Chile’s salmon farms lose $800m as algal bloom

Chilean workers process farmed salmon in a plant in Puerto Ibanez near the town of Aysen, in the Chilean Patagonia region, some 1660 km (1031 miles) south of Santiago, in this May 24, 2006 file photo.

A deadly algal bloom has hit the world’s second biggest salmon exporter, Chile, where nearly 23 million fish have already died and the economic impact from lost production is seen soaring to $800 million, industry and government sources told Reuters.

There are so many dead fish, they could easily fill 14 olympic-size swimming pools, said Jose Miguel Burgos, the head of the government’s Sernapesca fisheries body.

Unusually high ocean temperatures, due in large part to the El Niño weather phenomenon, have fueled the algal bloom that has affected 37 of the nearly 415 salmon farms operating in southern Chile. Most of the farms are in ocean enclosures or in estuaries.

Read the full article on Reuters

Brazil’s Retail Sales Drop More Than Expected in January

Brazil’s retail sales fell twice as much as forecast in January as double-digit inflation and rising joblessness take a toll on consumers’ purchasing power.

Sales fell 1.5 percent after a 2.7 percent drop in December, the national statistics agency said Thursday. That was more than all but one prediction from 39 economists, whose median forecast was for a 0.7 percent decline. Sales fell 10.3 percent over the past 12 months.

Read the full article on Bloomberg.

How Mauricio Macri Plans to Fill a $1 Billion Hole at Aerolíneas Argentinas


Aerolineas Argentina
Credit: Aero Icarus (flickr), July 1, 2008.

Last year was a good one for global airlines. Thanks to falling fuel prices and an increased demand for air travel, the industry earned an estimated $33 billion in 2015. Carriers around the globe earned near-record profits.

Not so in Argentina, where according to official figures state-run Aerolíneas Argentinas operated at a loss of nearly $10 million through the first eight months of the year. The airline is now expected to need financial support of around $1 billion in 2016, or roughly half of what the government spent on education in 2015.
Argentina’s President Mauricio Macri has vowed to put Aerolíneas Argentinas on a path to profitibility, promising to address the public subsidies on which Aerolíneas relies as part of a broad range of economic reforms. But turning Aerolíneas around will not be easy; structural challenges – and a long history of instability – will be difficult to overcome.

Aerolíneas Argentinas has closely followed the ups and downs of Argentina’s economy for the last several decades. Unfortunately, that has generally meant trying times. After suffering through hyperinflation in the 1980s, the airline was sold to Spanish airline Iberia, only to continue to lose money and get traded several more times before 2008. Effectively bankrupt, the administration of Cristina Fernández de Kirchner, Macri’s predecessor, renationalized Aerolíneas. The move improved operational reliability, but at the astonishing price of nearly $4 billion – enough to buy TAM, South America’s largest airline, two times over.

Read the full article on Americas Quarterly.

Latin America’s Top 100 M&As in 2015

Bradesco’s acquisition of HSBC assets in Brazil was the largest deal in the region last year. Photo: Mark Hillary/Flickr (CC by 2.0)

Mergers and acquisitions in Latin America reached $74.33 billion last year, down from the $116 billion from 2014, reflecting the tough year for the region in general.

According to a report by Deloitte, most of the year’s deals were sealed in the first quarter, accounting for 29 percent of the year’s total.

The main sectors for those deals were services, financial and industrial services.

In the new ranking, Brazil and Mexico continue to lead in terms of numbers of deals reached, with the largest for the whole year being the acquisition of HSBC’s Brazilian assets by Banco Bradesco for $5.2 billion. In fact, all top 20 deals last year were in Mexico and Brazil.

Among the top 10 is the acquisition of Mexican medical firm Rimsa by Israel-based Teva Pharmaceutical Industries for $2.3 billion. Latin Trade spoke with Teva’s CFO for Latin America, Virigilio Penso, who shared his thoughts on the acquisition, as well as the company’s outlook and strategies for the region.

Read the full article at Latin Trade

Latin America Billionaires: Lemann Gains, Slim Falls

Mexican Carlos Slim (left) is the richest man in Latin America, while Brazilian Jorge Lemann is Brazil’s wealthiest individual, according to estimates from Forbes. (Photos: Agencia Brasil and Columbia University)

Mexican mogul Carlos Slim fell from second to fourth place among the world’s top billionaires, according to the latest annual ranking from Forbes. Brazilian businessman Jorge Lemann, the key driver behind 3G (owner of AB InBev, Heinz and Burger King), ends up in 19th place, up seven spots.

Slim’s fortune now stands at $50 billion compared with $72.1 billion a year ago, while Lemann’s fortune jumped from $25 billion last year to $27.8 billion this year.

Brazilian banker Joseph Safra was the third-richest Latin American, with an estimated fortune of $17.3 billion, the same as last year. Forbes calls him the world’s richest banker.

Slim wasn’t the only Latin American billionaire to see a strong decline in fortune.

Grupo Mexico owner German Larrea saw his fortune fall from $13.9 billion last year to $9.2 billion this year; Colombian banker Luis Carlos Sarmiento saw his fortune fall from $13.4 billion to $8.9 billion; Mexican business man Alberto Bailleres Gonzalez (of conglomerate Grupo Bal) saw his fortune decline from $10.4 to $6.9 billion and Ricardo Salinas (Grupo Elektra) saw his fortune almost halved from $8 billion to $4.3 billion.


Read the full article on Latin Vex.

Brazil’s economic situation is better than Russia’s.

Brazil: If You Like Russia, You’re Gonna Love…
Russian bonds did very well last year. Sovereign bond prices rose, despite the decline in oil prices. Most investors pointed to the country’s strong leadership, and Putin’s commitment to rein in the fiscal deficit. Last month’s decision to cut government expenditures by 10 percent was well received. It is true that Russia should be given high marks for implementing an orthodox response to its terms of trade shock. Moscow has allowed the exchange rate to devalue more than 60 percent. The monetary authorities hiked interest rates aggressively to stabilize the currency, without burning through its international reserves. On the contrary, the central bank husbanded its reserves to help corporates meet external obligations. Russia was cut off from the international capital markets in 2014, following its invasion of Eastern Ukraine. But instead of forcing its corporates to default, the government provided them with the hard currency resources to meet their external obligations. Thus, it’s little wonder why investors reacted so favorably.

Read the full article on Latin Vex.

Latin America’s Top Mining Companies

The mining kings in Latin America may well be dethroned in the near future, as the commodity price rout has hit the revenues of some of the biggest firms, while opening up opportunities for the smaller players.

For Brazil-based Vale, the largest miner in the region, the situation is particularly tough. Even though Vale ranked number one in Latin Trade’s new Top Mining Companies –which lists the region’s largest mining firms by revenues– its overall numbers have been declining for past years. In the nine months from January to September 2015, the company reported revenues of $15.6 billion, compared with the $16 billion from the same period a year before.

Read the full article on Latin Trade.

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