South America Industry Sectors

 

 

The shockwaves of the global financial crisis 2008-2009 impacted several South America industry sectors. In 2010 and beyond, the Latin American countries are expected to progress in varying degrees. Government stimulus measures and strong consumer demand created by a rise in employment levels boosted growth to pre-recession levels in countries such as Brazil and Chile. Mexico’s vehicle production rose in November and December 2009, according to Mexico’s auto industry association, AMIA. Leasing activities in Mexico’s industrial market showed signs of recovery during 4Q 2009.[br]

 

Brazil posted a 5.5% YOY increase in industrial production in November 2009. Brazil’s auto sales posted an increase of 11.4% and touched 3.4 million units. Fortune 500 companies like Coca Cola and Renault have planned to invest $5.8 billion and $568 million in Brazil in the next three to four years.

 

South America Industries: Retail

Rising employment levels and consumer confidence boosted the retail sector in 4Q 2009. The growth in sales has enabled various retailers to plan expansions in 2010. In Brazil, for instance, retail stocks are outperforming all other sectors, and Brazilian shopping center companies posted a growth of 70.4% in 2009 in the Bovespa. Retail sales are picking up in Mexico as well. Wal-Mart Mexico posted an annual sale of $21 billion in 2009, a 10.4% rise from 2008. Retailers like Costco and Best Buy have announced plans to expand in Mexico in 2010. Chile’s retail sector witnessed an increase of 9.3% in 2009 (November). A lot of unfinished projects have commenced work after facing serious shortfall in financing. Chilean developers have also started looking at other markets in the region like Colombia to increase their footprint.

South America Industries: Energy

Argentina: Argentina has begun work on building a new gas interconnector to Bolivia to enable Bolivia to increase its gas exports and offset demand from Brazil.

 

Bolivia: YPFB, Bolivia’s national oil and gas company, is planning to invest around $1.4bn in 2010 to develop the petroleum industry and expand gas supplies for domestic and foreign markets. Total investments in 2009 were $0.58bn, an increase of 65% over the previous year’s investments.[br]

 

Ecuador: Ecuador is projecting oil production of 470,000-480,000 b/d in 2010. Private sector companies are expected to account for 40% of the total production. There is a plan to construct a new refinery on the Pacific Coast with the help of a South Korean oil company and financing from a consortium of German and Chinese banks.

 

Peru: The Peruvian government is launching a new program aimed at expanding the country’s electricity coverage to 92% by 2011.