw an Hence, demands a mix of According to Mannhardt, the Some years later, in 2016 “It was a major step for the Thilo Mannhardt, Ultrapar LT

Photo: Courtesy of Ultrapar INDEX Americas SustainabilityAward 2018 ustainable Development is codes of ethics and are showing in environment, corporate the key to improving the their strong commitment through governance, social innovation, and quality of life of everyone a variety of programs and projects, development. That index gave S rise to this prize, the Latin Trade on the planet. It results in better which involve using their own use of resources, less waste, less resources and, in many cases, the IndexAmericas Sustainability pollution, more inclusion of work of thousands of volunteers. Award which recognizes large and publicly listed companies disadvantaged populations, better The Inter-American that have contributed the most to use of technology, and more Development Bank (IDB) inclusion, environment, corporate “democratization” of knowledge. has created IndexAmericas, governance, and sustainable Companies as a driving force a compilation of over 400 development. In next pages, we in society, and in the economic indicators that evaluates the present the three fnalists in each development of countries, are concrete contributions of more category as well as in multilatinas. becoming increasingly aware of than 6,000 leading companies The winners will be announced at the sustainability issue and of the

the Annual Meeting of the IDB in 33 enormous contribution they can Mendoza, Argentina, in March. LT make in line with the goals of the United Nations 2030 Agenda. So, many companies have included those principles of sustainable development in their

FIRST QUARTER 2018 LATIN TRADE 2018 Sustainability Award

CATEGORY Environment ompanies are evaluated from several perspectives, Cincluding reduction of greenhouse gas emissions and use of toxic substances; waste management; their impact on ecosystems; and effcient use of resources, especially energy and water. The companies nominated in this category are:

aleo is a French multinational innesota Mining and ntel is the world’s largest Vauto parts supplier that MManufacturing Company is Imanufacturer of integrated partners with almost all the an American multinational that circuits.This American world’s car manufacturers. It offers manufactures and sells technologies multinational has proposed innovative systems and equipment for a variety of industries, and aggressive goals for a decrease for reducing CO2 emissions. In markets its products throughout in greenhouse gas emissions Latin America, Valeo operates in Latin America. Research and and water conservation, and has Mexico, Brazil, and Argentina, and development is an essential part of achieved a reduction of 60% in its

34 has six plants in South America. its operation. Every year, 3M invests carbon emissions. Intel has saved Valeo has committed itself to almost 6% of its sales revenues (2016 enough water to supply half a limiting the environmental impact fgures) in research and development, million American homes for a year. of all of its activities by applying and this results in the company It has also established alliances strict international standards. registering more than 3,000 patents with international organizations The company has certifed 98% annually. like the Center for Climate and of its plants according to the ISO 3M has focused its efforts on Energy Solutions, Advanced Energy 14001 standards for environmental protection of natural resources, Economy, and CDP. management systems, 94% of its with initiatives directed at water According to the European Union’s plants according to the OHSAS conservation and the reduction of (EU) Industrial R&D Investment 18001 standards for management greenhouse gases. Its “Pollution Scoreboard report, Intel was third of safety and workplace health, Prevention Pays Off” program among 2,500 companies worldwide and has given more than 50,000 prevented the company’s greenhouse for its level of investment in hours of training in environmental gas emissions by 57% between 2002 research and development in 2015- management to equipment and 2013, despite an increase in 16, with a total of US$13.7 billion. operators in all of its plants. production of 30%.

LATIN TRADE FIRST QUARTER 2018 CATEGORY Corporate Governance orporate governance includes good practices that help Ccompanies operate more effciently, attract capital, avoid corruption and poor management, and improve a company’s relationships with its stakeholders. The companies nominated in this category are:

he Dutch multinational is truly E is a highly diversifed &J is a manufacturer of medical Ta global company. Seven of Gmultinational corporation based Jdevices, pharmaceutical every 10 homes on the planet use at in the United States, with businesses products, and personal care and least one Unilever product. in domestic and industrial products, baby products, founded in 1886 in The company has more than 400 infrastructure, and fnancial services. the United States. brands in food products, beverages, GE has had a strong presence in Its operations are based on a Creed and home and personal care Latin America for more than 115 that dates back to 1943 and says, products. years. It now has 84 offces and 60 “Our primary responsibility is to

Unilever is guided by a Code manufacturing plants and service the doctors, nurses, and patients, 35 of Principles that has the goal centers spread across 31 Latin mothers and fathers, and everyone of making sustainable living a American and Caribbean countries. who uses our products and common good for all people. The nucleus of GE’s Integrity and services.” Among its commitments, Compliance Program is “The Spirit & One of the main characteristics Unilever proposes to achieve zero The Letter”, a code of conduct that of J&J’s Corporate Governance is deforestation for four of its basic advances the frm’s commitment the establishment of a Science, products – palm oil, soybeans, to integrity and compliance, Technology and Sustainability paper and cardboard, and beef – by preventing corruption and treating Committee as part of the board. It is 2020, and is dedicated to having employees fairly. Sixteen of the 17 made up of independent members, all of its plastic packaging made members of the board of directors and it is the main group responsible of recyclable materials by 2025. are independent, more than the two- for the company’s policies, The corporation has also launched thirds than were originally proposed, programs and environmental, campaigns to raise awareness and they contribute to meeting the health, safety, and sustainability about food waste. frm’s code of conduct. practices.

