Asia-LAC Business Digest — 5 Oct 2017

Up Front

Australian Trade Minister Steven Ciobo was spotted flying out of Mexico City this week, on the tails of talks to establish a Mexico-Australia Free Trade Agreement. Australia is part of larger effort on the part of the Mexican government to make "people recognize there is life after NAFTA,” and learn to cope with the Trump administration’s protectionist ways.

While not everyone is happy with surrendering to the charms for Free Trade Agreements, Latin American and Asian countries are losing no time in Making Trade Great Again as America looks inward. Whether it’s Guate-Korea, Chile-China, or Peru-everyone, announcements about trade deals have been flying fast and furious. The bigger moves are those being made by trading blocks: as we noted last week, Mercosur is looking to do trade deals with Australia, New Zealand, South Korea, and China; while the Pacific Alliance has been looking to Australian and New Zealand.

The big fish, of course, is a revived Trans-Pacific Partnership, which the 11 remaining countries are hoping to have ready for the 11 November APEC Summit in Vietnam.

Top Stories

Seven teams compete for $2.6bn Panama monorail — Global Construction Review
Seven bidders have prequalified for Panama’s Line 3 monorail project, and now move on to the tender stage, which is being let on a turnkey basis. The the 27 km, 14 station line is is expected to cost around $2.6bn, which is being financed by Japanese Bank for International Cooperation (JICA) over 20-years. The bidders are:

  • China Railway Group;
  • Oriental Metro: a consortium made up of China Harbour Engineering and the Beijing Urban Construction Group;
  • HP Joint Venture Consortium: made up of Hyundai Engineering & Construction and Posco of Korea;
  • ACPC Consortium: Acciona Construcción of Spain and the Power Construction Corporation of China;
  • The Line 3 Consortium: FCC of Spain and Carso Infrastructure of Mexico,
  • Astaldi, an Italian contractor based in Rome; and
  • Line 3 Monorail Consortium: Obrascon Huarte Lain of Spain, Andrade Gutierrez Engineering of Brazil and Mota-Engil of Portugal.

Latinoamérica fija la atención en el turismo chino como futuro motor de crecimiento — El Nuevo Herald
The Novam Portam team was at this event last week, which highlighted the opportunities for trade and tourism with China for Latin American countries. Eduardo Ferreyros, Peru’s Minster of Foreign Trade and Tourism, Miguel Braun, Argentina’s Minister of Commerce, and Felipe Jaramillo, president of ProColombia, all gave their perspective on the challenges and opportunities of China, which include dependency on raw materials, the fragmentation of Latin American markets, and the distance between the two regions.

Agora é bom momento para comprar ativos no Brasil por preços baixos, diz gigante da construção chinesa — Globo
China Communications Construction Co (CCCC) says it is shopping in Brazil. “Now is a good time for Chinese companies to accelerate their investment, and buy quality assets at a low price,” the company says to Brazil’s Globo. This follows on the meeting last week in Beinjing between CCCC South America Regional Company chief Chang Yunbo and Pará governor Simão Jatene, who is looking for a sponsor of a rail project in the state. In Brazil, where CCCC’s LAtam arm opened it’s São Paulo HQ in the first half of 2016, the company is 80% owner of Concremat, as well as port projects in Santa Caterina and Maranhão. 

El sueño de Perú de ser el rey del cobre y superar a Chile tropieza con el mismo Perú — Diario Financiero
Peru's Dream of Usurping Chile as Copper King Faces Roadblocks — Bloomberg
Peru's government says the country’s potential in copper is being restricted by too much bureaucracy. It’s a big stretch, as Peru produces 200,000 metric tones of copper a month, less than half Chile’s production. Peru Mines and Energy Minister Cayetana Aljovín says the country has a three-pronged plan:

  • Reduce regulations and the number of permits required to mine; 
  • Create a single government department where companies can request all required mining permits at once; and
  • Create a fund the government can use to invest in social programs in areas that may be affected by mining.

