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MoneyShow: Why Argentina Is Latin America’s Hidden Treasure

On December 14, 2010, In a-bric, foreign investment, by InvestBA
BBVA Argentina

BBVA, one of MoneyShow's picks, understands Argentine consumers like to hide their personal treasure.

A confluence of good news yesterday on several fronts: The market price for Argentina’s three major AgExports rose, the country risk fell another 3.5%, LCD prices have fallen 30% since the World Cup and debt repayment negotiations began in earnest with the Paris Club.

Despite the onda positiva, it’s important to remember that each of these indicators is highly volatile and subject to external variables like extreme weather, unforeseen risk, punitive tariffs and French egos. So what about something more tangible, more long-term, more big picture to hang our collective hopes on?

MoneyShow and Carla Pasternak’s Global Perspectives to the rescue. Pasternak, director of income research for High-Yield International, scours the globe looking for income plays in developing countries, and she certainly seems fond of Argentina. “A Hidden Treasure,” “the fastest-growing country in the region,” and “the booming country” are just three of the cumplidos macroeconomicos she sends Argentina’s way.

True, inflation is above normal and investor confidence was crippled a decade ago with the $95 billion default but, writes Pasternak, “The good news is all that is in the past. Argentina is in the midst of an economic revival.” One of the keys to success is the shifting nature of Argentina’s external dependence away from the Untied States and rapidly towards BRIC nations like Brazil which imports the majority of Argentine auto production, China which has joint ventures stretching from Tucuman to Tierra del Fuego and India which continues to broaden bilateral relations with Argentina. (Full Story)

For more information about Argentina investment opportunities, download the new issue of InvestBA Privada.

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LAN Airlines, Argentine Growers Build A Blueberry Bridge

On September 2, 2010, In competitiveness, energy & agriculture, foreign investment, by InvestBA
Blueberry Bridge

Fresh, not Frozen: BA, Entre Ri­os and Tucuman have ramped up U.S. blueberry exports with LAN Cargo.

Global demand for strawberries and blueberries has been on the rise, which is good news for the three Argentine provinces that produce the bulk o’ the berries: Buenos Aires, Entre Rios and Tucuman.

And while Argentina is South America’s third largest exporter of strawberries (after Brazil and Chile), she’s moved up to number two (behind Chile) on the blueberry chart. Agronomy engineer Daniel Kirschbaum told La Gaceta that blueberry demand is up thanks to the fruit’s many nutritional and aesthetic qualities.

Kirschbaum, an INTA director and University of Florida IFAS graduate, says blueberry production is creating both jobs and foreign investment in Argentina with greater quantities now being exported at more competitive prices. Argentina’s competitive edge is also a success story in logistics for both Tucuman and LAN Cargo.

“Thanks to the agreement with LAN we could open to U.S. markets, since the export duration is only 20 hours,” said Tucuman Governor Jose Alperovich. LAN Cargo General Manager Carlos Larrain says his company is now “the bridge between the fruit harvested in Tucuman and served one day later on the tables of Americans.”

FreshPlaza.com published the export numbers, while the Buenos Aires Herald has a more in-depth piece on “The Blueberry Route” between Tucuman and Miami. ThePacker.com says Tucuman and Concordia have just come through the coldest August on record, so the route may ramp up a little slower this year.

For more information on Argentina agribusiness opportunities, see our archives and download the new issue of InvestBA Privada.

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“Virgen Extra”: Argentina Olive Oil Investments

On July 22, 2010, In a-bric, energy & agriculture, entrepreneurs, foreign investment, by InvestBA
Argentina Olive Oil

With global demand & changing consumption patterns, olive oil has grown into a  $10 billion dollar industry.

Of all the agribusiness investment opportunities in Argentina and Uruguay, olive oil estates are some of the youngest and most promising. Increasingly health conscious consumers in foreign countries are stoking global demand for olive oil which has tremendous health benefits including heart disease protection and colon cancer prevention.

Industry publication Olive Oil Times says Argentina has capitalized on growing demand in both aging and emerging markets like China and recent droughts in the Mediterranean to emerge as a major producer of aceite de oliva.