FIRST QUARTER 2018 LATIN TRADE 2018 Sustainability Award

CATEGORY Social Innovation he private sector plays a fundamental role in overcoming the Tregion’s lack of development in terms of growth, job creation and improvement of the quality of life of the most vulnerable communities. Many companies are active in this sphere. The companies nominated in this category are:

atura is Brazil’s leading he Companhia Energética ES is an American company Ncompany in cosmetics, Tde Minas Gerais is a leading Athat generates and distributes fragrances, and personal care. concessionaire of electricity in electricity. It is strongly committed It has distinguished itself with Brazil. It has the largest power to the development of sustainable the innovative social and socio- distribution network in South energy solutions. The global power biodiversity strategies it has America, with more than 525,000 company has begun to reduce its developed in Brazil in recent years. kilometers of power lines. Cemig portfolio of coal-based projects, Natura works with indigenous has developed new technologies and will not add any new ones in

36 communities of the Amazon for measuring consumption of the future. AES has set a goal of region (the source of its extracts electricity and facilitating the reducing its carbon footprint. for essences and other products) rational use of energy. The company Between 2012 and 2016 the and in areas close to its operations also runs social programs aimed company reduced its emissions centers. The corporation has at improving the living conditions worldwide by 15%, and is going learned to develop intense levels of in neighborhoods where Cemig for more. Over fve years ending in cooperation with local communities operates. These outreach efforts 2020 AES plans to increase power through open dialogue and include: “Integrated Social Actions” generation fueled by renewables collaboration. Together with leaders which provides medical services from 23% to 31% of total output, and local partners, Natura identifes and training to communities where and at the same time lower its coal- the development priorities of each the company operates; “To See is based production from 41% to 30%. territory and implements plans with Life” which offers ophthalmological AES is also seeking to broaden its goals. The frm ranks as number services to more than 1.2 million participation in solar and wind- 187 in the Latin Trade’s TOP500 people; and “Light for Everyone” that based projects in the 16 countries in companies of highest revenues in supplies electricity to more than 12 which it operates. Latin America. million people in rural areas.

LATIN TRADE FIRST QUARTER 2018 CATEGORY Development

he potential of collaboration by the private sector to overcome the Tchallenges of development is evident in the work of these companies. Their programs to advance social inclusion and equality, productivity, innovation, gender equality, and environmental sustainability are standouts. The companies nominated in this category are:

itigroup is a global leader elefónica is one of the world’s ccenture is a multinational Cin fnancial services and Tlargest telecommunications Acompany that provides operates in most countries of Latin companies by market cap and consulting, technological, and America. The frm has received number of clients. With a strong outsourcing services. It operates distinctions both at the global and presence in Latin America, the frm in 120 countries. Through its regional levels for its contributions stands out for its leading role in consulting and technology services, to fnancial inclusion. One of its the development of technological Accenture not only has supported initiatives, called the “$100 Billion infrastructure and expansion many sustainability initiatives, but

Environmental Finance Goal,” is of digitalization. Many of its also through its “Skills to Succeed” 37 a commitment to provide $100 investments are channelled through initiative, it has trained more than billion of fnancing for clean energy, Telefónica Foundation programs 1.7 million people to fnd work or infrastructure, and technology which in 2016 reached more than open a business. projects, with the goal of achieving fve million people, 42% of whom The company’s goal is to have more sustainable economies. In its were children. In February, Telefónica trained three million people from frst three years, the initiative has signed an agreement with the Food low-income communities by 2020, funded environmental solutions and Agriculture Organization of the with ambitious projects in Brazil. It projects totaling $53.3 billion. United Nations to improve access to also seeks to close the gender gap, Another Project, “Pathways information in rural communities. and by 2020 aims to have women to Progress” supports career It’s the fourth largest international fll 25% of its managing director development of more than 500,000 telecommunications company in positions. young people throughout the world terms of R&D investment, with Since 2011 Accenture has by 2020 with an investment of $100 almost $8 billion in 2016, according to invested $371 million in corporate million. the European Union’s Industrial R&D citizenship activities. Investment Scoreboard.

FIRST QUARTER 2018 LATIN TRADE 2018 Sustainability Award

CATEGORY Multilatinas

ome corporations founded in the region have the highest Sscores in the four categories cited above: Environment, Corporate Governance, Social Innovation, and Development. The companies nominated in this category are:

ounded in 1945, it is the largest lobant is an Argentine Tenaris is an Argentine iron and Fprivate bank in Latin America. Gtechnology company and steel company that operates Itaú has 60 million customers and the frst Latin American software in 25 countries. The company is the only banking entity that developer to be listed in the United invests heavily in R&D ($454 has been listed in the Dow Jones States. Globant is committed to million between 2012 and 2016), World Sustainability Index since its innovation, and not only does it has its own training center creation in 1999, and has remained encourage this among its 5,600 called TenarisUniversity, and in the index ever since. Through employees but also in various develops social programs in the