O Brasil corre o risco de ficar na poeira — Revista Amanhã
A write up of the World Economic Forum’s Global Competitiveness Report launched last week that warns that Brazil may get left in the dust. Brazil ranks 80th, behind China (27th), Russia (38th), India (40th), and even - they note - Uruguay (76th).

Operações da GM na América do Sul e Ásia serão unificadas em 2018 — Motor 1
GM is retooling it’s operations in the Emerging Markets. Effective 1 January 2018, it is consolidating it’s Asia (ex-China) and Latin America subsidiaries as a single company, under current executive VP of GM Latam Larry Angle, based out of Detroit.

PortMiami cargo traffic increases over 18 percent since last year — South Florida Business Journal
PortMiami credits the $1.3bn spent on infrastructure improvement for an 18.5 YoY increase in cargo movement through the port. In addition to a deeper channel, new gantry cranes enable to port to service post-Panamax ships which can be up to 22 containers wide. The article also notes that Port Everglades is undergoing a similar infrastructure improvement program which will allow it to accommodate similar vessels. 

China-LAC

China's Strategic Play in Brazil — Americas Quarterly
It’s time for a new era of China-Latin America business relations — OECD Development Centre
Robert Muggah and Adriana Abdenur from the Instituto Igarapé have an article in the America’s Quarterly; Angel Melguizo, the OECD’s Chief Economist for Latin America writes on Medium. And the articles have the same theme: it’s an opportune time for China to be looking at Brazil, but it’s tricky.

China's State Grid eyes Brazil deals offering synergy with existing projects — NASDAQ
China State Grid is looking for new opportunities, according to Zhu Guangchao, director of international cooperation. "We are very interested in the areas of power transmission, distribution and renewable energy," he said during an event marking the beginning of construction of a power line linking the states of Pará and Rio de Janeiro.

Com US$ 8,5 bilhões em 2017, China aumenta participação em fusões e aquisições no Brasil — Portos e Navios
Chineses investirão US$ 20 bil no Brasil nos próximos 12 meses — Correio Braziliense
Soja, el hilo rojo que concentra las inversiones chinas en Brasil — Clarín
Dealogic says M&A for Brazil in the first three quarters of the year had a Chinese buyer in 12% percent of all deals, that totaled $8.5b. Chinese investments in Brazil are expected to total $20b over the next twelve months.

Brazil's mega hydro plan foreshadows China's growing impact on the Amazon — The Guardian
An article highlighting the difficulties facing Brazil’s Hydrovia project on the Tapajós river, and the environmental and indigenous impact it can have.

China Unicom chega ao país para lançar cabo submarino que liga Brasil a Camarões — TeleSíntese
China Unicom opened an office in Brazil this week, ahead of launching the SAIL submarine cable to connect with Cameroon. Huawei Marine will lay out the infrastructure for the cable, which is expected to begin operations in the second half of 2018.

O ambicioso projeto da Foxconn que não decolou no Brasil — Exame
A great profile of the failed effort by Foxconn to export it’s model to Brazil in 2012.

Brazil takes part in Interwine China 2017 for the first time — Macau Hub
Companies from Brazil exhibiting wines, spirits and artisanal beer will participate in InterWine China, which will take place from 12 to 14 November in Guangzhou, for the first time this year.

PPK espera reunirse con presidente de China en cumbre APEC 2017 — El Comercio
Peru, China leaders could meet on the sidelines of APEC Summit — Agencia Andina
PPK is looking to swing through China to visit Xi Jinping on his way to APEC’s Summit next month.

Empresas asiáticas interesadas en proyectos de infraestructura y minería de Perú — Agencia Andina
ProInversión presentó cartera de proyectos APP por US$ 17,000 millones en Corea del Sur — Portal del Turismo
Proinversion Concludes Asia Roadshow 2017 in Tokyo — MarketWatch
Readouts from Peru’s ProInversión East Asia roadshow last week note the $17b portfolio of infrastructure projects on offer and Peru’s active pursuit of PPPs.

Perú lanzará su primera tienda en plataforma Tmall de Alibaba en China — Peru Retail
Peru’s Association of Exporters (Adex) will launched a store on Alibaba’s Tmall by the end of the month. The thirty Peruvian companies participating in the store hope to sell $3-4m in goods through the e-commerce platform a year; a number we expect will grow.

