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Latin America benefits from Canadian presence

07/19/2007 - Panama

Canada has a long-standing tradition of peacekeeping efforts and concern for world affairs. While Afghanistan stands today as the single largest beneficiary of Canadian foreign aid and expenditure, Canada also has a key role to play in the western hemisphere.

This is the message that Prime Minister Stephen Harper is delivering in Colombia, Chile, Barbados and Haiti. A couple of weeks later, he will welcome his NAFTA counterparts, President George Bush and President Felipe Calderon, to the third leaders summit of North America.

The Canadian government wants to play an even stronger role in the region. In doing so, Harper has made it clear that Canada's interests do not end at the 49th parallel.

Canada's most powerful tool to increase its presence and influence in the region has been its willingness to trade. To many it comes as a surprise that in addition to the trilateral free trade agreement with the United States and Mexico, Canada has bilateral free trade agreements with Chile and Costa Rica and is looking forward to finalizing negotiations with Central America (El Salvador, Guatemala, Honduras and Nicaragua).

Plans to initiate trade negotiations with other countries include Colombia, Peru, the Dominican Republic and other nations in the Caribbean. Excluding the U.S. and Mexico, the estimated value of trade between Canada and Latin America and the Caribbean was approximately $19 billion in 2006, growing 20 per cent from the previous year.

In a world where countries experience strong competitive pressure from emerging economies, the new Canadian approach also focuses on promoting stable environments where Canadian companies can invest and increase trade across the Americas. Recently, at a major conference in Washington D.C. hosted by the Council of the Americas, International Trade Minister David Emerson said that Canadian investment in Latin America and the Caribbean had reached almost $100 billion in 2006, far greater than Canada's investments in Asia.

Emerson highlighted that in many South American countries, Canada is a top investor in sectors that range from mining and power generation to financial services, education and telecommunications. Canada is also helping to address the competitiveness gap in the Americas by promoting specific commercial initiatives in science, technology and investment.

Competitiveness and the whole region's capability of attracting and retaining investments, the Canadian government says, start with strong democracies and institutions followed by a transparent and predictable business environment. Specific areas where Canada can contribute with expertise and technology include the energy sector, not only in the booming oil and gas sector but also regarding alternative renewable sources of energy that seem to offer a potential for development in the region.

In addition to trade and energy, Canada has been engaged in a hemispheric collaboration agenda since becoming a full member of the Organization of American States 15 years ago.

Canada's role in supporting and strengthening democracy and security is critical at a time when Latin American countries have recently elected new governments, but where institutions in some of these countries are still fragile. Canadian support in conflict-affected countries like Haiti and Colombia show that the experience of a strong democratic country can be extremely helpful not only in ensuring the stability of institutions, but also in social recovery following periods of armed conflict and violence.

Canada is also playing a critical role in activities aimed at countering security challenges impacting the region – from drug trafficking to organized crime, illegal immigration and pandemic preparedness.

Strong signals paired with concrete actions are to be taken seriously. Key Canadian leaders are investing time and resources looking closely at those opportunities where Canada can make valuable contributions throughout the Americas. At a time when Washington's re-engagement with Latin America will be on the back burner at least until after the 2008 presidential elections, the region will benefit from this revitalized interest coming from Ottawa to address a common agenda of security, economic prosperity and competitiveness in our shared economic space.

Latin America funds on top in 2nd quarter

07/08/2007 - By THE ASSOCIATED PRESS

Emerging market stock funds regained their performance edge in the second quarter, overtaking all domestic stock fund categories, according to fund watcher Lipper Inc.

Funds invested in developing countries in Eastern Europe, South America and Asia saw their returns dwindle in the first quarter as a Chinese stock market decline prompted a sell-off around the globe. The sell-off proved short-lived, however, and these funds once again offered double-digit returns over the last three months.

Latin American funds led all fund categories with average returns of more than 20 percent, while diversified emerging markets funds and Pacific region funds also posted double digit returns. Diversified international funds, which own stocks from developed European and Asian markets, saw better returns than U.S. stock funds, with small- and mid-cap international growth funds gaining more than 9 percent.