38 the Itaú Foundation, the bank community projects. communities where it operates. develops various initiatives aimed at The company’s TesteAR program, During the four years prior to 2016, promoting reading and the plastic designed to assist at-risk youth, Tenaris channeled $85.9 million to arts, develops free online courses in provides technology training to community projects. The frm also fnancial education for entrepreneurs, help them fnd work. Through puts special emphasis on caring for and grants prizes in literature and its Laboratoria program, Globant the environment. the visual arts. Itaú supports the helps young, low-income women As a result, since 2004 the frm Cubo Project in São Paulo, a space for with potential for developing reduced its electrical consumption start-ups and collaboration in digital engineering and technology per ton of product by 22%, and gas entrepreneurship. It is an “incubator” projects. The Globant Teacher’s Club consumption fell 20%. Globant of fntech and works with Sinergia encourages the frm’s personnel projects it will reduce consumption CoWork to offer digital solutions for to volunteer their skills so they of electricity by another 10% and of small- and medium-sized businesses. can spread their knowledge in the natural gas by 15% to reduce CO2 Since 1995, the bank has offered the communities in which the company emissions by more than 300,000 Itaú-Unicef prize for comprehensive operates. tons per year. education.

WITH INFORMATION FROM: VICTORIA GALEANO, CEO OF PRISSMA, A CONSULTING AND FINANCE COMPANY FOR SUSTAINABLE PROJECTS.

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LATIN TRADE FIRST QUARTER 2018 CONFIDENCE,

I INNOVATIO improve,” headded. next few years as the region’s economy continues to America are expected to remain steady over the opportunity for business aviation. Deliveries in Latin Trade Bombardier Business Aircraft told analytics and customer insights with Thomas Fissellier, director of market continue togrow incomingyears,” private aviation in Latin America will billion. US$18 at valued America will receive 650 deliveries decade, the company expects Latin 80% of the regional feet. Over the Mexico,next and Venezuela account forfor businessaircraft, and Argentina,over Brazil, that expansion is “a good opportunity for global an industry research frm. The research concludedbuoyant inBrazil, according toResearch &Markets, Asia-Pacifc, and this aircraft segment is especiallyor helicopters, are strong in the region compared to slightly more than the world average. increase by 5.6%annually over thenext two decades, 5.1% annually and foresees intra-regional traffc will 2036 for the region predicts overall traf fc growth of company’s Commercial Aircraft MarketForecast 2017- in both the business and commercial sectors. The INNOVATE TO GROW fy Latin American skies “Bombardier is confdent that The region is the world’s third largest market Sales anduseofcivil aviation “rotary wing” aircraft, Innovation is driving strong growth in deliveries aircraft inLatin America. executives con fdent about the future of private orders and customer-focused innovation make n the offces of Bombardier Business Aircraft, new . “Latin America represents a tremendous Latin

Gulfstream G600 there willbearobust marketagain oneday.” America a similar amount of time, but I’m confdent regional fnancial diffculties. It will likely take Latin close to a decade to begin recovering from their consultancy. Foley Associates, a Sparta, New Jersey-based aviationof business jets,” said Brian Foley, presidentbusiness of Brian models emerging to spur increased utilization and owners keep their aircraft longer, there are new according tonews reports. Europe, or Moscow to Paulo São as such routes 6,450 nm/11,945 km allows it to fy intercontinental certifcation in Brazil. The craft’s ultra-long rangeused largeof cabin business jets, and its 8X received are offering high-speed internet service in cabin, as well manufacturers) tosetupthebaseservicethisregion.” aircraft manufacturers and OEMs (original equipment JEFF ZBAR REPORTED FROM MIAMI. “It’s important to note that it has taken Europe “While the new jet buying spree has cooled off Innovations continue to ply the skies. Manufacturers as wider, more amenity-rich interiors that feature in the region and are Brazil’s most widely larger galleys, more comfortable seating, attractive fooring options, and an overall MARKET LEADERS Dassault Falcon jets are market leaders intelligent ergonomic design, as described by Bombardier in its 2017 customers,” saidoneexecutive. top priority for our business aircraft press release announcing the Global 5000 andGlobal6000businessjet. High-speed internet access “is a FIRST QUARTER 2018 N LT LATIN TRADE

Photo: Courtesy of Bombardier and Gulfstream 41 OPINION COMPANIES THAT LEAD IN SOCIETAL IMPACT REAP FINANCIAL BENEFITS

By Jorge Becerra

ompanies that outperform in industry-relevant Besides, top performers in certain ESG topics environmental, social, and governance (ESG) had margins that were up to 12.4 percentage points Careas boast higher valuation multiples such higher, all else being equal, than those of the median as price-to-earnings ratios, and proft margins, all performers in their sector. other factors being equal, than those with weaker BCG’s fndings refect the value of focusing on TSI. performance in those areas. This is the main conclusion Companies that take actions to maximize positive of one of the BCG’s latest reports, titled “Total Societal societal impact can reduce the risk of signifcant Impact: A New Lens for Strategy”. negative events (such as manufacturing accidents) The research comes out as companies and open up powerful new opportunities. Photo: Courtesy of BCG. are being urged to pay closer attention The opportunities include tapping to their overall role in society. In into new markets, cutting costs by this environment, companies reducing waste, and building a should factor what The Boston more inclusive –and reliable– Consulting Group calls “Total supply chain. Societal Impact” (TSI) into Furthermore, BCG’s their corporate strategies. TSI research identifes eight key is the total beneft to society success factors that can help from a company’s products, companies improve both their services, operations, core societal impact and fnancial capabilities, and activities. performance. They are: choose TSI is the aggregate of all a small and distinctive set of the ways in which a company TSI themes; develop a cohesive