Go direct to China's interior, ProChile trade commissioner tells exporters — Fresh Fruit Portal
Chile continues to play the Chinese fruit market game at the next level. ProChile’s Trade Commissioner in Shanghai, César Suárez, told exporters at Fruittrade in Santiago that they need to look beyond top-tier cities for growth in China:

“In truth for the first time this year in terms of commercial promotion we’ve taken a step of going from theory in books to strategy with concrete actions,” Suárez said of the second and third-tier city concept.

“It’s been developed both in Wuhan and Chengdu, very recently. Wuhan is like an Asian Chicago, a city with a favorable distribution – within 400km they have 400 million inhabitants.

“They [Wuhan fruit buyers] don’t want to have to go through Shanghai or Guangzhou – they want to deal directly with the producer.”

Vehículos eléctricos: de China a Chile — PULSO
Chile China Chamber of Commerce (Chicit) head Juan Esteban Musalem pens an op-ed arguing that the increasing presence of Chinese auto companies (like BAIC and BYD) in Chile will give the Chilean electric auto market a well-needed boost.

Shenzhen Kingship opens up Chilean cherry market — Fresh Plaza
Chilean Cherries strike again. This time they've found a partner in Shenzhen-based Kingship, an import-export company focused on "premium fruit, meat and seafood import and exports, catering for a new Chinese middle class.”

Valle del Cauca da "primer paso" para pelear por mercado de zapatos con China — W Radio
El Valle se prepara para competir con el calzado Chino en Colombia — Fashion News
Valle del Cauca - the region that is producer of 20% of Colombia’s shoes - is stepping up to the challenge of Chinese imports. They are looking to differentiate through the use of technology, design development, and the use and mix of new textiles.

Chinese investors eyeing Mexico's SEZs, say Mexican officials — Xinhua
Chinese investors are interestest in participating in the development of Special Economic Zones (SEZs) at Lazaro Cardenas-La Union on the west coast; Coatzacoalcos on the eastern Gulf of Mexico; and Puerto Chiapas, on Mexico's south Pacific coast. The projects were announced last week, along with $5.3bn in government funding, by President EPN. 

Korea-LAC

Corea del Sur quiere implementar Sistema de Transporte Público en Manizales — La FM
Manizales has a plan for a public transportation system; Chanyoung Ji, President of LG in Colombia, would like to help them build it.  

O que falta para a formalização do acesso da carne suína brasileira para a Coreia do Sul? — ND Online
Brazil needs to sign an agreement on sanitary certification with South Korea to be able to export pork to the country; the expectation is that that will be done by the end of the year, and pigs will fly between the two countries in early 2018.

Korea to consult Colombia on airport management — Korea Times
Korea Airports Corp. (KAC) has signed a $1.6mn consulting agreement with Matecana International Airport (MIA) in Colombia. KAC will provide knowhow in various areas from security to risk management until 2022.

Samsung inauguró su fábrica de heladeras en Argentina — Diario Uno
Samsung opened a refrigerator manufacturing plant in Buenos Aires Province the will make 6 models of fridges and employ 300 people.

South Korea Agrees to Assist Latin America with ICT Development — Nearshore Americas
13 countries from Central and South America and the Caribbean, have signed an agreement with South Korea to share expertise and engineering know-how o bolster the region’s information and communication technology (ICT) development. The agreement was signed at the 3rd Korea-Latin America ICT Ministerial Forum held in Busan, South Korea. 

Japan-LAC

Presentan una visa especial para argentinos que quieran viajar y trabajar en Japón — La Nación
Argentine youths 18 to 30 years old now have access to to Japan’s Working Holiday visa program, allowing them to spend up to a year on a internship in Japan.

Banco do Brasil fecha agências no exterior, mantém Miami e Japão — Extra Online
Banco do Brasil, the country's second largest, is going to close all it’s overseas retail branches over the next couple of months, with the exception of branches in Miami and Japan.

