Latin Inc

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Repsol Redefines Its Strategy for Latin America

From Universia Knowledge@ Wharton

On May 11, Repsol-YPF, the Spanish petroleum company, announced its latest find: the discovery of hydrocarbons in Brazil’s Santos Basin. The discovery, baptized Panoramix, is located 180 kilometers off the coast of the state of Sao Paulo. In addition to its significant potential for gas and liquids, the find reinforces the company’s commitment in Brazil, where it has made three great discoveries in the first five months of 2009. The first, Piracuca, was made in January. Three months later, Repsol-YPF confirmed its economic viability. The second, also located in the Santos Basin and named Iguazú, was confirmed in April. The third, Panoramix, has just started up. These discoveries fall within the new strategic map that Repsol is drawing up in Latin America, which will permit the company to reduce its exposure to the decisions made by some governments in the region, including Ecuador, Bolivia, Venezuela and Argentina. In addition, the firm is turning its attention toward North America, where it is eyeing the possibility of supplying energy to the United States.

Repsol, headed by Antonio Brufau, has undergone tough times in recent years. Populism peaked in several countries in the region, putting at risk a large part of Repsol’s investments. The “Argentinization” of YPF, on the part of Argentina’s president Cristina Kirchner followed expropriations by Bolivia, Venezuela and Ecuador. With the arrival of Kirchner to the presidency, the government began a process aimed at recovering the capital of YPF, almost a decade after it was acquired by the Spanish company Repsol. This forced the company to diplomatically try to save as much of its investments as it could, since it lost 25% of its reserves in two years. However, at the same time, it was redesigning its strategy in the region, as part of its Strategic Plan 2008-2012, aware that it had to reduce its exposure to these countries, and that it had to respond to them not only with good words but also with powerful moves. And in Brazil, it has found one of the most important of such moves.     >>>>Go to Full Story >>>

 

Wal-Mart's Next Conquest: Latin America

Time will tell if the company will be able to provide the same benefit to its customers in Latin America

This year, disruptions from the global financial crisis have forced retailers to discard their earnings forecasts and alter their plans for investment and expansion. Nevertheless, Wal-Mart has emerged unscathed, and has even continued to grow. In February, the company announced its results for 2008, during which it registered US$13.4 billion in income -- an increase of 5.2% from 2007. That’s quite an achievement in times like these. Taking advantage of its strong performance in Brazil and Mexico, Wal-Mart has now undertaken the massive task of conquering the rest of Latin America. The company announced that this year, it will open stores in Argentina, Brazil, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Chile and Puerto Rico....For Claudio Aqueveque, a professor at the business school of Adolfo Ibáñez University in Chile, the current recession represents an opportunity for Wal-Mart. "The problems our region is facing this year will lead to major changes in the behavior of consumers, associated with a greater sensitivity to price; and this means tuning in to [Wal-Mart’s] low-price strategy." Nevertheless, Jagmohan S. Raju, a professor of marketing at Wharton, warns that "Wal-Mart will have to face competition from local retailers who can operate on smaller margins and provide more personalized services than the U.S. retailer can offer"...

 

Sun: New cloud computing offering has strong potential in Latin America

During the second half of this year, Sun plans to launch the new cloud computing offering, which includes storage and computing capacity. The company believes there is strong potential in Latin America, particularly among governments that are deploying programs to provide internet access to a larger portion of the population. "Latin America continues to lack infrastructure in several areas and that allows us to deploy the newest concepts, skipping [previous] stages. So when specifically talking about cloud computing, it could be beneficial for all the computing programs we have running in the region - as a way to create internet infrastructure to deploy educational programs, for instance," Andrade said. The executive mentioned Brazil, Colombia and Chile as the three countries that are currently developing programs to provide internet infrastructure, and with that, stimulate the development of the local economies.