42 impacts society—and currently no narrative to explain how TSI is part single metric captures that. However, of the core business strategy; select a performance in important ESG limited number of high-priority areas is a good starting point for Jorge Becerra, senior partner & managing director BCG. initiatives within each TSI area understanding a company’s TSI— that are integrated with and providing a concrete way to assess the link between a driven by business units; build deep relationships company’s TSI and its fnancial performance. with other organizations in order to create large-scale, The report examines companies in four industries: high-impact initiatives; set clear goals; engage directly consumer packaged goods, biopharmaceuticals, oil with key stakeholders; communicate to investors; and gas, and retail and commercial banking. In each and ensure the TSI effort is supported by the right of those groups, top performers in specifc ESG topics management structure, governance, and incentives. LT enjoyed valuation multiples that were 3% to 19% higher, all else being equal, than those of the median JORGE BECERRA, senior partner and managing director, performers in their same sector. The Boston Consulting Group.

LATIN TRADE FIRST QUARTER 2018 P

PriceSmart, Liebherr, and Kuehne +Nagel. Lacoste, FedEx, Grainger, PepsiCo, BASF, Damco, operate inPanama Pacifco includingDell, 3M, Large multinational corporations already master developer under a40-year contract. Regional & Panama, which acts as the sole (the Panama Pacifco Agency), and London the area have support from the government partnership model ensure that companies in The master plan and the area’s public-private Isthmus Railway. hub, thePan-American highway, andthe Trans- Panama Canal, important ports, a major airport transportation network comprised of the thanks to its proximity to an interconnected a strategic centerforconductingbusiness, midst of a 3,459-acre ecosystem. The zone is More than 280 companies operate in the the peoplewholive andwork there. for corporate growth and comfortable living for by focusing in sustainability, and opportunities zones in the region. The area is distinguished the bestindustrial, Panama Pacifco is widely recognized as one of offce operations. call centers, shared service centers and back manufacturing, and other activities including logistics, maritime and air services, high-tech attract a variety of companies engaged in a unique operating and labor environment co f Paci Panama incentives, customized services, and offerings of a strategic location, special use Special Economic Zone. The Zone’s a nama Pacifco is an innovative mixed- a megaproject intheheartof Americas

commercial and residential MAIN ADVANTAGES PANAMA PACIFICO OFFERSINVESTORS services provided by the procedures, and the important streamlined government ad Gutiérrez highlighted the tax in Central America. dynamic logistics companies Logistics, one of the most Manager for Grupo TLA Luis Carlos Gutiérrez, Country were the best for us,” said the Panama Pacifco benefts we ended up deciding that potential distributioncenters, “After analyzing many Direct andindirect taxincentives. Class A warehouses andoffcesinahighlysecure environment. clustering. A business environment that encourages networking and construction projects. Flexible rules and support for expansions and built-to-suit merchandisenationalized withoutimportorexportrestrictions. non- and nationalized of storage for service customs 24/7 workers. skilled hiring for Special immigration and labor regulations that guarantee fexibility operations. handles procedures of 17 government agencies on site,One-stop facilitating shop for offcial paperwork, a unique entity that vantages of the area and

w “Looking toward the future, concluded. and regionally,” Gutiérrez that we have, both locally more due to the opportunities potential outofouractivity.” has helped us get maximum in the area are agile, and this said. “The off cial procedures win for strategic partners,” he favorable relationship, awin- Panama. “It has been a very landlord, London &Regional e see ourselves growing FIRST QUARTER 2018 OPINION EXPRESS LT

LATIN TRADE

Photo: Courtesy of Panama Pacifco 43 44 LOGISTICS LATIN TRADE

Photos: Courtesy of Copa Withinvestmentan $800ofmillion, themaster planis PANAMA oue Itrainl Airport International Tocumen lsn i o is ol o expand million capacity to goal 25 its toclosing on in opttvns, si Cro Dby the Duboy, Carloscompetitiveness,” said for and economy, nation’s the of will be transported between the two norgn eooi got and growth economic encouraging airport’s General Manager. hub of the Americas.the ofnew hubhavewill20 T2 emnl T) o osldt Tcmn s the consolidate Tocumen as to (T1)terminal that will soon allow the facilities to service fights to Asia. emnl s ia fr diversifcation for vital is terminal terminals. coe ad il e once wt te existing the with connected be will and October ag Lgsis oe s en bit ih n initial an with built being is Zone Logistics Cargo passengers peryearpassengers by 2025. o feig n mngn baggage. managing and fueling for oe hn ,0 sicss e hour per suitcases 7,200 than More systems new and platformsboarding import,high-valuein-transitexport,forandandport investment of $11.7 million. It is designed to serve as an T Te osrcin f h new the of construction “The h nw emnl T) il pn o bsns in business for open will (T2) terminal new The n diin o h nw emnl te Multi-Modal the terminal, new the to addition In FIRSTQUARTER 2018 and works ofthenew terminal(back) Panama’s Tocumen International Airport Americas Europe, and Panama City’s Tocumen hegateway to more than 80 destinations in the nentoa Arot s n n expansion fever anInternational in Airport is