Domestically, a difficult June limited quarterly returns in most diversified stock funds. For the second quarter in a row, mid-cap funds led large- and small-cap funds while growth funds again outpaced value funds. Mid-cap growth and core funds, which include both value and growth stocks, returned nearly 5 percent for the quarter. Small-cap growth fund returns averaged more than 4 percent. Large-cap funds managed gains of more than 4 percent as well, with growth funds barely edging out value. Small-cap core and value stocks were the worst performers among U.S. diversified stock funds, with returns averaging about 3 percent.

Rising oil prices fueled double-digit returns for natural resources sector funds. Communications and technology funds also outperformed diversified funds for the quarter. Utilities and health care funds returned just more than 2 percent on average, while financial sector funds returned less than 1 percent. Gold funds were essentially flat for the quarter as gold prices fluctuated widely.

The ailing real estate market depressed real estate sector funds for the quarter. They lost an average of 9 percent, the only category with a negative return besides bear market funds, which bet against the market.

Santander to double latam business in 3 yrs

04/07/2007 - by Reuters

Spain's largest bank Santander (SAN.MC: Quote, Profile, Research) said on Thursday it expected to double its income from Latin America over the next three years.

Santander, the world's seventh largest bank by profits, said it hoped to increase its private banking clients in Latin America by at least 9 million to over 30 million by 2010, regional director Francisco Luzon told a business conference.

"Our slogan for the next three years is clear: double and win," Luzon told delegates in the northern Spanish city that the bank is named after.

Santander reported a 29 percent rise in 2006 profits from Latin America as revenues grew around 26 percent.

Brazil, with Latin America's biggest economy, is Santander's top profit contributor in the region.

To drive growth, the bank expects to invest one billion euros in technology in Latin America and a further one billion euros in property by 2010.

It also expects to invest 800 million euros ($1.09 billion) between 2006 and 2009 to modernise its offices and call centres.

The bank said that by 2010, it hoped to boost small and medium sized business clients to 1.2 million from 780,000 in 2006.

North and Latin America at juncture for free trade

07/02/2007 - By www.canada-digital.com

U.S., Canada and Latin America can form world trading bloc if they quickly improve their transportation infrastructures and simplify customs requirements, according to UPS.

"I believe that Latin America, home to half-a-billion people south of the U.S.-Mexico border, has the potential to be the next hotbed of trade and economic growth," UPS Chairman and CEO Mike Eskew told participants at the U.S. Commerce Department's inaugural Americas Competitiveness Forum.

"But it is clear the Americas are at a crossroads," Eskew continued. "Although we're neighbors, our border and customs policies make it sometimes seem like we're enemies. We have so many complicated customs and security requirements in place that it's often easier to import goods from Europe or Asia ... The choices are to adapt, or become irrelevant."

The trade issues facing the region are particularly nettlesome, the CEO added, because they are impeding what should be clear "built-in advantages."

"The first is geographical proximity," Eskew said. "In an era of just-in-time supply chains, proximity is everything. Latin American markets can be accessed by land and sea. Another key advantage ... is the ability to take advantage of several free-trade agreements. While we still face the challenge of how best to knit them together, these agreements really matter."

The chief executive noted the North American Free Trade Agreement (NAFTA) between the U.S., Canada and Mexico already has created the second-biggest trading bloc in the world behind the European Union "and accounts for far more trade than the U.S. conducts with China."

"And between 1997 and 2020, Latin America's real Gross Domestic Product is expected to grow 4.4 percent annually. That's faster economic growth than Asia at 3.6 percent and much faster than the 2.8 percent global average."

Such growth is not guaranteed, however, and the nations of Latin America have got to start addressing their problems now, Eskew said.

The CEO used the automotive industry to illustrate just one of the problems with the current customs process.

"Did you know that the average North American-produced vehicle crosses the border more than seven times during production?" he asked. "During the journey, each vehicle faces a staggering 28,200 customs transactions. By comparison, cars imported from Europe or Asia to North America involve a single customs transaction. If we delay cross-border shipments by just a day, the Americas lose their proximity advantage over Asia."

