A broad ranging discussion I had with the Ambassador at his office in Buenos Aires last week.
The Latin America Interview with Indian Ambassador R. Viswanathan
December 23rd, 2011 Posted in Brazil, colombia, Commodities, India, Infrastructure, Investing, Latin America, Mexico, Uruguay
As part of the inauguration of the International Fair of Bogota, Colombia’s president, Juan Manuel Santos, said that “Colombia has a clear horizon that makes you dream to prosperity.” The president said India’s participation in trade shows as a model of technological progress, economic and industry and said the approach opens up the possible signing of an FTA with that country.
India is participating for the first time at the show and does so with 151 companies, seeking to consolidate and expand trade relations with Colombia says 50 years ago.And the president of the Export Promotion Council of India, Chadha Aman, said the Colombian market as one of the most stable in Latin America and is appreciated for products like oil, coal, wood and petrochemicals, among others.
Colombia’s ambassador in New Delhi, Juan Alfredo Pinto, said that India is clearly an engineer[ing] power, with production aimed at high technology and product development, with high domestic consumption of vehicles.
He said that 70 percent of taxis circulating in Bogotá was manufactured in India
He also said that Colombia has currently 26 Indian companies.
Gold: Museo de Oro, Bogota, Colombia
IBT Commodities & Futures
one has to look at the currencies of where the company is producing its gold and one has to look at what we like to call GARP, or basic “growth at a reasonable price,” in our stock selection model. As I indicated, we focus on historical and social economic cycles, applying both statistical and fundamental models, including GARP, to identify those companies with superior metrics.TGR: Can you share with us trends in your fund today-either trends in countries, because of the currency play, or trends in companies that represent good GARP?
FH: I think the best country right now for value with government policies-and I’ve met with the ministers and the new president-is Colombia. The best performing stock last year on the Toronto Stock Exchange was Pacific Rubiales Energy Corp. (TSX:PRE; BVC:PREC), which has oil in Colombia. Government polices attracted capital. This was spectacular. It was up 600%. Even year-to-date it’s had great performance.
The Colombian government has made a real push to improve the gold mining industry too. There’s been a move away from artisanal miners towards high-quality mechanized mining. It still employs thousands and thousands of people, but you won’t see the environmental disasters that have taken place previously with a bunch of those small miners that have no compliance for quality. So I think Colombia is a country that is spectacular.
TGR: Any particular gold companies that come to mind?
FH: A big holding for us is Medoro Resources Ltd. (TSX.V:MRS). If you take a look at the size of Marmato, their gold deposit. . .it’s so inexpensive as a producer and for reserves in the ground and the whole consolidation taking place. Another one is Gran Colombia Gold Corp. (TSX.V: GCM), which just went public. Those two companies combined have a $600 million market cap, but also 16 million ounces of production. So I think the rushes going into other countries are going to start to show up in places like Colombia.
Colombia, producer of the world’s largest emeralds, expects to boost export sales by about half this year as buyers in India spur a recovery in demand.Exports of the gems mined mainly in the mountains of central Colombia will rise to about $120 million this year, from $80 million in 2009, Oscar Baquero, president of the nation’s Emerald Federation, said in an interview yesterday in Bogota.
“The market now is Asia,” he said from an office above downtown streets crowded with stores showcasing the gems. “They are getting rich quickly. They want things that show status.” Asian economies are buying more Colombian gems, coal and oil, increasing exports from the South American nation while demand in traditional markets such as the U.S. falters.
TWO OF AMIT WADHWANEY’S passions are international stocks and ethnic restaurants. That he is an avowed value investor is no surprise, given that Third Avenue Management, his employer, was founded in the mid-1980s by famed bargain-hunter Marty Whitman. Wadhwaney’s duties include running the Third Avenue International Fund (TAVIX). Barron’s recently caught up by Wadhwaney by phone.
Although investors in other parts in Latin America have started investing in Colombia, there is very a long way to go. On the plus side, there is a lot more de-risking that is taking place in Colombia on the ground level in terms of security, which is resulting in the opening up and starting up of new businesses. Consider, for example, the world of resources. Exploration in Colombia over the years for things like hydrocarbons, base metals, precious metals and coal was nonexistent. You didn’t dare do it because you wouldn’t come out of the bush alive. Now, on the other hand, there is a whole industry building—and not just because of the better security. It’s also because of the tremendous legal infrastructure that is in place to protect foreign investors—something lacking in many other countries in the region.
Colombia – the only risk is wanting to stay
Minister Santos speaking after 2010 CII Indo-LAC Conclave
The Globe and Mail
Indeed, The New York Times listed Colombia in its top 31 places to go in 2010, saying Bogotá has become “a role model of urban reinvention,” and calls Cartagena the next Buenos Aires.
Lonely Planet ranked Colombia in its top 10 list of happiest places in the world. Robert Reid, co-author of the last edition, says, “Would I take my mom there? I would in a heartbeat.
There are plenty of reasons [Colombia] should be an obvious tourist and trade destination. It has never defaulted on its debt. The oldest democracy in the southern hemisphere, it is also a land of great natural beauty.