his ewe mrtm ad i tasot “The transport. companies air that set upin this zone, andwhich islocated in maritime between chains we posted in 2017,” said Copa’s executive president, president, executive Copa’s said 2017,” in posted we as possible. h airport’sthe labor, terminal, tax, cargo enjoy and will perishable merchandise that must be moved as rapidly Pedro Heilbron. Heilbron. Pedro in2018 wewill consolidate andstrengthen thegrowth immigration benefts,” saidDuboy. SYNERGIES

feet,bigger,“With effcient a more and modern more hs il ae t osbe o eeo value-added develop to possible it make will This o Copa, Panama’sFor fagship airline, expansion the

f oue n dut ersns great a represents doubt no Tocumen of other existing destinations. and Barbados – and increase frequency to Salvador de Bahía and Fortaleza in Brazil, in Fortaleza and Bahía de Salvador heads for heads opportunity. os oe tre e dsiain – destinations new three open jobs, o osldt te onr a the as country the consolidate to of more than$500million. oitc hb f h Aeia, the Americas, the of hub logistics one Embraer – with an investmentanwith Embraer one– iln wl icroae n 08 six 2018 incorporate in will airline newandaircraftMAX737 71f ve – etn i sn wt te efforts the with sync in Getting oa il lo rae 0 new 800 create also will Copa the skies heads for heads the skies Renderimage ofthefuture Terminal 2of Tocumen International Airport The logistics will make this easier, reducing operators with wide-body aircraft will open of millionsofwebdollarsour site,ofinyearour per –in without having to pass through the United States, again up possibilities for exporting from Panama.fromexporting for possibilities up 2016. This year the number is expected to rise to 14.4 to2016.expectedrise numberistotheyear This andwillaim growthfora rate higher thanthe rate9% and in technology for our own operations, devices, own our for technology mobile in and and phones cellular for app achieved lastyear. cient and to maintainefmoretoourf cientand million.Copa will close 2018 with faeet of106 aircraft morethan13.5million passengers, 7.1%morethanin timeand costs. Something similar will apply to courier the investment is high in order to be they are background operations, but because doesn’t see public the that reducing time and costs. and time reducing Europe to directly fies now Courier Copa services. said Heilbron. such as assigningassuchaircraftandgates to position as leaders at a global level,”global a at leaders as position EXPORT FACILITIES agg hnln. hs ae things are These handling. baggage n 2 onre, e de. n 07 h arie carried airline the 2017 In added. countries, he 32 in “We continue to invest in technology – several dozens s o cro te ria o European of arrival cargo, the for As The network of routes will connect to 78 destinations Álvarez, theairline’s seniordirector ofCargo. AND DARMA ZAMBRANA FROM PANAMA. PILAR CALDERÓN REPORTED FROM BOGOTA of CopaAirlinesof withPanama’s logistics platforma as company’sservice line dedicated tologistics and cargo and improve the procedures of Copa Airlines Cargo, the agreementQuantumIDwith Technologies optimizeto transitpoint for merchandise in the region,” said Jaime transport. “This alliance forms part of the commitment the mostimportantairhubsoncontinent. Through this Alliance, Copa Airlines Cargo will optimize Thisyear, airlinethestrategicsigned a cooperation sales and reservations of space while at the same ie mrvn cpct ad operations and capacity improving time objectives, it will be consolidated as one of air thecompleteredesign theof is other pc. ne aaa civs hs two achieves Panama thesespace. Once osrcin f tid uwy n the and runway third a construction of aaeet Ti ui o te airline the of unitmanagement. This eoatc idsr. n i the is One industry. aeronautics urnl mvs n vrg o 30,000currently average of moves an bottleneck in the growth of Panama’s tons ofmailandcargo every year. ean f h cuty s o vi a avoid to is country the ifremain thinks that two must-dotwoinitiativesthinksthat at te iln’ president airline’s the signif cant, Although Copa’s growth has been FIRST QUARTER 2018 LT LATIN TRADE

Photo: Courtesy of Tocumen International Airport.

45 46 Photo: Courtesy of Intercoastal. LOGISTICS LATIN TRADE T world to the PANAMA From expand and consolidate or broaden their investments. their broaden or consolidate and expand to platform logistics this from services their offer to have used companies of dozens that opportunities new opened have airport Tocumen the and FIRSTQUARTER 2018 he business of logistics is in Panama’s DNA. Because of its its of Because DNA. Panama’s in is logistics of business he and continents. The recent expansions of the Panama Canal Canal Panama oceans the of between expansions recent merchandise The continents. of and ow f the of epicenter the been always has isthmus the location, geographic privileged

