Asia rethinks LatAm

by Dave
Ironically, another thing that is helping Latin America is the tyranny of distance I talked about earlier: Soaring shipping or freight rates are forcing companies that supply goods [from Asia] to the North American market to rethink their long-term strategies. That is helping to power a new manufacturing boom in Mexico. As oil prices and freight rates rise, Latin America will be a key beneficiary.

It’s not just the economies that are doing well. Corporate Latin America now has stronger balance sheets and there is no shortage of world-class companies emerging from the region. Mexico’s Cemex is one of top three cement companies in the world; Cia. Vale do Rio Doce (CVRD) or Vale is now the second largest mining firm in the world after BHP Billiton; Chile’s Codelco is one of the world’s top copper firms; and Brazilian oil giant Petrobras has emerged alongside giant oil firms like ExxonMobil that dominate the global energy trade. In recent months, Mexican telecom billionaire Carlos Slim has regularly swapped places with Warren Buffett as the world’s richest man.
Latin America is suddenly a continent in the spotlight. But as the region booms, challenges remain. Infrastructure is one. Brazil, Mexico and Chile are all investing in expansion, upgrading or construction of new airports, ports, water utilities as well as railways, highways and townships. Private sector firms are racing to build telecom and power infrastructure. Asian companies and Asian investors are giving Latin America a fresh look. Temasek Holdings recently announced the setting up of a Latin American office to boost its own footprint there. I only hope that when I am in Latin America again next year, the region, which has had its fair share of mini booms and major busts, will have built on the strong growth platform of the last few years.