The online magazine features an interview with Luis Feld, agribusiness expert, former president of the Terranova winery and current owner of a large olive oil estate in the Cuyo region that produces the Vero Andino product line. Even though Feld only planted his first trees five years ago, the success prompted his group to launch a company that markets and sells fractional ownership opportunities in other Cuyo-based olive oil estates.

With global consumption approaching 3 million tons per year and average price per ton around US$3,600, we are talking about a roughly US$10 billion industry. In addition to annual rents of 18-20%, the group touts olive oil fractionals as “an attractive alternative for those who believe land, water and agribusiness are strategic businesses of the future.”

For more information on agribusiness opportunities in Argentina and Uruguay, visit our archives and download the new issue of InvestBA Privada.

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Agricultural Exports, Farm Loans Surge in Argentina & Uruguay

On April 26, 2010, In a-bric, energy & agriculture, foreign investment, uruguay, by InvestBA
http://investba.com/2010/01/more-rain-efficiency-mean-bumper-crop-in-ba/

Argentine soy farmers are earning record profits. So are the cattle producers in Uruguay.

As farmers in Argentina and Uruguay ride a wave of recovery, exports are booming and banks are poised to increase lending dramatically, according to Bloomberg.

We’ve covered the bullish forecasts regarding this year’s corn and soy crops, and now it appears the banks have taken notice. “Banco Galicia, Argentina’s second-biggest farm lender, expects agricultural loans to increase about 40 percent this year after no growth in 2009,” says Bloomberg, while “HSBC forecasts an expansion of as much as 30 percent to a record volume.”

Argentine farmers are expected to produce 54.5 million metric tons of soybeans and 21.4 million tons of corn this year, annual increases of 65 percent and 69 percent from 2009. Bankers and farmers are equally optimistic given the record harvests coincide with an improving interest rate environment.

Across the river, cattle farmers in Uruguay continue to fill the gap left by falling production levels in Argentina. Beef exports from Uruguay rose 27% in March to 203,465 tonnes compared to March 2009, according to Meat Trade News Daily. 40 percent of Uruguay’s beef exports went to Russia and Asia with Russia demanding 90 percent more beef and Asian markets buying 122 percent more Uruguayan beef compared to 2009.

According to Ag Weekly, “the USDA increased production estimates of soybean crops from Brazil and Argentina, the world’s No. 2 and No. 3 producers, but said strong demand from China will help consume the bumper crops. “

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Initial Pampa Offering? El Tejar Weighs Options

On March 11, 2010, In energy & agriculture, foreign investment, us companies, by InvestBA
Buenos Aires grain & meat giant El Tejar is backed by Capital Group Companies & Altima Partners

Buenos Aires grain & meat giant El Tejar is backed by Capital Group Companies & Altima Partners

More Buenos Aires IPO news this week on the heels of yesterday’s post regarding TGLT’s public offering ambitions. Bloomberg BusinessWeek is reporting that BA-based El Tejar is weighing an IPO in New York and taking the necessary steps to be in compliance whenever the mood strikes over the next three years.

El Tejar CEO Oscar Alvarado told BBW, “We are preparing ourselves so that Brazil is not our only option, and the option exists of doing it in New York. We are preparing the company so as to be able to make the decision to go public whenever we decide.”

With operations in Argentina, Bolivia, Brazil, Paraguay and Uruguay, El Tejar designs and manages grain and meat production systems with an emphasis on risk management and environmental sustainability. (Org Chart) El Tejar’s annual production of grains and oilseeds  is roughly 3 million tons according to Bloomberg, and the company should benefit from record corn and soybean crops this year in both Argentina and Brazil.

While the company describes its focus and community involvement activities as “multilocal,” the company’s appeal to investors is definitely multinational. The two investment funds with the largest stakes in El Tejar are The Capital Group Companies and London-based Altima Partners LLP. (Bloomberg BusinessWeek article)

For more information about investment opportunities in Buenos Aires, download IncomeBA and the new issue of InvestBA Privada.

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