Jetty Facility (Minera Panama). Builtby Intercoastal. repair services for ships. ships. for services repair day;and the shipyard inColón offers maintenance and Free TradeZone– offers personalized service 24hours a Colon the chain capacity cold which in has – service storage The authorities. with dealings in crew the supports and agency represents shipping the ship The in port ships. cargo by Pacifside,c providing the services needed on Balboa, and Cristóbal,of Caribbean,the in has operatingpointsportsthein service launch small multi-purpose The sea. and land, air, by world the of part any from andmerchandise to Trade told offce, Control Marketing the Venezuela, in Panamaand chainMiami, Francisco logistics Noffra, with complete a offer to independentsas coordinatedarebut way assuch ain organization made up of fve business units which work h tasot gny moves agency transport The n sc cmay s apra Group, Marpormad is company such One . Latin an for more than acentury. s cne fr ulig hp ls ta 5 fe long. feet 55 thancompanyprovincesTheexpandtheintoplansalsoto less ships building for center frst n 08 apra Gop il tr u Panama’s up start will Group Marpormad 2018 In Berthing and mooring system at the south wharf of Chevron for hydrocarbon f oa dl oo n Ciiu. Tee r many Chiriqui. are “There Toro and del Bocas of tankers designed andbuiltby Intercoastal inBahiaLasMinas, Colon, Panama. has had a prominent presence in Latin America oeta cins n h itro o the of interior the in clients potential recentacquisition, Hamburg Süd,which onr wo o’ ko aot our about know don’t who country uies ih ht ru ad its and Group that with business evcs ad h transportservices, agency the and f ark ru, t combines its Group, Maersk it of for groundfortravel offerthatweis thecontinent’s ports. Anaf fliate a good opportunity,” said Noffra. onre, n cvr ms of most coverscountries, and cargo transport services 29 in rwh rset are prospects growth threeyears in business, offers with which, SeaLand is hub logistics the by maximized nte cmay whose company Another FIRST QUARTER 2018 LATIN TRADE

47 48 LOGISTICS LATIN TRADE

Photo: Courtesy of Sealand. evc fr hc Pnm’ lgsis u i essential. The development is hub of quays logistics Panama’sand ports which requires for enormousservice temperature, of (control chain humidity, anddisconnectionperiods),” cold headded. a requires that offers a high level of reliability in the protection of cargoallows which the client RCM, to track called refrigerated system, management cargo.container “This system who madereservations in2017didsoelectronically. cargo.”SeaLand’sthespaceforof 95% clients Closeto transport,container shipper reserve to wants the and “Theclient can locate routes, get a quote for the type of their homeoroffce, 24/7. mobileapps, clients may manage their shipments from all oftheCaribbean, CostaRicaand Venezuela.” operations,we also supervise commercial execution for Ariel Frías Ducoudray, chief ofonlinesalesforSeaLand. EcuadorwiththeEastCoast theUnited of States,” said we connect shipments from countries like Chile, involvesPeru, Panama or directly orindirectly, and itisthe way “Alarge parttheofportfolio servicesof ourinnetwork DIGITAL ADVANCES aie niern ad osrcin s another is construction and engineering Marine Enormous structures remote a of launch the was 2017 in milestone A “It’s a unique service,” Frías Ducoudray told Fromthewww.sealand.com websiteandSeaLand’s “From Panama we not only manage the shipping line SeaLand. of development the for essential is Panama FIRSTQUARTER 2018 Latin Trade . theconstruction theofquay super structure for “super simultaneously– barges andPanamax-type and ships hydrocarbons transfer for quay–a service designed to Intercoastal are the Melones Terminal on the Pacifc side with automaticcontainercarriersinLatin America. internationalterminal the of Manzanillo and concentrate houses copper the frst system and of cranescoal transferring Central for Americaminerals terminal in The construction out. for stand Colon Minerain port line Panamácruise the of of construction the frst maritime PanamathePortCompanytheof and 10 and quays 6 interview). advantages facilities, (see great Canal offers the with companies that has been based in in Panama since 1995. region’s leading the of Intercoastal one Marine, with they case needed. where the That’s are they where from to made movedare be must that structures AND PILARCALDERÓN FROM BOGOTA. MARLENE TESTA REPORTED FROM PANAMA CITY cannot ignore thePanama Canal.” Marportmadof said: companyA thatwants developto many possibilities offered by the logistics hub. As Noffra Balboa. of Port the expansion of the in Panamax” shipspost te euly miiu poet crid u by out carried projects ambitious equally Other Intercoastal, for developed projects the Among combined hub, air Tocumen the Intercoastal For hs tre opne ae la eape o the of examples clear are companies threeThese Maneuvering aSeaLandcontaineratdock. LT “WE ARE PIONEERS IN PANAMA piping andarrivals wharf. of engineeringprocess. and construction of a terminalexpansion dedicatedthe toWe hydrocarbons, areof working onwith a projecttwo docking for placeschallenges VOPAK, and the in meet entirethe terminal to locatedOn which projects isIntercoastalworking onnow? atable Bahia labe Minas, to Colon. It includes developmentdepartment water. machinery the in Toinvesting do this, we haveconsidered programmed have We the purchase of a second Jack-up Whatlift investments platform do youthat have will planned enable for the nearus future?to operate that demandimmediatesolution. in deep In addition,prices. market the internationalcompetitive at cargo the airreceive terminalshould we providescanal the of side the which potential on and port forwhich reactingchoose quickly to emergency requirements point,largetheandsupplyportinfrastructure, of together newwiththecanalexpansion, haveenabled to us Forlargethevolumes structures of thatmanagewemaritimein construction, portsthearenaturalthe entry How hasthePanamanian logisticsplatform contributed tothegrowth ofyour company? optimize installationtimesandimprove thework programs. to enabled us dimensions, this fnal their and structures steel in and piles anotherDominicaninprojecttheand in Republic. cases, bothmovedInwe construction of a cargo quay for loading copper and unloading coal in Panama, upto210feet andweights ofupto100 tons). Weused that technology inthe (lengths projectCaribbean size f ofnal moving structures steel of piles and the Panama and pioneers in be technologies to enabled have thatNew us What innovations have you developed? with portsintheregion formanagementandstorage ofcargo. developed in Europe and Asia. This has forced us for to develop timespurchase strategic the and optimize alliancesmovement toof the logistics various parts in management continuousof the projects need whichWe are usually What are your plansforgrowth inPanama andtheregion? AND THE CARIBBEAN” discusses alliances, innovation, andinvestments. Miguel Andrés Lohse, corporate constructionmanager, Intercoastal Marine: MOTI, thehydrocarbons terminalofMelones, builtby Intercoastal. LT Miguel Andrés Lohse, corporate Marine Inc. construction manager, Intercoastal FIRST QUARTER 2018 LATIN TRADE