The country is diverse, strapped by two oceans, the Atlantic and Pacific, laced with three mountain ranges, jungle, coastline, savannah and Caribbean islands. Its cloud forests are as rich in species as the Amazon, according to the Nature Conservancy. It also has the highest number of exotic bird species, frogs, and variety of orchids in the world; the World Wildlife Fund ranks it fifth in terms of biodiversity.
Many of the current changes afoot in Colombia are credited to outgoing President Alvaro Uribe’s security policies. Under his watch, backed by funding from the U.S., thousands of paramilitaries and guerrillas have exchanged guns for civilian clothes. FARC attacks have subsided, with most of the internal conflict shifting out of cities to remote areas. [A]fter thousands of presentations, greeted with polite skepticism, Canadians were finally tempted by “the physical story,” Mr. Dieppa says: “That it’s closer than you think [to North America]. That we have a 94-per-cent literacy rate. That 70 per cent of our electricity is green and that we’re the size of Ontario, but with five distinctive regions.”
The influx of foreign investment – investors from India to Argentina are laying big bets on the country’s prospects and diminished security risks – is one sign efforts are paying off. Canadian visits to Colombia have more than doubled in eight years. Air Canada now makes direct flights from Toronto or Vancouver to Bogotá four times a week. Global hotel chains such as Marriott are expanding in the country, lured by a 30-year tax exemption on services in new hotels. Cruise ships increased 35 per cent from 2008 to 2009.
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Colombia has been among the nations hardest hit in Latin America this year and its prospects may not improve as exports fall, said Nouriel Roubini, the New York University professor who predicted the financial crisis.“It’s going to be a difficult year,” Roubini said in an interview in New York. “Colombia has been hit by the financial and economic crisis more than people expected.”
Colombia “looked in reasonably good shape” coming into the crisis, he said. Growth slumped to 2.5 percent in 2008, hurt by a 22 percent plunge in exports, from 7.5 percent in 2007, the fastest pace in three decades. Colombia’s central bank said April 3 that the economy was weakening more than it expected.
Colombia has been hurt by “trade shocks, the fall of exports to the region and outside and massive reductions from remittances from workers in Spain, who lost their jobs in construction,” Roubini said.
Chile, Brazil and Uruguay are the countries that may perform better in the region in the medium term, Roubini said.
“Those central banks which were more conservative and hawkish on inflation, like Chile and Brazil, can ease more aggressively,” Roubini said.
Technorati Tags: colombia, chile, uruguay, 2009 economic outlook
The European Commission announced on Nov. 11 that talks for a trade pact between the EU and the Andean Community were officially over.E.U. External Relations Commissioner Benita Ferrero-Walder said that last-ditch efforts to forge a region-to-region agreement had failed, and that it was moving ahead with separate agreements with Colombia and Peru.
Since negotiations for the trade pact began in June 2007, Andean Community members Bolivia and Ecuador – both staunch opponents of free trade agreements – had opposed the pace and scope of the future pact, vying instead for individual stipulations to protect their smaller and developing markets compared with Peru and Colombia.
Peru and Colombia, both of which have signed free trade agreements with the United States and are in the process of pursuing other agreements with several countries, especially in Asia, pushed for a speedy conclusion to the talks, with our without their fellow Andean Community members.
Technorati Tags: trade
Colombia, the leading producer of palm oil in the Americas, will have six palm biodiesel plants by next year and plans to increase its share of the biofuels market, sources from the sector said
In an interview Friday with Efe, the president of Colombian palm oil producer Comercializadora Internacional Acepalma, Maria Emma Núñez, said that four of these six plants have already begun operating, but that production will be stepped up next year and the other two plants will also come on stream.
“At this time, (palm oil production) is destined for processing plants to make cooking oil, margarine and soaps, and there has been a little this year for the biodiesel plants, but by next year a significant percentage of production will be destined for the biodiesel plants,” she said.
On the sidelines of a meeting on sustainable palm oil that ended Friday in the Colombian coastal city of Cartagena, Núñez said that this year just a small percentage of palm oil output was destined for biofuels production “because the plants have not begun to function fully.”
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Starbucks may be struggling, but a Colombian cafe chain built on the fame of the world’s biggest coffee icon is determined to buck the trend.Even as cash-short consumers cut back on gourmet blends, the Juan Valdez Cafe is selling coffee at 101 stores across Colombia, as well as at outposts in New York, Seattle, Philadelphia, Santiago, and Spain. It plans to add 500 more shops across the U.S., Latin America and Europe by 2010.
The Bogota-based chain has a unique premise: its shops are owned not by investors, but by 22,600 coffee-growing shareholders who opened them to advertise the beans they sell, not to make a profit.
The slick cafes named for a fictional coffee grower invented as an advertising pitchman nearly 50 years ago are meant to draw younger consumers, introducing them to Colombian coffee in hopes they’ll start requesting it at restaurants and grocery stores.
“What we’re doing is financing our promotion through a business” using the stores as tasting shops for customers to sample the product, said Gabriel Silva, CEO of the National Federation of Colombian Coffee Growers. The group created the chain in 2002 and now helps oversee it.
