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In Uruguay, U.S. Sees Export Hub for Mercosur

On August 19, 2010, In competitiveness, foreign investment, us companies, visionaries, by InvestBA
Montevideo Port

U.S. companies look to Montevideo as a regional hub for expanding export markets throughout Mercosur.

The U.S. may be mired in a full-blown recession, but economic activity and investment is surging here in the Southern Cone. Now Washington may finally be taking note, as evident by news yesterday out of Montevideo courtesy of El País. The U.S. Ambassador to Uruguay, David Nelson, told a gathering of businessmen at the Uruguayan Trade Chamber the U.S. is now encouraging more American companies to invest in the region in order to tap growing consumer demand in Mercosur countries Argentina, Brazil, Uruguay and Paraguay. “As consumer demand has fallen in the U.S., our companies are looking for more export opportunities,” said Nelson adding, “(U.S.) companies are very interested in the region as a platform for investment and also a potential market for exports.” Speaking about Uruguay specifically, Nelson says favorable tariff reductions at the San Juan Mercosur Summit has the U.S. eyeballing Uruguay as a regional distribution center. “In the last two weeks, I visited several free trade ports and companies investing in regional distribution logistics, and I see a very interesting possibility for American companies working together with Uruguayan partners to achieve this objective of export expansion.” In closing, the Ambassador reiterated the most salient talking point for any company considering regional expansion based in Uruguay, “”Uruguay is a very interesting country for investment given its political and economic stability as well as its human resource wealth.” (Full article in Spanish)

For more information on U.S. companies already investing in Argentina and Uruguay, check out the InvestBA archives and download the latest edition of InvestBA Privada.

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“The Argentine Economy Recovers Strength”

On June 28, 2010, In competitiveness, foreign investment, by InvestBA
Argentine Real GDP

With private expenditure and GDP growth, Wells Fargo sees signs of a recovery in Argentina.

The buzz about Argentina seems to be having an impact on investors of all stripes. After Sunday’s 3-1 defeat of Mexico, global betting sources say the Albiceleste’s odds of winning the World Cup improved to  15/4, third only to Spain and Brazil. Whether sports gambling qualifies as “investing” is certainly open to debate; however, a more sober cadre of long-term investors are also starting to take note. San Francisco-based financial giant Wells Fargo featured an unlikely subject for this week’s front-page Economic & Financial Commentary: Argentina. The analysis showed Argentina’s 7.9% growth rate in the 4th quarter of 2009 followed by a healthy 6.8% year-over-year rate in 1Q10. Meanwhile, Argentine private consumption expenditures which rose a mere 0.5% in 2009, grew 7.3% in the first quarter of this year alone. The nation’s spending recovery is also reflected in the current trade balance, as imported goods and services jumped 30% in the first quarter. Unfortunately, exported goods and services only rose 4%, although Wells Fargo notes the strength of the Brazilian economy as a contributing factor in Argentina’s recovery. While over-dependence on Brazil’s fortunes is a concern, the ongoing China soy conflict highlights the need for 1.) less federal government intervention and 2.) cultivation of more international trade relationships in the Americas, the Euro-zone and Asia. To read the full Wells Fargo Securities report, click here.

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European Luxury Imports Booming in BA

On May 10, 2010, In foreign investment, lifestyle, by InvestBA
Mercedes-Benz Argentina

Automakers like Mercedes-Benz are benefiting from a luxury consumption boom in Argentina.