Photos: Courtesy of Intercoastal.

49 BUENOS AIRES

URBANTRANSFORMATION TAKES ON A NEW AIR t Muvin, a bike shop in the wealthy Palermo “It’s become fashionable,” says Agustín Ávalos, 24, district of Buenos Aires, sales have boomed a salesman at the shop who says he can cut through ever since it opened fve years ago. The traffc to his flm school in half the time it would take Argentine capital had started building bike by bus. Alanes, surpassing 110 miles by now, and increasing For porteños, as the residents of the port city are numbers of people opted for cycling as a cheap, healthy, known, getting around is a hassle. Traffc swells on and quick way to get around. weekdays when people from the suburbs swarm in for work, doubling the 3.1 million population to 6 million people. To reduce congestion, the city government is encouraging people to leave their cars at home. Also, sidewalks have been widened, more streets pedestrianized, and bikes can be borrowed for free. And the subway is being expanded, as well as the Metrobus, a transportation system of dedicated bus lanes. Photo: Shutterstock 50

Puerto Madero

LATIN TRADE FIRST QUARTER 2018 A huge infrastructure project is also standards similar to those found in other neighborhoods. The underway that will transform the circulation city municipal government has begun to pave streets, build of trucks and cargo in downtown Buenos parks, and equip those areas with electricity, sewerage, and Aires from next year. The city is investing water services, all in consultation with the residents who, as $650 million to speed up the movement mayor Horacio Rodríguez Larreta says, know best “what the of goods and passengers in and out of the priorities are”. port and bus terminal by running them Upgrading living conditions in slums may reduce crime, largely unnoticed through a 4.3-mile- which has risen in part because of the advance of drug cartels in long underground highway right through the shantytowns in recent years. downtown and the wealthy Puerto Madero “The perception of insecurity is very high today,” says district. This project will ease traffc and University of Buenos Aires social sciences professor Mercedes create new parks. Calzado, author of “Inseguros” (“Unsafe”), a book about urban Another important project is an crime. “The feeling is that if you get on the bus, your cell phone underground downtown hub that will could get stolen.” interconnect four commuter train terminals. Two years ago, the city government created a new police force, scrapping the previous structure run by the federal URBANIZING SLUMS authorities. The new law enforcement agency can now The transport revamp is perhaps the most implement its own initiatives which focus on offcer training visible sign of Buenos Aires’ transformation. and incorporating technology into operations, including But the city is also becoming greener and more installing more security cameras and setting up big data sustainable. Recycling bins dot the sidewalks; platforms that can pinpoint hotspots for theft. Instead of supermarkets no longer offer free plastic bags, carrying out administrative duties, more police offcers are being some parks and plazas once run down are deployed to patrol the streets. being fxed up, and huge water works have A survey by the Torcuato Di Tella University’s Research ended chronic fooding in some areas. Also, the Laboratory on Crime, Institutions, and Policies, shows that in poorer southern suburbs, long overlooked, has December last year 26.7% of the city’s households said they were been spruced up and will host the Summer victims of a crime during the previous 12 months. That’s up from Youth Olympic Games in October this year. 25.2% a year earlier – and down from 28.6% in December 2015. Another radical change is the launch of With the new police force, Calzado is confdent that “sooner urbanization of the slums to upgrade them to or later, there will be improvements in security.” LT

Charles Newbery reported from Buenos Aires. 51

FIRST QUARTER 2018 LATIN TRADE 52 LUXURY LATIN TRADE LUXURY AUTOMOBILES E carbon f ber is available in the i8 and 7 series vehicles. vehicles. observes closely what Latin Americans seek in electrif cation, and a greater use of carbon f ber more fuel effcient, and cheaper than traditional to makebodiesandchassis stronger, lighter, the latestvehicles. Buyers inMiamiwant high- told steel oraluminum products, Shack said. Already, series ofsportier, more powerful vehicles. General Manager with Braman BMW of Miami performance vehicles, especially the brand’s M Braman is among the top 20 automobile retailers in the US, and its Miami luxury dealership Prized features include hybrids and FIRSTQUARTER 2018 Latin Trade up to traditional gas-powered models in lectric-powered vehicles are catching popularity andfunctionality, Alex Shack, . technology Piloting the s well o well 48-volt main electrical system that allows coasting with its engine switchedcoasting withitsengine offanddrivetrain decoupled, company is also developing fuel cell technology, e-fuels, and more customers with individual premium mobility that copes with the will beelectriccars. electric onthepathtosustainability. an extended start-stop mode, and a high level of brake energy and climate change, Oliver Scharfenberg, spokesman sales & marketing with Audi AG saidinaninterview with this year the Audi e-tron, its f rst electric battery SUV. The recuperation. Such sustainable products and services provide sustainable combustion engines. By 2025, a third of Audi vehicles pressing challenges of the future such as scarcity of resources A In terms of alternative drivetrain technology, Audi will launch Meanwhile, luxury is going udi’s A8 “mild hybrid” features a f

Latin Trade AUDI A8 . Detalle sistemaaudio Bang &Olufsendel Audi A8 Today’s luxury cars are modern marvels. Combining creature comforts and the latest technological advancements, vehicles today excite the senses and deliver unparalleled driving experiences.