Redrado: “Japón tiene a la Argentina y México en la mira para invertir” — El Cronista
The former head of Argentina’s Central Bank Martín Redrado says that Japan has Argentina and Mexico in its sights for investment:

"I am surprised - I see an interest from Japan in Argentina like I have never seen in my professional life. They are looking both at Argentine companies, as well as specific opportunities in productive complements such as infrastructure."

Fondo Perú-Japón suscribe convenio de donación con Municipalidad de Pampa Hermosa — Diario la Region
Northeast Peru will see five communities electrified thanks to support from the Peru-Japan General Fund.

Chile y Japón impulsan un proyecto para mejorar cartera crediticia del CAH — La Nación
Chile’s Institute of Agriculture Development (INDAP) and Japan’s JICA are cooperating on strengthening and improving the lending portfolio of Paraguay’s Agriculture Improvement Credit (CAH) entity.

Japón importará más carne en 2018 y habrá mayor competencia — El Observador
Uruguay is licking it’s chops at gaining access to the Japanese beef market. 

ZPE prospecta investimentos  de japoneses  — Diário do Nordeste
Japan’s Ambassador to Brazil, Akira Yamada, visited the Pecém Processing and Export Zone (ZPE) outside of Fortaleza last week. Representatives from JETRO and the Japanese Industry Chamber of Commerce in Brazil also attended.

GCC-LAC

Costa Rica announces plans to open a trade representative office in Dubai — Dubai Government Media Office
In yet another sign of the growing links between the GCC and LAC, H.E. Manuel González Sanz, Costa Rica’s Minister of Foreign Affairs and Worship, used a high-level visit from the Dubai Chamber of Commerce and Industry to announce Costa Rica's plan to open a trade office in Dubai. The Dubai Chamber will host the Costa Rican trade office. 

Sharjah Chamber promotes trade, investment with Mexico — Gulf News
Francisca Elizabeth Mendez Escobar, Mexico’s Ambassador to the UAE, continues to forge commercial links. This week the Ambassador attended a meeting hosted by The Sharjah Chamber of Commerce and Industry (SCCI) to discuss ways to improve economic and investment relations between the two countries. 

Dubai Exports assists Brazilians in technology summit — ANBA
Dubai Exports will assist Brazilian firms that are unable to attend the Future Manufacturing and Trade Summit, on November 6 and 7 at the Jumeirah Emirates Towers in Dubai, by providing contact information or arranging meetings with interested participants.

India-LAC

ArcelorMittal plans $1 billion Mexico investment by 2020: chairman — Reuters
India's ArcelorMittal, the worlds largest steelmaker, is better on NAFTA. The company will invest $1bn in Mexico over the next three years to increase production for the North American market. The investments will come in Mexico's SEZs, which have also drawn interest from Chinese investors. 

ASEAN & Oceania-LAC

Singapore companies have doubled their presence in Latin America and Caribbean in last 2 years: Iswaran — The Straights Times
Singapore investments in Latin America, the Caribbean still growing — The Business Times
IE Singapore hosted their semi-annual Asia Latin America Business Forum in Singapore last week. Participants were addressed by a number of high-level figures including, Singapore's Minister for Trade and Industry, Mr S Iswaran. Mr S Iswaran, noted that there are "200 Singapore companies with 400 points of presence across Latin America and the Caribbean (LAC), double the number from 2015”. 

Keppel delivers fifth FPSO project for MODEC in Brazil — Energy Business Review
Singapore-based Keppel Offshore & Marine has delivered the Cidade de Campos dos Goytacazes MV29 to Floating Production Storage and Offloading (FPSO) vessel to Singapore’s MODEC Offshore Production Systems. It will be deployed at the Tartaruga Verde and Tartaruga Mestiça Fields in Brazil’s Campos Basin.

Karoon Gas gains block in Brazil’s latest bid round — Penn Energy
Australia's Karoon Gas has successfully bid for a 171 sq-km offshore block in Brazil's Santos basin. The award is part of Brazil's 14th bid round.

Subscribe to our mailing list

* indicates required