If March sales figures were any indication, 2010 will be a very good year for European luxury automakers exporting to Argentina. According to iProfesional; Audi, BMW, Mercedes-Benz and Porsche all posted double or triple-digit gains in units sold compared to March 2009. Several factors are contributing to the current boom: the falling Euro, pent-up demand after automakers slashed production and exports in ’09 and the introduction of several new luxury models in Argentina like the Audi A5 Sportback and the BMW 5-Series Gran Turismo. BMW posted the largest gain with a 142% increase in units sold; 44% of those were 300 series models. Porsche was second with a 100% increase in units sold, while Audi posted a 52% increase. Of the four main European luxury brands, Mercedes-Benz sold the most units (588) in March. And local analysts say the boom-de-lujo is not limited to autos; high-end consumer demand for fine watches, jewelry and whiskeys is also strong thanks in large part to the strength of the Brazilian economy which is being described as an umbrella for Argentine companies posting record exports of cars, appliances and textiles to consumption-minded Brazil. Inflation has also forced the hand of Argentine retailers who are offering attractive, peso-denominated payment plans on goods once reserved for the upper class like large-screen LCD televisions. iProfesional also credits the European automakers for offering attractive financing plans like BMW’s four-year, 0% interest plan and bringing entry-level model prices down to around US$30,000.  (Full article)

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निवेश: India & BA Explore Opportunities

On May 3, 2010, In energy & agriculture, foreign investment, technology, by InvestBA
cii-godrej

Agribusiness, infrastructure and technology are just three of the Argentina/India opportunities.

While Argentina and India are still worlds apart in many respects, the 9,287-mile gap between Buenos Aires and Mumbai seemed a little less distant last week. A delegation form the City of Buenos Aires including Mayor Mauricio Macri just completed a week-long Trade Mission to India for a series of meetings with CEO’s, trade groups and government officials. Macri’s administration celebrated the arrival of Tata Consultancy Services last year, so the gobierno porteño is encouraging other Indian firms to initiate operations in the nascent Technology District. “Mr Macri also pointed to Argentina’s comparative strengths in agriculture and urged Indian firms to invest in the south American country, says Inida’s Orissadiary.  “He added that physical infrastructure development holds the key to Argentina’s growth process and invited Indian companies to consider participating in Argentina’s infrastructure projects.” At the Confederation of Indian Industry’s India-Latin America Conclave, Jyotiraditya Scindia, India’s Minister of State for Commerce & Industry, offered a message of trade escalation and diversification in the region. Scindia encouraged Indian companies to ramp up exports of manufacturing and high value-added products to “other major countries like Mexico, Argentina, Peru, Chile and Uruguay.” (The bulk of Indian exports currently go to Brazil). Agribusiness was another major theme of the Argen-India dialogue with Buenos Aires encouraging more Indian investment in the sector. A meeting between Mayor Macri and the Chairman of Godrej Industries may bear fruit in the coming year. A $1.8 billion conglomerate, Godrej is Inida’s leading manufacturer of oleochemicals.

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ArgenChina: Soy Rift Highlights Dependence

On April 14, 2010, In competitiveness, energy & agriculture, by InvestBA
A soybean oil dispute highlights the degree of dependence between Argentina and China.

A soybean oil dispute highlights the degree of dependence between Argentina and China.

The Argentina-China bilateral trade relationship is experiencing some mild turbulence thanks to a recent rift over soybean oil exports. The pairing of the world’s largest soybean oil exporter (Argentina) with the world’s largest consumer (China) was a match made in import/export heaven. But like all good relationships, jealousy often surfaces when one partner seems to be gaining the upper hand (the market dominance of China’s manufactured imports), followed by feelings of anger and retaliation (Argentina’s subsequent raising of tariffs to protect local industry). China, not universally recognized as the global arbiter of export purity, has countered by shifting more licensing authority to the government and simultaneously questioning the quality of Argentine soybean oil imports: moves which have dramatically slowed the pace of imports. So with China brooding in the master bedroom and Argentina sleeping on the sofa, will the relationship fall apart? Not likely, says Thomas Mielke, the executive director of Oil World, and it boils down to one word: dependence. “Neither the U.S. nor Brazil has the capacity to crush enough oil to meet China’s demand, making it ‘risky’ for China to continue rejecting Argentine imports,” Mielke said.  The true test comes later this month when two Argentina soy shipments are scheduled to arrive in China. Gustavo Lopez of Agritrend agrees that dependence will ultimately smooth over this oily long distance dispute, “Each country needs the other, and doesn’t want this to get out of hand.” (WSJ.com article)

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