Six-cylinder gas motor in BMW M3

“BMW wants to have all their factories capable of producing “semi-autonomous” features, said Sam Pakarati, combustion or hybrid electric/combustion engines,” said Shack, General Manager with Audi West Palm Beach, noting that the automaker will soon have 10 new models coming north of Miami. Semi-autonomous driving still onstream. “They are very committed to having owners experience requires the driver to be involved in driving and more than just sitting behind the wheel. It’s about engaging the keep attention on the road. driver. 2018 is going to be huge for BMW. The future for BMW is In contrast, “the A8 is the frst fully right now.” autonomous vehicle that allows drivers to take AUTONOMOUS VEHICLES their hands off the wheel completely while Another innovation now beginning to show up in new models certain safety functions are engaged at certain is self-driving cars. For BMW, that means “entering into a new age”, levels of speed,” he said. one which the company’s engineers have been advocating for the Innovation isn’t exclusive to luxury sedans. last 30 years. The luxury segment is experiencing a trend Audi is already part of the trend. toward SUV models throughout the Americas. In South America, Audi’s A3 line was among the Audi’s A8 was developed for highly automated driving, said top sellers and the Q5 is among Audi’s top four Scharfenberg. In traffc jams on the highway, it can take control most popular models sold in the third quarter of at speeds up to about 40 miles per hour, allowing the driver to be 2017. LT otherwise occupied. This innovation goes beyond vehicles offering

JEFF ZBAR REPORTED FROM MIAMI. 53

BMW M3 Photos: Courtesy of Audi and BMW. Audi Photos: Courtesy of

Detalle sistema audio Bang & Olufsen del Audi A8 FIRST QUARTER 2018 LATIN TRADE EVENTS CFO FORUM LIMA Úrsula Haaker Ramírez, Bank of America Merrill Lynch; Francisco Barúa, UNACEM; Jean Paul Antelo, Bank of America Merrill Lynch

RISK MANAGEMENT It is a basic skill required of any CFO today. Increasingly, the CFO must take the lead in measuring and helping to manage other risks such as data security, integrity of the executives, and even the company’s reputation.

Santiago Gutiérrez, Editora Latin Trade; José I. Jaramillo Vallejo, Red de Energía Adrián Armas, chief economist, del Perú; María del Carmen Jaramillo, Grupo Gloria; Alfredo Elespuru, Grupo Gloria; Banco Central de Reserva del Perú Noemie Heuland, SAP

To embrace the digital transformation, it is necessary to set up mechanisms for collaboration both

54 CFOs are tracking closely the within the company advance of digital and with suppliers

Patricia Gastelumendi, CFO, and customers. Orihuela Photos: José transformation in Eleonora Silva, CAF Peru Ferreycorp their industries. A small percentage of them have budgets and plans for taking advantage of the changes brought by digitilization.

Elizabeth Vega and Renato Reyes, Ripley Juan Carlos Puyo, Chubb

LATIN TRADE FIRST QUARTER 2018 DIGITAL TRANSFORMATION Digital transformation is a requirement if frms are to survive today. Changes must be made in business models, operations, talent sourcing, and training. CFO That’s the main message coming from fnancial FORUM MIAMI executives of large companies operating in Latin America who gathered at the CFO Miami Forum, held in Miami in November 2017.

Elías Tavarez, Lala US; Liba Saiovici, Bank of America Merrill Lynch; María Lourdes Gallo, Americas Society/Council of the Americas; Photos: Gort Productions Moisés Vidal, Bank of America Merrill Lynch Jaime Ardila, Hawksbill Group

Alex Michiels, Ryder System, Inc.; Virgilio Penso, Teva Anthony Coletta, SAP; Alex Sotelo, Open Education; Pharmaceutical Industries; Ubaldo López, Hewlett-Packard Carlos Mercuriali, SAP Ariba Antonio Gándara, Revlon 55 Many companies seem to be aware of the importance of DT, but still fear it can call for costly changes. In fact, inadequate goal-setting and planning may lead to failure.

Fernando Fernández, Discovery Networks; Mauro Echeverri, Wilda Segovia-Lindquist, Discovery Networks; Swarovski Consuelo Van Ess, Emerson DT involves changing the workplace culture. The challenges for today’s CFO can be daunting, as the process of transformation may demand they be able Eduardo Argüello, Bank of America Merrill Lynch; Noemie Heuland, SAP; to act as accountants, engineers, and psychologists Alejandro Ubeira, DHL; Richard Smernoff, Hamburg Süd simultaneously.

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