Private companies, meantime, should respond by using technology to improve their own product supply chains. There are huge gains in efficiency to be had by removing middlemen and unnecessary warehousing and creating information systems that keep track of every movement, Eskew asserted.

- Develop a single, streamlined customs clearance system.

- Identify "trusted shippers" and let them get in the "fast lane" for customs processing.

- Raise the minimum dollar value at which imported goods must receive customs clearance and separate the release of shipments from the collection of duties and fees.

- Increase spending on transportation infrastructure, particularly the road and rail networks. Latin America is spending less than 2 percent of GDP on infrastructure compared to 3-to-6 percent in China and South Korea.

- Improve the communications infrastructure, both wired and wireless.

"Global commerce is like a river," the CEO concluded. "It tends to flow down the paths of least resistance. While Asia and other regions work to make their countries friendly to trade, we cannot be comfortable with the status quo."

Fenosa updates on Spanish gas activities and plans Latin America investments

06/14/2007 - By Clare Watson

The gas unit of Spanish energy group Union Fenosa has reported that it climbed to second place in the Spanish gas supply market in Q1 2007, with a 12.4% share. In addition, Reuters has revealed that the company is planning E1.65 billion investments in Latin America.

Union Fenosa Gas said that, in Q1 2007, it supplied 10,908GWh to the Spanish market, mostly from its plants in Damietta and Oman. This matches the 2006 figure, despite a general decline in gas sales because of high temperatures and higher precipitation.

In addition, Union Fenosa Gas said that its gas sales to the group's combined cycle gas turbine (CCGT) plants in Q1 2007 amounted to 5,859GWh. This figure is very similar to 2006's, which equaled a 20.1% market share, making Union Fenosa group Spain's top gas-fired power generator, the company said.

In 2007, Union Fenosa Gas expects to increase gas sales to industry and to CCGTs, and is planning to supply approximately 14% of the total gas used in Spain. The entry into force of the CCGT plants in Sagunto, Valencia and Sabon, A Coruna in 2007 will contribute to a 30% increase in gas sales to five billion cubic meters (bcm), the company said.

Gas is a central part of Union Fenosa's strategic plan for 2007 to 2011 and the company hopes to obtain an additional 2bcm gas from new sources. As a result, by 2011, Union Fenosa will have 8bcm to fuel its combined cycle plants, supply the domestic market and engage in international trading.

According to Reuters, Union Fenosa has also confirmed that it is planning to invest E1.65 billion in boosting its installed renewable power generation capacity in Latin America to 1,400MW from the current 900MW.

While 55% of the company's new developments will be wind power, 45% will be hydroelectric, Reuters said. Projects announced so far include a wind farm in Baja California, Mexico but the company is also reported to be considering developments in Costa Rica, Panama and Colombia.

According to Reuters, Union Fenosa believes that the Latin America segment of its 2007 to 2011 strategic plan to improve renewable generation in its energy mix could save up to one million tonnes of CO2 emissions a year.

Latin America attracting investors from India

06/09/2007 - By Marla Dickerson, Times Staff Writer

JUITEPEC, MEXICO — Ask for directions to Dr. Reddy's Laboratories Ltd. in this industrial city in central Mexico and locals will give you a curious look. Many are unfamiliar with the drug maker, one of India's largest pharmaceutical companies, which purchased a production facility here in late 2005 for about $59 million.

It may be the first time they've heard of an Indian company doing business in Mexico, but it won't be the last. Indian investment in Latin America is relatively small, but it's growing quickly. Indian firms have invested about $7 billion in the region over the last decade, said Rengaraj Viswanathan, head of the Latin American division of India's Ministry of External Affairs in New Delhi. He figures that amount will easily double in the next five years.

While India has become a magnet for foreign investment, Indian companies are looking abroad for opportunities, motivated by declining global trade barriers and fierce competition at home. Their gaze is falling on Latin America, where hyperinflation and currency devaluation no longer dominate headlines.

"Latin America is becoming a stable and increasingly growing and prosperous market that offers opportunities for our companies," Viswanathan said.